RiskReversal Pod AI Winners and Losers: Navigating Volatility in the Tech Sector with Rishi Jaluria
Feb 5, 2025
Rishi Jaluria, a Senior Software Analyst at RBC Capital Markets, breaks down the current tech landscape shaped by generative AI. He discusses Microsoft's evolving strategies, particularly around Azure and Office Copilot, and the significant performance shifts impacting investor sentiment. The conversation explores Salesforce's AI direction, the competitive dynamics among tech giants like Oracle and Alphabet, and the potential for vertical software opportunities. Jaluria emphasizes the future of AI innovation amid market volatility and infrastructure challenges.
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Microsoft's AI Performance
- Microsoft's recent underperformance is due to decelerating Azure growth.
- However, strong AI revenue, particularly from Office Copilot, suggests Microsoft is successfully monetizing AI.
Microsoft's Product History
- Early versions of Microsoft products like Teams and Power BI were not well-received, similar to Office Copilot's initial iteration.
- However, Microsoft has a history of improving and dominating markets with initially flawed products.
Copilots vs. Agents
- The distinction between copilots and agents in AI is blurring.
- Copilots are controlled, while agents are autonomous but both are shifting towards an agentic model.