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Key Themes

At the Morgan Stanley TMT conference, companies highlighted a structural shift where acute physical infrastructure constraints are driving pricing power, while software vendors aggressively pivot to "agentic" revenue models that monetize outcomes rather than user seats. To defend against disruption, incumbents are leveraging proprietary data, regulatory complexity, and liability frameworks as critical moats that generic AI models cannot replicate.

Below are are the key themes discussed across companies:

• Physical Scarcity & Infrastructure Yield: The AI supply chain has hit a wall of acute physical constraints, granting immense pricing power to asset holders while squeezing component buyers. NVIDIA anchors this reality, declaring that "compute equals revenues" as data centers morph into "AI factories" optimized for tokens-per-watt. This intensity has stripped the market of critical inputs; Lumentum reports that Indium Phosphide lasers are "sold out" through 2027/28 due to AI bottlenecks, a scarcity mirrored by CoreWeave, which declares 2026 "broadly sold out" supported by a $67 billion backlog and $30-35 billion in asset-backed CapEx. This tightness is rippling downstream; AMD sees "supply tightness" across both CPUs and GPUs as demand exceeds forecasts, while HP is forced to raise prices to combat a sequential doubling of memory costs. Fortinet is leveraging its 60% unit share and proprietary ASICs to insulate margins from these component spikes, while AT&T validates the need for physical density by acquiring Lumen assets to support the massive uplink capacity required by AI workloads.
• The "Agentic" Pivot: Monetizing Outcomes Over Seats: Software vendors are aggressively transitioning from seat-based models to consumption or hybrid pricing to capture the volume of AI agents. NVIDIA confirms the infrastructure imperative for this shift, noting that "agentic" workflows consume "a million times more tokens" than simple queries, a surge enabling AppLovin to automate ad creatives and target a conversion rate leap from 1.3% to over 5%—quadrupling revenue without adding headcount. ServiceNow reports that consumption of its "Assist packs" has surged 55x since May, projecting a revenue "hockey stick" in H2 2026, creating a blueprint for Salesforce’s shift to "Agentic Work Units" and Asana’s hybrid credit model for its AI Studio-already at $6 million ARR. Similarly, Snowflake credits its Cortex coding agent for driving efficiency that contributed to a 30% product revenue re-acceleration, while Cloudflare notes a doubling of machine-driven traffic on its network. Down-market, Amplitude has overhauled pricing to a "value-based uplift" model where costs rise with module adoption, targeting a long-term Net Retention Rate of 115%.
• The Liability Moat & Deterministic Accuracy: Incumbents are successfully arguing that "probabilistic" LLMs cannot handle "deterministic" high-stakes workflows without proprietary data and liability protection. Vertex defends its moat by noting that 70% of tax rules are proprietary and offline - preventing LLM scraping - while Intuit leverages its "AI + HI" strategy to provide the liability shield customers demand for financial filings. Similarly, ServiceNow argues that generic models can only diagnose, whereas its integration into systems of record allows for "workflow action" in sensitive environments like healthcare. Finally, Netflix and Uber contend that human and physical realities remain the ultimate gatekeepers; Netflix views AI strictly as an accelerator for elite creators rather than a replacement, and Uber cites regulatory approval and physical cleaning-not software-as the true bottleneck for AV scaling.

Day 1 (Mar 2, 2026)

Zscaler (ZS)

Zscaler management highlighted strong fiscal Q2 momentum, reporting 25% ARR growth and record large-deal volume driven by the Z-Flex flexible buying program ($290 million TCV). Key themes included the strategic pivot to AI security, with CEO Jay Chaudhry detailing the "AI Protect" launch and new solutions for securing AI agents. The company emphasized platform diversification, noting non-user-based revenue now exceeds 25% of new bookings. Management also expressed confidence in the Red Canary integration for AI SecOps and dismissed competitive concerns in the large enterprise market, reaffirming their $10 billion ARR goal.