Salesforce, Box, Crowdstrike take a look at the AI winners: US earnings week ahead

Artificial intelligence continues to be the dominant theme of the earnings season. Software companies Salesforce, C3.ai and Box have reported on Nvidia’s consensus-breaking sales forecasts this week.

Eager to separate the winners from the losers in the early days of the AI arms race, investors want to see how well companies like Crowdstrike and MongoDB can tap into the accelerating demand for generative computing.

Elsewhere in tech, HP and Dell Technologies could give the market a better idea of whether demand for tech equipment will pick up later this year when results are released next week.

Monday: The market is closed for Memorial Day.

Tuesday: We have yet to see how much recent improvements to Box’s ( BOX US ) AI tools can help mitigate the effects of weaker demand. The consensus points to a continued slowdown in Box’s total billing and revenue growth. Both are expected to fall below 5% in the first quarter, reflecting challenging macro conditions, as suggested in the company’s March quarterly outlook. Square after market reports.

• HP ( HPQ US ), due after Tuesday’s close, and Dell ( DELL US ), due Thursday, are expected to have earnings down more than 20% year-over-year. These declines are expected to narrow in the next quarter, suggesting a possible decline in the PC market. With demand still subdued in the second half of the year, HP can maintain its cautious outlook, Bloomberg Intelligence says. Some caution may be warranted following Lenovo’s first quarterly profit loss in more than six years.

Wednesday: Post-market Salesforce ( CRM US ) reported its slowest annual sales growth since going public, intensifying scrutiny of its profit margins and restructuring plans. Jefferies analysts say the cloud-based software company’s efforts to integrate and monetize artificial intelligence will also come under scrutiny. It also reports post-launch to software developer C3.ai (AI US) with questions about product delays and management style. In short, sellers’ recent criticism of the company may have died down after preliminary fourth-quarter sales numbers beat analysts’ estimates. A healthy deal should bolster investor confidence that C3.ai is on track to reach its profitability target by the end of 2024, D.A. Davidson says.

• CrowdStrike ( CRWD US ) should continue to see double-digit annualized recurring revenue growth when it reports from the secondary market, though metrics growth may moderate from 50% to 60% a year ago. Despite a general slowdown in corporate IT spending, generative artificial intelligence — by threatening to make cyberattacks more sophisticated — is helping cybersecurity spending, according to Bloomberg Intelligence. Strong results posted by other industry players – Palo Alto Networks, Fortinet and Zscaler – also bode well for SentinelOne (USA), which will report after the close on Thursday.

Thursday: Discount retailers Dollar General ( DG US ) and Five Below ( Five Dollars US ) are likely to see further margin erosion during the quarter. BI sees Dollar General’s profitability being eroded by “inexorably rising costs” and a shift in consumer spending from higher-margin products to “needs-based consumer goods.” Meanwhile, Five Below’s top-line first-quarter earnings could beat consensus, thanks to the retail chain’s attractive store layout and aggressive sales.

• First-quarter sales at Macy’s ( M US ) likely slowed despite increased promotions, according to BI.
• BI says net additions to MongoDB customers ( MDB US ) may fall short of analysts’ expectations due to a lengthened sales cycle and increased competition. The emergence of database management systems tailored to new AI workloads may affect the top-level momentum of the enterprise.