Seven technology firms with a combined market capitalisation of over $3.6 trillion reported their earnings late Wednesday and if there was one key takeaway it was this: Software spending is not slowing down, with Salesforce alone committing to hiring another 2,000 salespeople. 

HP, Nvidia, Nutanix, Pure Storage, Salesforce, SentinelOne, Synopsis don’t have a great deal in common beyond reporting earnings on May 28, but looked at in aggregate make for an interesting read in volatile times. The headline numbers in revenues, year-on-year comparisons.

Pure Storage CEO Charlie Giancarlo summed it up in an investor Q&A: “Are we seeing pull-ins in the market? We have to say from the Q1 results, we didn't see that. Of course, that was through April. I would say that right now, it's really a de minimis amount. Q2 might be a slightly different story, but I wouldn't say that it's going to be a substantial amount…”

SentinelOne’s CEO Tomer Weingarten admitted that “macro uncertainty was pronounced in April and impacted our Q1 net new ARR” but with growth still strong he added: “We've not seen any type of elevated churn… the engagement we see, demand is still strong and pipeline is still strong, so all of that just points us again to fundamentals being intact.”

Salesforce CEO Marc Benioff said: “There is a lot of growth happening already in the company. One of the big areas of growth that's already happening is in small and medium business. Another area that happened in the first quarter is in the mid-market. And we even saw a lot of signs for incredible growth in a lot of our geographic regions like Japan and others and in our core technologies, like we mentioned, with data cloud and AI.

He added:”When we start to put all of these pieces together, that is where we also decided to now hire another 1,000 to 2,000 more salespeople…”

“A sharp jump in inference demand”

Synopsis CEO Sassine Ghazi said AI was driving growth: “Despite market fluctuations, the AI and HPC sectors remained robust. And while we're seeing signs of stabilization in industrial and automotive.”

He admitted, however, that “non-AI end market demand remains subdued” but “the mega trends of AI, software defined systems and silicon proliferation continue to drive our growth. These trends are increasing design complexity and costs, while also increasing compute performance and energy demand” Ghazi said on an earnings call. 

If it needed spelling out that AI continues to drive major spending, look no further than bellwether NVIDIA. Its data center segment revenue alone was $39 billion, up 73%. CEO Jensen Huang commented: “We are witnessing a sharp jump in inference demand. OpenAI, Microsoft and Google are seeing a step function leap in token generation. Microsoft processed over 100 trillion tokens in Q1, a five-fold increase…” 

As Gartner noted at the start of the year (predicting global IT spending to hit $5.61 trillion in 2025, up 9.8% however: “While budgets for CIOs are increasing, a significant portion will merely offset price increases within their recurrent spending. This means that, in 2025, nominal spending versus real IT spending will be skewed, with price hikes absorbing some or all of budget growth. All major categories are reflecting higher-than-expected prices, prompting CIOs to defer and scale back their true budget expectations.”

Join peers following The Stack on LinkedIn

The link has been copied!