Latest news with #SatyaNadella-led
Yahoo
14-05-2025
- Business
- Yahoo
Analyst Warns Apple (AAPL) To Be ‘First' To Feel Consumer Slowdown Impact
We recently published a list of . In this article, we are going to take a look at where Apple Inc. (NASDAQ:AAPL) stands against other top buzzing stocks in May. The latest quarterly results from a couple of major technology companies have soothed concerns about AI demand that prevailed in the market following the launch of DeepSeek. Storm Uru, Manager at Liontrust Global Dividend Fund, said while talking to CNBC that the Satya Nadella-led tech giant's results were 'extraordinary.' '50% of that growth came from AI revenue, and that's an important marker for us going forward. Because after Deepseek about four months ago now, the debate really was around as digital intelligence gets smarter and as it gets cheaper, what is going to be the impact on demand. And what we found out last night was that demand is accelerating,' he said. David Grain, Founder & CEO of Grain Management, also believes AI demand could be strong amid a variety of factors. 'The advent of AI has created this explosion of demand for data centers and compute power, but the drivers of where it makes sense to actually build these data centers has a lot to do with the availability of reliable and high quantity of electricity. So I think there's definitely no slowdown in the demand side of the equation,' he said during an interview with CNBC. READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In. For this article, we picked 10 stocks making moves these days. With each stock, we have mentioned the number of hedge fund investors. 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 (see more details here). Number of Hedge Fund Investors: 158 Gil Luria, D.A. Davidson managing director, said in a latest program on CNBC ahead of Apple Inc. (NASDAQ:AAPL) quarterly report that his expectations were not high heading into the results. He believes Apple could be among the first companies to feel the heat of a consumer slowdown: 'We're not expecting a good result or a good outlook. What we're really hoping for is for Apple to give us visibility and a sense for a stable outlook — that they've wrapped their hands around what the impact from tariffs is going to be, and that they can give us an outlook based on that. You just talked a lot about Meta and Microsoft. Those results aren't just not as bad as feared — those results were actually good. I would not expect that from Apple. Let's not forget we're talking about a consumer-driven slowdown, and Apple is the consumer product company. Only later on, a consumer slowdown may lead to an advertising slowdown and maybe eventually to an enterprise technology slowdown. For now, the impact is first going to be felt by Apple, and we want to get our hands around how much of an impact that is tomorrow.' Apple's iPhone revenue was above estimates in the latest quarter, but revenue for Services, one of the key pillars of hope for the company's bulls, came in slightly below estimates. CEO Tim Cook said the company sees a $900 million impact from tariffs in the second quarter, and is unable to predict the effects of duties beyond that. However, the US and China have reached a truce on tariffs for 90 days. Would this development help the stock? Apple Inc. (NASDAQ:AAPL) is desperately in need of new catalysts. The company's revenue in China fell 8% in fiscal year 2024, following a 2% decline the previous year. The Chinese market accounts for about 15% of Apple's total revenue, so this downtrend cannot be ignored. Investors had hopes from the Wearables, Home, and Accessories segment, but so far its performance has been weak. Vision Pro faces tough competition from Meta's $500 Quest and the more affordable Quest 3S, making it hard to justify its $3,500 price tag. The failure of Apple's HomePod, unable to compete with Amazon's and Google's lower-priced offerings, further highlights the challenges in this market. Apple's iPhone 16 has not shown promising growth prospects yet and investors are still in a wait-and-see mode on the AI platform. Columbia Seligman Global Technology Fund stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter: 'The fund maintained a position in Apple Inc. (NASDAQ:AAPL) throughout the quarter through the release of the company's new iPhone 16 in September. Company leaders were excited about the release of the new model, as this is the first model that will feature enhanced AI capabilities through the Apple Intelligence features. Sales for the first few weeks in October and November trailed behind year over year sales from the iPhone 15, as availability of Apple Intelligence was not compatible with all iPhone models. Apple announced a partnership with OpenAI that has allowed the integration of ChatGPT into the Apple ecosystem, separate from the core Apple Intelligence features. This partnership highlights continued progress from Apple to introduce AI capabilities into its products and we expect the iPhone 17 to have even more expansive AI capabilities, increasing potential demand for the new model that is on track to be released in 2025.' Overall, AAPL ranks 4th on our list of top buzzing stocks in May. While we acknowledge the potential of AAPL, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AAPL but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-05-2025
- Business
- Yahoo
