Gerstner notes hyperscalers grew collective revenue from $150 billion to $350 billion in just eight quarters.
“Let me just give you a statistic. It's just eight quarters ago that collectively they were doing a $150,000,000,000 in revenue. Now they're doing $350,000,000,000 in revenue.”
Gerstner says software valuations only recover when companies prove they are AI beneficiaries through revenue acceleration.
“So the only way that reverses, Scott, is those companies have to accelerate their core revenues and show that they are beneficiaries of AI.”
Gerstner cites Databricks growing over 60% as example of companies accelerating because AI relies on them.
“I think this quarter, they're they grew over 60%. Snowflake, Clickhouse, these are companies that are accelerating their core revenues because AI relies on them.”