The tech landscape saw major growth in 2023, primarily from the mass adoption of AI. What could growth look like for tech in 2024? Synovus Trust Senior Portfolio Manager Dan Morgan joins Yahoo Finance Live to weigh in on major tech themes in 2024.

According to Morgan, enterprise software — although “muted” in 2023 — is expected to see growth by 13% in 2024. Morgan notes that the data center segments, including Amazon's AWS (AMZN) and Microsoft Azure (MSFT), have become more "mature."

“I don’t think we’re ever going to return back to the growth rates that we had previously, especially after COVID," Morgan believes about data center growth.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Eyek Ntekim.

Video Transcript

JULIE HYMAN: Dan, looking to some of your other themes that you're watching, one of throughlines is what's going to happen with enterprise spending this year and where that IT spending is going to be deployed. So we talked about the AI piece, but I know you're focused on a couple of other themes, including software and infrastructure as a service. Are we going to see moderation or acceleration in some of those areas?

DAN MORGAN: Well, Julie, if you look at the recent studies that have come out on IT budgets for this year, we're projecting about 8% growth. You mentioned enterprise software, the companies like SAP and Salesforce, Adobe, Autodesk, all these household names, that's been an area where growth was pretty muted last year. A lot of large contracts didn't go through. CIOs were nervous about the economy. We're expecting that to grow about 13%.

If you look at the data center space, which you just mentioned, infrastructure as a service, that's going to be AWS, Azure, GCP, AliCloud, that area is becoming much, much more mature. And if you guys can probably remember looking back at, let's say, Amazon's or Microsoft's recent reports, these areas that were growing 40%, 50%, for example, AWS I think is growing at 16% right now, have really become much more mature. And I would expect that to continue, Julie, going forward.

Data center was a super hot spot five years ago. But those growth rates are really starting to slow down. I don't really see a big change there. But hoping for some revival a little bit into the enterprise software space. And then hopefully, we can continue growing in terms of data center. But I don't think we're ever going to return back to the growth rates that we had previously, especially after COVID.