Latest news with #SectorSpotlight
Business Insider
02-08-2025
- Business
- Business Insider
Sector Spotlight: Meta, Microsoft stand out following respective Q2 results
Welcome to the latest edition of 'Sector Spotlight,' where The Fly looks at a new industry every week and highlights its happenings. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. MEGACAP NEWS: The U.K.'s CMA has found that Microsoft's (MSFT) software licensing terms harm competition in the cloud market, and may open a probe into Microsoft and Amazon (AMZN) in 2026. The finding by an independent panel of the Competition and Markets Authority said on Thursday that the U.K. cloud market 'is not working well' and recommended the agency impose conduct requirements on Microsoft and Amazon to boost competition. The CMA's panel found that the cloud market was highly concentrated, with Amazon Web Services and Microsoft's Azure each commanding up to 40% of UK customer spending, with Google (GOOGL) trailing in third place. 'The CMA has said that it will keep under review possible options for further SMS designation investigations, and it anticipates that options will be considered by the CMA Board in early 2026. We expect that our findings and recommendations will be taken into account as part of its decision.' Top White House officials told a group of rare earths firms last week that they are pursuing a pandemic-era approach to boost U.S. critical minerals production and curb China's market dominance by guaranteeing a minimum price for their products, five sources familiar with the plan told Reuters, Ernest Scheyder and Jarrett Renshaw reported. The previously unreported July 24 meeting was led by Peter Navarro, President Donald Trump's trade advisor, and David Copley, a National Security Council official tasked with supply chain strategy. It included ten rare earths companies plus tech giants Apple (AAPL), Microsoft and Corning (GLW), which all rely on a consistent supply of critical minerals to make electronics, the sources said. The Italian Competition Authority, acting in close cooperation with the competent departments of the European Commission, has decided to launch an investigation into Meta Platforms., Meta Platforms Ireland , WhatsApp Ireland and Facebook Italy – referred to as Meta – over a suspected abuse of dominant position in violation of article 102 of the Treaty on the Functioning of the European Union. As of March 2025, Meta – which holds a dominant position in the market for consumer communications apps – decided to pre-install its artificial intelligence service, named Meta AI, by combining it with its WhatsApp service, without any prior request from users. Furthermore, Meta AI is placed in a prominent position on the screen and integrated into the search bar. By combining Meta AI with WhatsApp, Meta appears capable of channelling its customer base into the emerging market, not through merit-based competition, but by 'imposing' the availability of the two distinct services upon users, potentially harming competitors, the ICA says. According to the Authority, there is thus a risk that users may become 'locked in' or functionally dependent on Meta AI, not least because, by using the information provided over time, it appears that the responses generated by the service become increasingly useful and relevant. EARNINGS RECAP: Apple share grew 2% following its second quarter earnings beat. Apple CEO Tim Cook said in the earnings release: 'Today Apple is proud to report a June quarter revenue record with double-digit growth in iPhone, Mac and Services and growth around the world, in every geographic segment . At WWDC25, we were excited to introduce a beautiful new software design that extends across all of our platforms, and we announced even more great Apple Intelligence features.' The company added that tariffs will add about $1.1B in costs in Q4. Barclays analyst Tim Long raised the firm's price target on Apple to $180 from $173 and maintained an Underweight rating on the shares. The company reported a fiscal Q3 beat, driving by higher iPhones and Macs with slightly better Services, the analyst noted. The firm believes demand pull-ins and China subsidies helped the results. It keeps an Underweight rating on Apple's regulatory, China, and artificial intelligence risk. On the other hand, Amazon shares were down 6% last night after reporting Q2 results despite beating analyst expectations. Andy Jassy, president and CEO, Amazon, said: 'Our conviction that AI will change every customer experience is starting to play out as we've expanded Alexa+ to millions of customers, continue