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Business Insider
5 days ago
- Business
- Business Insider
Bank of America Weighs in on Amazon Stock Amid Rising Robotics Potential
Amazon (NASDAQ:AMZN) has made several high-profile acquisitions in recent years, including the $13.7 billion purchase of Whole Foods in 2017 and the $8.45 billion acquisition of MGM Studios in 2022. Confident Investing Starts Here: But long before these deals, Amazon made a strategic bet that would quietly redefine its core operations. In 2012, it acquired Kiva Systems for $775 million – a move that laid the foundation for the company's massive push into automation. That early investment has since evolved into a robotics powerhouse, with Amazon now deploying more than 20 types of robots and operating a fleet of over 750,000 units. Although robots are already deeply integrated into Amazon's fulfillment centers, Bank of America's Justin Post, an analyst ranked in the top 1% of Wall Street stock experts, thinks the company is still in the early stages of broader robotics adoption, as evidenced by the late-2024 launch of its automated fulfillment center and the May announcement of eight new robots for delivery stations set to be deployed over the next two years. 'Robots will be instrumental in improving Amazon's long-term cost structure,' says Post, 'likely by: 1) reducing labor dependencies and impact of wage inflation; 2) reducing employee injury costs; 3) increasing order accuracy, and 4) driving higher warehouse utilization.' Post thinks Robotics could strengthen Amazon's 'competitive moats,' especially as increased transparency in an AI-driven retail landscape favors companies with lower costs and faster delivery. According to Amazon, recent AI advancements have brought a 'step change' in how automation can help its employees, opening the door for further logistical innovation. The development of spatially aware robots capable of sorting, picking, and packing represents a 'significant breakthrough' in fulfillment and delivery – one that Amazon is likely to embrace well ahead of rivals, thanks in part to its leadership in AI through AWS. The cost-saving potential of robots is not to be sniffed at. The new 12th-generation fulfillment centers – equipped with 10 times more robots – are expected to reduce peak period service costs by 25%. The multi-year rollout of these advanced centers and retrofitting of existing facilities is underway, after kicking off with the initial one last year. Amazon is also deploying more robots in delivery stations and piloting autonomous drone deliveries in Texas and Arizona. Based on estimated efficiency gains – 20% in new fulfillment centers, 15% in updated delivery stations, and 40% for drone deliveries on select packages – by 2032, Post reckons robotics could generate up to $ 16 billion in annual cost savings. Additionally, there's still a way to go in improving margins. The 2024 retail operating profit margin of 5.4% amounts to a big improvement vs. 2022, and Post thinks that over the long-term, there is potential for margins to reach 11%, based on assumptions of a 55% margin on advertising, 20% on third-party (3P) services, 5% on subscriptions, breakeven for 1P (first-party) retail, and $10 billion in annual investment spending. 'We think robots and drones will increase Amazon's shipping speed advantages, and could add another 2pts to Amazon's long-term retail margins, helping move 1P toward better profitability in a very price-transparent AI world,' Post further said. Conveying his confidence, Post assigns a Buy rating to AMZN shares and raises his price target from $230 to $248, suggesting the stock could gain ~21% in the months ahead. (To watch Post's track record, click here) That is just one of many bullish AMZN takes on Wall Street; the stock's Strong Buy consensus rating is based on a lopsided mix of 47 Buys and 1 Hold. Going by the $240.62 average price target, a year from now, the shares will be changing hands for a 17% premium. (See AMZN stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
Yahoo
19-05-2025
- Business
- Yahoo
Alphabet (GOOG) Stock Rated ‘Buy' as Chrome Gains on Safari
We recently published a list of . In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOG) stands against other AI stocks on Wall Street's radar. Days after the Biden-era rule on AI chips export was rescinded, a bipartisan group of eight U.S. lawmakers has now introduced a bill requiring makers of artificial intelligence chips to include technology that verifies the location of their chips before exporting them. Introduced in the U.S. House of Representatives, the Chip Security Act will aim to address reports of U.S. export-controlled AI chips being smuggled into China. The bill comes shortly after US President Donald Trump began his tour of the Middle East this week, announcing several deals that will send AI chips to countries in the Middle East. This has been despite growing opposition from some inside the US government. READ NEXT: and 'In order for the United States to maintain our technological advantage, we must employ safeguards to help ensure export controls are not being circumvented, allowing these advanced AI chips to fall into the hands of nefarious actors.' For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (). A laptop and phone open to Google's services in an everyday Inc. (NASDAQ:GOOG) is an American multinational technology conglomerate holding company wholly owning the internet giant Google, amongst other businesses. On May 13, Bank of America Securities analyst Justin Post maintained a 'Buy' rating on the stock and set a price target of $200.00. Post's buy rating stems from Google's strong growth potential and improved market position. A primary reason noted by the analyst has been that Google Chrome is gaining browser market share at the expense of Apple's Safari. This implies how Google's overall query volume remains strong, especially on Apple devices. Google's apps on iOS have also been demonstrating growth in monthly active users and total time spent. With features like Google Lens and the expansion of the Gemini brand, direct traffic will likely be enhanced on Google's properties. Overall, GOOGL ranks 2nd on our list of AI stocks on Wall Street's radar. While we acknowledge the potential of GOOGL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than GOOGL and that has 100x upside potential, check out our report about this cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at . Sign in to access your portfolio
