2Q24 IB: Executive Summary
The sector did not move off course in the recent 2Q24 period but pushed forward steadily and performed admirably. The stabilization that has emerged continued to follow existing trend lines, while underlying fundamentals and KPIs were consistent and also showed signs of more incremental improvement. There are signs that the sector is set to pick up the pace, with growth acceleration already starting to happen at the hyperscalers. The spin-off effect from an uptick there would be felt across the ecosystem. While prevailing conditions encourage optimism, there are still challenges ahead. Constraints around power is already creating headwinds to growth and leaving upside on the table, while macroeconomic conditions are improving, but not making way for a significant change in direction. The IT buying environment has improved, but there is still lingering conservatism. Overall, the sector remains in a good position moving into the second half of the year. The tailwinds forming around the sector have a distinct long-term quality and it will take time for certain dynamics to materialize and translate into contracts, revenue, infrastructure consumption and profits. This report takes a close look at the noteworthy trends and developments from the recent 1Q24 period. A more detailed look at the M&A landscape, APAC region and hyperscale cloud sectors is available to clients in separate quarterly reports.
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