to see our shopping agent used by many millions of customers, launched AI models like DeepFleet that optimize productivity paths for our 1M+ robots, made it much easier for software developers to write code with Kiro, launched Strands to make it easier to build AI agents, and released Bedrock AgentCore to enable agents to be operated securely and scalably. Our AI progress across the board continues to improve our customer experiences, speed of innovation, operational efficiency, and business growth, and I'm excited for what lies ahead.' Barclays increased its price target on to $275 from $240 and reiterated an Overweight rating on the shares post the Q2 report. The firm says nearly every line in Amazon's retail business accelerated in the quarter. While management's tone around the second half of 2025 'sounds upbeat,' the post-earnings share selloff isn't surprising after the underperformance versus Azure, the analyst told investors in a research note. Meta Platform's stock gained 11% after it surpassed street expectations in Q2. The company noted that 3.4B people are using at least one of its apps each day. Mark Zuckerberg, Meta founder and CEO, said: 'We've had a strong quarter both in terms of our business and community. I'm excited to build personal superintelligence for everyone in the world.' HSBC upgraded Meta Platforms to Buy from Hold with a price target of $900, up from $610. The company reported strong Q2 results as its artificial intelligence tools and network effect supported double-digit revenue growth, the analyst told investors in a research note. HSBC believes Meta is well positioned to outpace digital advertising market growth. The company's AI capabilities improve targeting and the quality of content, creating new growth opportunities, contends the firm. It cites higher operational forecasts and a higher valuation multiple for the upgrade. Microsoft jumped 9% following its second quarter beat. 'Cloud and AI is the driving force of business transformation across every industry and sector,' said Satya Nadella, chairman and chief executive officer of Microsoft. 'We're innovating across the tech stack to help customers adapt and grow in this new era, and this year, Azure surpassed $75 billion in revenue, up 34 percent, driven by growth across all workloads.' 'We closed out the fiscal year with a strong quarter, highlighted by Microsoft Cloud revenue reaching $46.7 billion, up 27% year-over-year,' said Amy Hood, executive vice president and chief financial officer of Microsoft. HSBC upgraded Meta to Buy from Hold with a price target of $900, up from $610. The stock in premarket trading is up 11%, or $77.02, to $772.23. The company reported strong Q2 results as its artificial intelligence tools and network effect supported double-digit revenue growth, the analyst tells investors in a research note. HSBC believes Meta is well positioned to outpace digital advertising market growth. The company's AI capabilities improve targeting and the quality of content, creating new growth opportunities, contended the firm. It cites higher operational forecasts and a higher valuation multiple for the upgrade.
Business Insider
26-07-2025
- Business
- Business Insider
Sector Spotlight: Demand, backlog expansion drive Q2 results in defense sector
Welcome to the latest edition of 'Sector Spotlight,' where The Fly looks at a new industry every week and highlights its happenings. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. DEFENSE SECTOR NEWS: Booz Allen (BAH) was awarded a $315M contract with a maximum performance period of up to five years to deliver the Advanced Battle Management System Distributed Battle Management Node Phase II Tactical Operations Center-Light prototype for the Department of the Air Force Program Executive Office for Command, Control, Communications, and Battle Management. Booz Allen is partnering with L3Harris Technologies (LHX) for this rapid prototyping effort aimed at enabling Combined Joint All-Domain Command and Control. Lockheed Martin was awarded a $999M indefinite-delivery/indefinite-quantity contract for Joint Air to Surface Standoff Missile and Long-Range Anti-Ship Missile production support. This contract provides for lifecycle support for all efforts related to JASSM, LRASM and all their variants in the areas of system upgrades, integration, production, sustainment, management and logistical support. Work will be performed at Orlando, Florida, and is expected to be complete by July 17, 2030. This contract was a sole source acquisition. No funds are being obligated at the time of award. The Air Force Life Cycle Management Center is the contracting activity. EARNINGS RECAP: L3Harris Technologies delivered a beat and raise quarter in Q2, posting a record book to bill ratio. 