Clouded Judgement: Cloud Infrastructure Optimization Cycles & Soft Landing Macro Outlook

Cloud infrastructure providers (Azure, GCP, AWS) are experiencing normal optimization cycles combined with catch-up optimizations from 2021's turbocharged expansion, delaying expected revenue growth inflection into Q3-Q4 2023. Current macro data supports a soft landing scenario with stronger GDP growth, tight labor markets, and decelerating inflation, positioning the market for sustained higher interest rates. SaaS valuation multiples show median 6.3x NTM revenue, with high-growth companies trading at 10.0x and positive correlation between growth rates and valuation multiples.