Analyst: Meta Platforms (META) Has ‘Best Performing' Ad Business Regardless of ‘What Happens This Year'
We recently published a list of . In this article, we are going to take a look at where Meta Platforms, Inc. (NASDAQ:META) stands against other top buzzing stocks in May. The latest quarterly results from a couple of major technology companies have soothed concerns about AI demand that prevailed in the market following the launch of DeepSeek. Storm Uru, Manager at Liontrust Global Dividend Fund, said while talking to CNBC that the Satya Nadella-led tech giant's results were 'extraordinary.' '50% of that growth came from AI revenue, and that's an important marker for us going forward. Because after Deepseek about four months ago now, the debate really was around as digital intelligence gets smarter and as it gets cheaper, what is going to be the impact on demand. And what we found out last night was that demand is accelerating,' he said. David Grain, Founder & CEO of Grain Management, also believes AI demand could be strong amid a variety of factors. 'The advent of AI has created this explosion of demand for data centers and compute power, but the drivers of where it makes sense to actually build these data centers has a lot to do with the availability of reliable and high quantity of electricity. So I think there's definitely no slowdown in the demand side of the equation,' he said during an interview with CNBC. READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In. For this article, we picked 10 stocks making moves these days. With each stock, we have mentioned the number of hedge fund investors. 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 (see more details here). Number of Hedge Fund Investors: 235 Mark Mahaney, Evercore ISI head of internet research, said in a latest interview with CNBC that Meta Platforms (NASDAQ: META) is a high-quality stock amid low valuation. 'I think that at less than 20 times earnings, I think it's nicely dislocated and it's a high-quality name. I think it's going to be one of the best performing, relatively, ad assets out there, almost irregardless of what happens later this year. There's a lot of resiliency to the Meta Platforms Inc (NASDAQ:META) model that may be underappreciated,' Mahaney said. 'I think investors are concerned about with Meta Platforms Inc (NASDAQ:META), I think is somewhat overstated. Yes, it's about 10% of their revenue comes from China-based companies, but those companies are still selling. They may not be selling into the US, but they're still selling into Europe, Latin America, etc. They're using Meta to get there. There's also this little bit of an interesting hedge. The worse things there are between the US and China, the less chance of a TikTok actually staying in the US, and that's going to be a source of funds I think for Meta. So I think there's a little bit more resilience to Meta Platforms Inc (NASDAQ:META) than the market makes.' Meta Platforms' (NASDAQ:META) biggest strength remains its huge user base, which continues to grow despite record levels. The company has 3.43 billion monthly active users as of March, up 6% year over year. This equals about half of the world's total population, giving the company immense power for monetization and data processing. The company also raised its capex guide for the year from $60-$65 billion to $64-$72 billion, crushing concerns about an AI and data center slowdown. Another overlooked element in Meta Platforms, Inc. (NASDAQ:META) business is its ads growth. The company, which depends on advertising for 98% of its revenue, is growing at a rate of 21% YoY. In comparison, Google Search grew by 9%, while Alphabet's overall business, including Cloud and Services, expanded by 12%. Even YouTube's year-on-year growth stands at 11%, well below Meta Platforms Inc (NASDAQ:META) rate. Given Meta Platforms, Inc. (NASDAQ:META) current growth, Wall Street's estimates of 21% EBIT growth and 18% OCF growth seem conservative compared to the tailwinds the company is benefiting from right now. Nightview Capital stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q4 2024 investor letter: 'Core Opportunity: Meta Platforms, Inc.'s (NASDAQ:META) platforms—Instagram, Facebook, WhatsApp, and Messenger—reach nearly half the world's population daily, making it one of the most powerful advertising ecosystems globally. With investments in AI and augmented reality (AR), we believe Meta is also creating significant optionality for long-term growth. Overall, META ranks 1st on our list of top buzzing stocks in May. While we acknowledge the potential of META, our conviction lies in the belief that under the radar AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than META but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Time of India
14-05-2025
- Business
- Time of India
Microsoft's mass layoffs come despite a streak of profitable quarters