Yahoo
08-05-2025
- Business
- Yahoo
AI and ad tech are safe from Trump's tariffs so far
Big Tech's earnings season is in full swing. And while we've still got a few weeks left before Nvidia reports its results May 28, one major pattern is emerging. AI and advertising are dodging the impact of President Trump's tariffs, while consumer-focused companies like Apple take the hit. Google parent Alphabet (GOOG, GOOGL), Amazon (AMZN), Meta (META), and Microsoft (MSFT) all scored solid results. Alphabet raised its dividend and authorized an additional $70 billion in stock buybacks; Meta provided strong guidance for the current quarter; and Microsoft pointed to healthy cloud sales. Amazon offered a lighter than anticipated outlook on its operating income for its second quarter, but even that didn't shake analysts. '[Management] noted limited direct impact from tariffs on the Q2 profit guide, driven by pre-buying inventory and limited [third-party] seller impact so far (sellers not yet raising prices),' BofA Securities analyst Justin Post wrote in an investor note following Amazon's earnings. And while Apple also saw better-than-anticipated EPS and revenue in its latest quarter, the company warned that it will take a $900 million charge in its current quarter. CEO Tim Cook also noted the outlook for the June quarter remains murky. 'There remains plenty of uncertainty on the tariff cost impact beyond the June [quarter], but we are assuming a 30% China tariff and 10% tariff for the [rest of the world], with Apple able to partially mitigate these tariffs, resulting in a 45.3% gross margin in the Sept [quarter],' Morgan Stanley's Erik Woodring wrote in an analyst note. It's a sign that Big Tech's cloud and AI giants are navigating the current economic environment with relative ease, while Apple is forced to pull as many levers as possible to avoid a damaging blow amid the Trump administration's ever-changing tariff policy. And it won't get any easier until Washington provides some long-term clarity. One of the main concerns going into Big Tech's earnings season was whether advertising and AI spending would keep pace in the face of tariff fears. And, luckily for the likes of Alphabet, Amazon, Meta, and Microsoft, they did just that. Alphabet's advertising revenue topped expectations, and while cloud revenue was a hair shy of Wall Street's estimates, analysts weren't concerned, as the company, like its rivals, is contending with more AI demand than it can handle. 'And given that revenues are correlated with the timing of deployment of new capacity, we could see variability in Cloud revenue growth rates, depending on capacity deployment each quarter,' Alphabet CFO Anat Ashkenazi explained during the company's earnings call. 'We expect relatively higher capacity deployment towards the end of 2025.' Chief business officer Philipp Schindler also called out Alphabet's strong ad performance in Q1, and while he cautioned that it's too soon to comment on Q2 and that the company will see minor headwinds related to changes to the de minimis exemption, he said Alphabet has plenty of experience working through uncertain times. The de minimis exemption exempted shipments of $800 or less coming into the US from tariffs. Amazon also saw strong sales in Q1. And while CEO Andy Jassy explained that it's difficult to tell where tariffs will go from here, he said that the company's AWS service continues to grow meaningfully relative to its already massive size despite AI capacity constraints. Microsoft's cloud business grew 20% year over year, with AI contributing 16 points of growth to the company's Azure business. And so far, the company isn't seeing any major impact due to tariffs. 'Through April, demand signals across our commercial businesses as well as in LinkedIn, Gaming, and Search have remained consistent,' Microsoft CFO Amy Hood said during the company's earnings call. Meta, like Alphabet, also said its outlook looks solid outside of the de minimis exemption change. 'While Meta will not be immune should there be a macro slowdown, we believe it will perform better on a relative basis than less scaled digital advertising platforms,' William Blair analyst Ralph Schackart wrote in a note following Meta's earnings. Apple's tariff problems are far more complicated thanks to its large presence in China. While the company is moving production for US-bound iPhones to India, it could still face duties on accessories made in other locations, including Vietnam. Apple also has to worry about the Trump administration's Section 232 investigation into potential semiconductor tariffs, which, Cook noted during the company's latest earnings call, makes it difficult to provide a detailed outlook for the coming months. 'The company guided June [revenue] growth of 'low single to mid-single digits,' roughly 100bps below our expectations,' UBS analyst David Vogt wrote in an investor note following Apple's earnings. 'Additionally, segment color was not provided, raising some concern that iPhone revenue could decline [year over year] in June.' How Cook ultimately decides to handle the ongoing tariff situation will have a major impact on the company going forward. And while his contemporaries are certainly contending with their own tariff troubles, the stakes are far higher for Apple. Email Daniel Howley at dhowley@ Follow him on Twitter at @DanielHowley.
