Clouded Judgement: Cloud Giants Q3 2023 Report & SaaS Valuation Reality Check

Cloud infrastructure giants (AWS, Azure, Google Cloud) reported Q3 2023 results showing continued cloud optimization pressures and delayed re-acceleration of new workloads, contradicting market expectations for software growth acceleration in 2024. Azure ex-AI growth decelerated sequentially while maintaining high absolute growth, and Google Cloud's 22% growth represents a significant slowdown from 28% prior quarter, suggesting the broader SaaS universe faces headwinds rather than tailwinds. Current SaaS valuation multiples remain elevated relative to growth expectations, with median 5.4x EV/NTM Revenue across the sector despite uncertain near-term growth catalysts.