The BVP Nasdaq Emerging Cloud Index down 35% from its high in early November 2021 is the “actionable moment” for investors, says Bessemer Venture Partners’ Byron Deeter.
Deeter’s remarks on CNBC’s ‘TechCheck’
Deeter attributes the weakness in cloud stocks to macroeconomic factors, including inflation, rate hikes, and the ongoing war in Ukraine. Speaking with CNBC’s Deirdre Bosa on “TechCheck”, he said:
We’ve seen multiples in the sector hammered over the last hundred days. But very little of that massive pullback has been due to business performance. These companies continue to perform; they continue to deliver. This is very much a macro question.
Last week, Adobe gave tepid guidance for its current quarter, citing impact from the Russia-Ukraine conflict.
Cloud stocks can hit new 52-week highs
The co-author of “10 Laws of Cloud Computing” sees 2022 as the “amazon moment” for the cloud industry. He’s convinced that these stocks can surpass their respective 52-week highs. Deeter added:
Cloud computing is the third massive wave of technology. It’s a huge, multi-trillion-dollar investable trend and the multiples don’t need to come back for the stocks to rise massively. That’s the core point.
Cloud was one sector that benefitted greatly from the COVID pandemic, which accelerated digital transformation for businesses across the globe. The global cloud computing market is expected to almost double in size over the next five years.
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