Yahoo
07-05-2025
- Business
- Yahoo
Ahead Of Uber Earnings, Analyst Raises Forecast
BofA Securities analyst Justin Post maintained a Buy rating on Uber Technologies, Inc (NYSE:UBER) with a price target of $96, up from $95 on Sunday. Uber will report its quarterly earnings results on May 7 before the market opens. For the first quarter, Post's bookings and revenue estimates were $43.5 billion, and $11.73 billion were higher than the Street estimates of $42.9 billion and $11.62 billion. Also Read: Autonomous Ride-Hailing Just Got Real: VW And Uber Reveal First US City The analysts' EBITDA estimate of $1.89 billion was higher than Street's estimate of $1.84 billion. He noted that Instacart's results and stable growth outlook were positive for Uber Delivery in the U.S. For Mobility, Post projected bookings growth of 21% ex-foreign-exchange, which is more of a deceleration than BAC card data, which indicates Online Transit spend was stable sequentially. Post remained constructive on New Verticals' contribution to growth as Uber invests into new customers and products like Uber Teen or autonomous vehicles. However, the analyst recently flagged some softer TSA data on U.S. airport activity, so U.S. travel-related trips on Uber could see some modest near-term pressure. Post also noted that U.S. Rideshare industry pricing data from Bloomberg has pointed to a deceleration in Uber ride pricing. The analyst projected stable 18% ex-foreign exchange growth for Delivery, while BAC card data suggests Online Delivery growth decelerated 1 point versus the fourth quarter. He is constructive on Uber's Grocery & Retail segment, which is estimated to add 2 points to growth in the first quarter as Uber signs deals with brands previously reluctant to partner with 3P apps. Post expects the tone on autonomous vehicles to be very constructive. Waymos launched exclusively on the Uber app in Austin at the beginning of March. Uber handles matching and fleet management services, while Waymo operates in-car software and roadside assistance. Early data coming out of Austin and Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) Google's recent earnings call comments suggest the ramp is going well, but noted that Uber may also be leaning into tools to boost autonomous vehicle adoption. Post also expects Uber to highlight its recent partnership with Volkswagen (OTC:VWAGY) to deploy autonomous vehicles across multiple cities, starting in Los Angeles. Volkswagen's AV, 'ID. Buzz,' will begin testing in late 2025, with plans to offer rides to the public on Uber in 2026. The partnership is Uber's first major auto OEM partner, which can provide large-scale manufacturing capability that goes far beyond software-focused partners.
Globe and Mail
05-05-2025
- Business
- Globe and Mail
Can Meta's AI Tools Disrupt Google (GOOGL) and OpenAI? Analysts Weigh In
Meta Platforms (META) hosted its first AI-focused event, LlamaCon, and analysts came away feeling positive about the company's direction in artificial intelligence. Five-star Bank of America analyst Justin Post, who has a Buy rating and $640 price target on Meta, said that the event showed how flexible Llama is and how strong Meta's open-source position has become. He pointed out that Llama has now been downloaded over 1.2 billion times, offers a wide range of features, and is cheaper than many competitors. Meta also launched a new AI app, Llama API, and added tools for security and app development. Protect Your Portfolio Against Market Uncertainty Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. Separately, Morgan Stanley's 4.5-star rated analyst, Brian Nowak, said that Meta's new AI assistant app isn't as advanced as ChatGPT or Google's (GOOGL) Gemini just yet, but it's still early. He believes it has potential, especially if it uses Meta's massive amount of user data to offer personalized help, like recommending restaurants or planning trips. Since Meta is offering this app for free while others charge for similar tools, it could gain users faster. However, Nowak also said it's still uncertain whether the app will generate meaningful revenue or become a real threat to Google Search. Meanwhile, Jefferies 4.5-star analyst Brent Thill called the event an important step in Meta's move toward becoming a cloud platform. Until now, developers accessed Llama through other cloud providers like Amazon Web Services (AMZN) and Microsoft Azure (MSFT), but Meta's new Llama API allows it to make money directly from its own cloud services. Thill also pointed to new partnerships with chipmakers Groq and Cerebras and estimated that Llama could be worth $80 billion, based on other AI companies' valuations. In addition, he said that Meta's large user base and data access give it a major advantage. Is META Stock a Good Buy? Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 36 Buys, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $680.53 per share implies 26.1% upside potential. See more META analyst ratings
