2022-12-23-瑞士信贷集团-Software_Networking_Weekly_Bytes_–_Assumption_of_Coverage_for_the_Large_Cap_US_Software_Sector_20页_592kb

Daily Report Summary - Software & Networking Sector (December 23, 2022)

Data Centers & Cloud Infrastructure

• Overall Market Trend: Sector experienced mixed performance:
  • Data Center REITs (EQIX, DLR) and Non-REIT DCs (Crown Castle, SBA) saw declines due to macroeconomic concerns and strategic project relocations by tech giants (e.g., GOOGL, META delaying projects).
  • Average YTD performance: Data Center REITs returned ~44k price for 666 shares; Non-REIT companies (e.g. CYXT outperformed).

Public Safety Equipment

• Budget Scenario (NASBO):
  • State budgets (FY23) grew 6.7% YoY, ahead of expectations, despite a reduction from peak FY22 growth set by pandemic spending.
  • Rainy Day Funds (RDF) increased sharply, signaling fiscal resilience amid economic uncertainties.
  • Public safety demand remains strong, impacting companies like AXON and MSI (CSCO’s top pick) — rated Outperform with one-time targets alongside Neutral TYL.
• Market Impact: Positive for equipment vendors in security and public safety sectors.

Software Sector

• Equity Research:
  • CREDIT SUISSE took primary responsibility for Large-Cap US Software, including companies like CRM, ORCL, ADBE, but made no rating/TP changes.
  • Analysis notes Palantir (PLTR) securing a ~$91M military deal, strengthening its global position.

Valuation Focus

• Key valuations:
  • META and Cloudflare (NET) had DCF-based targets, while CYXT (a REIT) showed multiple compression.
  • AXON valuation was based on 5.3x sales multiple.

Market Dynamics & Risks

• Sector Performance:
  • Software and Networks showed slightly positive trends aligning with robust government budgets, offset by tech cooling.
• Key Drivers:
  • Public safety funding hikes, corporate tech rollouts (e.g., Palo Alto’s acquisition strategy), and regulatory compliance needs.
• Headwinds:
  • Geopolitical strains (e.g., Meta’s AI redesign), rising interest rates, and macroeconomic shifts affecting capital spending.

Infrastructure Developments

Notes highlight potential green data center expansions in Singapore by Digital Realty and Equinix, alongside FY2022 shifts in AI-driven networking tools.

Curated listings identify key stocks affected by the latest analysis or transactional activity, ensuring focus on relevant companies.