'We delivered impressive second-quarter results, led by a record book-to-bill of 1.5x, solid organic growth, and year-over-year adjusted segment operating margin expansion for the seventh consecutive quarter. This marks a clear inflection point, with our strongest top-line growth in six quarters and meaningful progress towards our 2026 Financial Framework. Our Trusted Disruptor strategy continues to drive differentiated, mission-critical solutions that meet our customers' evolving needs while creating value for shareholders,' said Christopher Kubasik, Chair and CEO. Kubasik added, 'Defense is entering a generational investment cycle, as U.S. and allied budgets grow rapidly. Demand is accelerating, and our portfolio is aligned with key growth areas – Golden Dome, space, missiles, shipbuilding, autonomy, and resilient communications. With the flexibility of our business-model agnostic approach – able to win as a prime, sub, or merchant supplier – a focused national security portfolio, and competitive momentum from LHX NeXt, we're confident in our path to sustained profitable growth and long-term value creation.' Susquehanna raised the firm's price target on L3Harris to $320 from $300 and maintained a Positive rating on the shares. The firm updated its model following the Q2 results while noting concurrent with earnings, certain 2025 guidance items and 2026 target items were increased. Susquehanna believes the company is well positioned to benefit from domestic defense spending priorities, including Golden Dome, missile capabilities, and resilient communications. Textron (TXT) also beat expectations in the second quarter and maintained its full-year 2025 EPS guidance. 'In the quarter, we saw revenue growth in both our commercial aircraft and helicopter businesses, as well as in Bell's FLRAA program, now known as the MV-75,' said CEO Scott Donnelly. 'At Textron Aviation, operations continued to improve as production ramped.' Susquehanna increased its price target on Textron to $95 from $90 and reiterated a Positive rating on the shares. The firm said 2Q25 results beat estimates with revenue of $3.72bn and EPS of $1.55 and noted the company continues to see broad-based demand across the Aviation portfolio. General Dynamics (GD) noted that Q2 results exceeded their expectations, The company surpassed analyst expectations as well. 'During the first half of the year, each of our four segments achieved growth in revenue and earnings, with margins on a companywide basis expanding 50 basis points over the same period last year,' said Phebe Novakovic, chairman and chief executive officer. 'Our strong cash flow and healthy backlog position us well to have a good second half.' Wolfe Research upgraded General Dynamics to Outperform from Perform with a $360 price target. The firm cited the company's Q2 beat with an improved free cash flow and order outlook for the upgrade. The quarter 'should be the beginning and not the end,' the analyst told investors in a research note. Wolfe sees an additional 14% upside in the shares. Lockheed Martin (LMT), on the other hand, fell short of consensus in Q2, citing the negative impact of pre-tax losses on programs of $1.6B and other charges of $169M. While the company did cut FY25 EPS guidance, it maintained its FY25 revenue outlook. Lockheed Martin chairman, president and CEO Jim Taiclet commented, 'Based in part on this record of performance as well as the promise of several advanced technologies in development, our U.S. and allied customers are asking us to elevate and accelerate many key programs. For example, several allied nations have recently announced additional F-35 purchases, the U.S. Army has awarded more than $1 billion in missile-related contracts so far, and the U.S. Space Force is ordering additional GPS IIIF satellites. At the same time, our ongoing program review process identified new developments that caused us to re-evaluate the financial position on a set of major legacy programs. As a result, we are taking a number of charges this quarter to address these newly identified risks. We remain committed to delivering these critical capabilities that our customers are counting on and are fully focused on the growth inflection we expect as the result of heightened interest and demand for Lockheed Martin's products and technologies.' RBC Capital lowered the firm's price target on Lockheed Martin to $440 from $480 and kept a Sector Perform rating on the shares. Lockheed Martin's Q2 results were 'soft,' with $1.6B of program losses driving a 78% miss in EPS, the analyst noted. The path to free cash flow growth over the next few years is challenged, the firm said. RTX (RTX) beat Q2 expectations, cut its FY25 EPS view and raised its FY25 revenue outlook. 