Microsoft began laying off about 6,000 workers, nearly 3% of its entire workforce, on Tuesday, in its largest job cuts in more than two years. The mass layoffs come just weeks after the tech giant reported strong sales and profits that beat Wall Street expectations for the January-March quarter. So, why is the Satya Nadella-led company firing thousands if its top and bottom lines are in good shape? Details on the layoffs Notices to employees began going out on Tuesday. Hardest hit was the tech giant's home state of Washington, where Microsoft informed state officials it was cutting 1,985 workers tied to its Redmond headquarters Many of the affected people were in software engineering and product management roles. The layoffs will impact all levels, teams and geographies. The cuts will focus on reducing the number of managers, as the company hopes to remove unnecessary layers. Not the first time After a smaller round of layoffs in January, this will be the tech giant's largest cuts since 2023, when it shed 10,000 jobs, or nearly 5% of its workforce, as part of a broader industry trend post-pandemic. Live Events Strong financials Microsoft's results showed unexpected strength in its business. Sales surpassed $70 billion, up 13% from the same period a year earlier. Profit rose to $25.8 billion, up 18%. The results far surpassed Wall Street's expectations. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories Microsoft said revenue at its Azure cloud division rose 33% in the third quarter ended March 31, exceeding estimates of 29.7%, according to financial research firm Visible Alpha, part of S&P Global. AI contributed 16 percentage points to the growth, up from 13 points in the previous quarter. Rationale for the layoffs Microsoft has been investing heavily in AI, upping its expenditure for 10 consecutive quarters. The company is shifting resources toward these high-growth areas, and therefore cutting staff. The company is following other tech giants, including Meta and Amazon, which are also laying off scores of employees to optimise operations for long-term efficiency. This includes laying off middle management, automating tasks, and consolidating overlapping roles. In 2025 alone, Google has laid off about 200 employees , Meta has cut 3,600 jobs or 5% of its workforce, and Apple has laid off 100 employees in its digital services arm. DA Davidson analyst Gil Luria said the layoffs showed Microsoft was "very closely" managing the margin pressure created by its heightened AI investments. "We believe that every year Microsoft invests at the current levels, it would need to reduce headcount by at least 10,000 in order to make up for the higher depreciation levels due to their capital expenditures," he said.
The Hindu
14-05-2025
- Business
- The Hindu
Microsoft lays off 3% of workforce; Nvidia to sell AI chips to Saudi Arabia; Android unveils design, Gemini updates
Microsoft lays off 3% of workforce Microsoft is laying off 6,000 workers, which is around 3% of its workforce in the biggest job cut announced by the company in more than two years. Most of the affected employees were from Washington, the headquarters of the company with 1,985 workers losing jobs. The Satya Nadella-led company said that although the job cuts will be across teams and globally but they are being done with the goal to reduce the number of managers. The company released their earnings recently showing robust sales and profits that beat market expectations for the quarter. Earlier in January, Microsoft had announced a smaller round of layoffs based on performance. The last round of massive job cuts was in 2023 when the company fired 10,000 workers or almost 5% of its workforce. Company CFO, Amy Hood had said during the earnings call that they were looking to 'increase agility by reducing layers with fewer managers.' The layoffs will also be from the XBox and LinkedIn businesses. The company also has a $80 billion budget for the fiscal year ending June for building AI infrastructure and data centers. Nvidia to sell AI chips to Saudi Arabia AI chipmaker Nvidia will be shipping 18,000 chips to Saudi Arabia after announcing a partnership with a sovereign wealth fund-owned AI startup Humain. The news sent Nvidia shares soaring with CEO Jensen Huang's net worth touching around $120 billion. The deal is one of the many partnerships that have been announced as U.S. President Donald Trump is on a tour to Saudi Arabia, Qatar and UAE. Nvidia's advanced Blackwell AI chips will be used will be used in a 500-megawatt data centre there, the Saudi Arabia-U.S. Investment Forum in Riyadh said. Nvidia said that the first set of chips deployed will be the GB300 Blackwell chips, which were announced earlier this year. Qualcomm also signed a deal with Humain to build a data centre central processor (CPU). AMD is also among the chipmakers that have signed an agreement with Humain. The Lisa Su-led company plans to invest up to $10 billion to deploy 500 megawatts of AI hardware infrastructure over five years. Additionally, Saudi Arabian firm DataVolt will be investing $20 billion in AI data centres in the U.S. Android unveils design, Gemini updates Android has announced a host of updates to its design and new features for better user experience, personalisation and efficiency across platforms, along with more integrations with Gemini. Users will have new colour themes, more responsive interface components and emphasised typography not just on Android smartphones and tablets but also on Wear OS. The upgraded home screen is more organised has quick settings for tailored access and more efficient software updates without lesser battery life. There will also be 'glanceable live updates' so users can track orders easily and get real-time information directly. Google's AI model Gemini will also be a core part of Android now with Gemini Live and more integrations with camera and screen sharing. Gemini will also bring its conversational AI feature to smartwatches, Google TV, Android Auto and Android XR platforms making actions more intuitive.
