Tech: AI innovations, market disruptions and emerging opportunities
Technology
The themes SPR will be focusing on in 2025 include 1) AI related: (a) AI applications move to the edge - benefitting the likes of Ciena, Arista and Crown Castle. (b) AI networking transition to ethernet vs. InfiniBand, benefitting Arista, Cisco, Juniper and Extreme. (c) AI use cases that are delivering strong ROI vs. others that are not, despite strong sales efforts by vendors - impacting renewals for Salesforce, ServiceNow, and others. 2) In cyber security, areas of growing priority include SOC automation and Next Generation SIEM. 3) More vendors bypass distribution and sell via the CSP marketplace or direct, negatively impacting large distributors. 4) BEAD - despite delays, this program will drive meaningful revenue. 5) Vendors benefitting from the rapid growth in DevOps / DevSecOp.
Field comments on spending on compute, data centre and edge build outs for AI
Technology
1) Data centre operators are running out of space, pre-selling new space and in some cases, aggressively looking to purchase space from end users - beneficiaries include Equinix and Digital Realty Trust. 2) Examples of hyperscalers, enterprises and innovative new AIaaS operators rapidly building compute. 3) Cloud optimisation efforts being viewed as “new normal” vs. temporary headwind. 4) After years of hype but slow growth for edge computing there is evidence that use cases are developing and demand is picking up - Crown Castle was mentioned by multiple industry contacts as benefitting from MEC and Lumen from increased demand for fibre connectivity. 5) Some interesting new data centre operators with well-timed AI infrastructure: Denvr Dataworks, Applied Digital and Napatech.
Crown Castle (CCI)
Real Estate
J Martin (Chairman) purchases 11,200 shares at $191.51, spending $2.1m - he qualifies as a "Smart Buyer" with an almost perfect record of 9 timely purchases out of 10 since he started buying in June 2002. This purchase is notable as the price has increased by more than 20% since his last acquisition in March. Bodes well for shareholders to see him continue to add at this higher price level.