'We continued our momentum in the second quarter with organic sales and profit growth* across all three segments, including 16 percent commercial aftermarket growth,' said RTX chairman and CEO Chris Calio. 'Our backlog grew to $236 billion, up 15 percent versus prior year, and we secured major awards for our geared turbofan engines and integrated air and missile defense capabilities in the quarter.' Morgan Stanley elevated its price target on RTX to $180 from $165 and keeps an Overweight rating on the shares. The firm named the stock its 'Top Pick in Aerospace' after the company reported a Q2 beat. Given its strong underlying fundamentals and demand across its end markets, RTX should be able to narrow the valuation gap to premium peers, the analyst argued. Northrop Grumman (NOC) exceeded street expectations in Q2, noting its EPS included a $1.04 benefit from the training services divestiture completed in the quarter. 'The Northrop Grumman team delivered a strong second quarter, with increased sales and outstanding operating performance,' said Kathy Warden, chair, chief executive officer and president. 'We continue to see growing demand globally for our broad range of product offerings, which resulted in 18% international sales growth in the quarter. With confidence in our team and our ability to deliver for our customers, we are increasing our full-year guidance for segment operating income, EPS and free cash flow.' BTIG boosted the firm's price target on Northrop Grumman to $630 from $575 and backed a Buy rating on the shares following the quarterly results. Northrop Grumman remains one of the best ways to play the growth in international defense spending at the large-cap level, the analyst contended.
Business Insider
12-07-2025
- Business
- Business Insider
Sector Spotlight: President Trump's 50% copper tariff shakes up mining industry
Welcome to the latest edition of 'Sector Spotlight,' where The Fly looks at a new industry every week and highlights its happenings. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. MINING SECTOR NEWS: Hudbay Minerals (HBM) continues to respond to the wildfire situation in northern Manitoba and is working closely with local and provincial authorities to ensure its employees remain safe as well as comply with the mandatory wildfire evacuation order effective for the town of Snow Lake. As a result, the company has enabled a controlled, safe and orderly temporary suspension of operations in Snow Lake. Through the company's emergency preparedness procedures, all assets have been secured, and a limited workforce remains at site to conduct ongoing monitoring programs and assist with emergency activities. Hudbay believes its infrastructure and facilities in Snow Lake are well-protected from the wildfires and have a low risk of being damaged. Activities in Flin Flon continue unaffected given the current wildfires are not located near the city of Flin Flon. Some exploration activities near Snow Lake have been paused. Hudbay expects operations to resume efficiently once the wildfire situation improves. The company continues to expect to achieve its annual guidance metrics for Manitoba in 2025 despite the temporary wildfire impacts. President Donald Trump stated in a post to Truth Social, 'I am announcing a 50% TARIFF on Copper, effective August 1, 2025, after receiving a robust NATIONAL SECURITY ASSESSMENT. Copper is necessary for Semiconductors, Aircraft, Ships, Ammunition, Data Centers, Lithium-ion Batteries, Radar Systems, Missile Defense Systems, and even, Hypersonic Weapons, of which we are building many. Copper is the second most used material by the Department of Defense! Why did our foolish (and SLEEPY!) 