Globe and Mail
05-03-2025
- Business
- Globe and Mail
Why You Should Snap Up Microsoft Stock as It Hits New 52-Week Lows
The artificial intelligence (AI) rally that propelled U.S. tech stocks higher in 2023 and 2024 and helped the S&P 500 Index ($SPX) post over 20% gains for two consecutive years has now faded. Ever since DeepSeek revealed its ultra-low-cost AI model, attention has instead shifted to China, with names like Alibaba (BABA) rallying smartly and outperforming U.S. tech peers. While all prominent AI plays – including the once formidable Nvidia (NVDA) – are looking weak as investors weigh the longevity of the trade, Microsoft's (MSFT) underperformance stands out. The Satya Nadella-led company never revisited its July 2024 highs and is the only constituent of the 'Magnificent 7' that hasn't hit fresh record highs in that timeframe. MSFT stock was the worst-performing member of the coveted group in 2024, gaining a mere 12%. The stock has also looked weak this year, falling to its 52-week low on March 4 before recovering slightly. In this article, we'll discuss whether Microsoft stock is a buy now, even as the 'AI trade' has withered away. Let's begin by examining what's been pulling down the stock in the first place. Why Has Microsoft Stock Been Dropping? Microsoft stock has dropped from its July peak for multiple reasons. First, the company hasn't been able to convince markets about its ability to monetize its outsized AI capex. Despite spending heavily on AI — including a $14 billion investment in OpenAI — Microsoft's overall revenue and profit growth haven't grown proportionately. If anything, sales growth has fallen to multi-quarter lows, while higher depreciation expenses on AI investments and its share of losses in OpenAI have taken a toll on its profitability. Secondly, the company's financial performance has also failed to impress for the last three quarters, and the stock has closed in the red after the releases. Third, DeepSeek's low-cost AI model has raised concerns over OpenAI's ability to charge premium pricing for its models. Since Microsoft is the biggest investor in privately held OpenAI, its stock price reflects the apprehensions toward the ChatGPT parent. Last but not least, Microsoft was trading at rich valuations and looked ripe for a correction. Is MSFT Stock a Buy Now? Amid the recent correction, Microsoft's valuations have become a lot more reasonable, and the stock now trades at 29.7x its expected earnings over the next 12 months. MSFT's valuations are below their 5-year average, although they remain elevated compared to the 10-year average. However, Microsoft is a much different company now than it was 10 years ago. The company's revenue stream is diversified and spread across the core Windows and Office franchises, premium subscription products, advertising, cloud, gaming, and LinkedIn. Microsoft is less cyclical than its Magnificent 7 peers and has more consistent cash flows, making it a defensive play. I believe the worst is nearly over for Microsoft amid the expected rebound in growth. Consensus estimates call for the company's revenue and profit growth to accelerate in the next fiscal year after the slowdown in the current year. Microsoft expects its capex growth rate in the fiscal year 2026 to be lower than in the current year. CFO Amy Hood said during the fiscal Q2 earnings call that the 'mix of spend will begin to shift back to short-lived assets, which are more correlated to revenue growth.' On a related note, recent reports suggest that Microsoft has scaled back its spending on AI data centers. While this suggests that the demand for AI is perhaps not as strong as previously envisioned, Microsoft maintained its guidance of spending $80 billion towards building AI infrastructure this fiscal year. Lower growth in capex coupled with the expected increase in earnings will help fuel Microsoft's free cash flows in the fiscal year 2026, which would bode well for the stock. Moreover, given the heightened volatility in other Big Tech peers, investors might find some solace in relatively defensive plays like Microsoft. Microsoft Stock Forecast Of the 43 analysts covering the stock, 36 rate it as a 'Strong Buy.' Four analysts rate MSFT as a 'Moderate Buy' and three as a 'Hold.' Microsoft's mean target price of $508.83 is almost 31% higher than the March 4 closing price, while its Street-high target price of $600 is 54.4% higher. Overall, with reasonable valuations, expectations of a growth rebound, and a possibility of significantly higher free cash flows in the next fiscal year, I find MSFT stock a good buy at these price levels.
