NextDC chief executive Craig Scroggie said last week that the data centre developer was in early conversations with customers to plan their infrastructure needs for generative AI, which is yet to be factored into the company’s revenue guidance.
Another hallmark of earnings season was the volatility of technology stocks, said Elise Kennedy, head of Australian technology research at Jarden. Share prices swung by as much as 30 per cent as companies revealed their results for the 12 months to June 30 and guidance for the year ahead.
“These tech stocks have a high beta for a reason, or in layman’s terms, expect them to go up with just as much momentum as they can go down,” she said. “With the selldown, then rebid from the market on the tech sector, there were big stock moves on results delivery on better or worse guidance.”
WiseTech Global, the provider of freight software, was among the biggest movers, as investors wiped $5.6 billion from its value after it said its purchase of Envase Technologies and Blume Global would squeeze margins.
Despite the interest in generative AI, data service company Appen dropped a further 32 per cent when the company’s turnaround plan failed to offset declines in its core business. Shares in financial software and data firm Iress tanked 36 per cent on its lack of growth, rising costs and concerns about its balance sheet, while IT solutions group Data#3 fell 19 per cent.
Altium, which makes software used by electronics designers, delivered the biggest positive surprise for analysts and investors. Shares are up more than 30 per cent since its result announcement.
Barrenjoey’s Mr Kannourakis said Altium’s recent success in its enterprise segment, including selling software licences to companies including Tesla, materially expands its addressable market and potential revenue pool.
“Altium’s accelerating momentum in selling higher value professional and enterprise licences was a key feature of the result, with these users growing 76 per cent year-over-year versus overall subscription growth of 7 per cent. This trend drove a material increase in average revenue per user of 22 per cent and is likely to continue.”