'Leaders' decimate this important Industry? This 50% TARIFF will reverse the Biden Administration's thoughtless behavior, and stupidity. America will, once again, build a DOMINANT Copper Industry. THIS IS, AFTER ALL, OUR GOLDEN AGE!' President Donald Trump indicated the U.S. would implement a higher-than-expected 50% tariff on copper imports, which has since spurred a spike in New York futures and a drop in the global benchmark, Katharine Gemmell and Martin Richie of Bloomberg reported. The plan marks the latest move in a difficult period for industrial commodities, as the U.S. leader works to push for more mining and smelting at home. Rio Tinto's new CEO should be open to merger and acquisition deals as well as sharpening productivity and cost cuts, Melanie Burton and Clara Denina of Reuters FCX) to Neutral from Buy with a price target of $50, up from $45. While UBS remains constructive on the medium-term outlook for copper, it expects softening in demand and fundamentals to weigh on prices over the next six months. The firm now sees a balanced risk/reward on Freeport shares with potential downside to copper prices. National Bank raised the firm's price target on Teck Resources (TECK) to C$66 from C$65 and reiterated an Outperform rating on the shares. Additionally, National Bank increased its price target on Hudbay Minerals to C$16.50 from C$14.50 and maintained an Outperform rating on the shares. Scotiabank boosted the firm's price target on Freeport-McMoRan to $52 from $48 and kept an Outperform rating on the shares. The firm believes Freeport-McMoRan is the biggest winner of punitive Copper tariffs given its domestic production and exposure to premium Comex prices, the analyst told investors in a research note. JPMorgan elevated its price target on Freeport-McMoRan to $56 from $42 and held an Overweight rating on the shares. The firm also heightened its price target on Teck Resources to $46 from $41 and reaffirmed an Overweight rating on the shares. JPMorgan increased the price target as part of a Q2 earnings preview for base metals. It increased copper price targets to reflect higher commodity pricing and easing recession risk. Stifel initiated coverage of Teck Resources with a Hold rating and C$60 price target. Stifel also started coverage of Freeport-McMoRan with a Buy rating and $56 price target. The firm, which has a 'tactical' gold price target of $3,800/oz on a six-to-twelve-month view, argues that gold equities can 'go much higher' compared to the price of gold and S&P 500. On copper, which the firm says is 'under-owned,' it advises increased exposure to take advantage of heightened supply stresses and estimates the incentive copper price is $5.00/lb. Citi raised the firm's price target on Freeport-McMoRan to $48 from $44 and backed a Neutral rating on the shares as part of a Q2 earnings preview on Tuesday. The firm also added an 'upside 90-day catalyst watch' on the shares. Citi expects a 25% tariff on copper in the next 90 days and believes Freeport will be the 'only real winner' in the copper group given its large U.S. operations. Veritas analyst Martin Pradier initiated coverage of Hudbay Minerals with a Buy rating and C$17 price target. Berenberg lowered the firm's price target on BHP Group (BHP) to 1,700 GBp from 1,900 GBp and kept a Hold rating on the shares. Additionally, the firm decreased its price target on Anglo American (NGLOY) to 1,900 GBp from 2,000 GBp and kept a Sell rating on the shares. Last week, JPMorgan lowered the firm's price target on Southern Copper (SCCO) to $79 from $83.50 and maintained a Neutral rating on the shares. The firm adjusted its estimates to incorporate Q1 results, the latest macro and forex estimates and updated commodities prices. Berenberg downgraded Rio Tinto to Hold from Buy with a price target of 4,700 GBp, down from 6,200 GBp. The firm is taking a more cautious view on iron ore and reduced estimates by about 5% over 2025-27, citing a lack of clear stimulus from China as 'a key driver of this reduction,' the analyst tells investors.
Business Insider
28-06-2025
- Business
- Business Insider
Sector Spotlight: Instagram, TikTok coming to a TV screen near you
Welcome to the latest edition of 'Sector Spotlight,' where The Fly looks at a new industry every week and highlights its happenings. Confident Investing Starts Here: TECH SECTOR NEWS: Germany's data protection commissioner, Meike Kamp, has asked Apple (AAPL) and Google (GOOGL) to remove Chinese AI startup DeepSeek from their app stores in the country due to concerns about data protection, Reuters reported. The two U.S. companies must now review the request promptly and decide whether to block the app in Germany, she said in a statement on Friday, according to the report. According to EU's competitive chief Teresa Ribera, the European Union's crackdown on Apple, Meta (META), and Google (GOOGL) is not a bargaining chip in negotiations with the U.S. President Donald Trump, Samuel Stolton and Oliver Crook of Bloomberg wrote. In an interview, Ribera rejected suggestions that the enforcement of the Digital Markets Act, DMA, may be sacrificed to dodge punitive EU tariffs pitched by the White House. 'Of course not,' Ribera said on Bloomberg TV. 'We do not challenge the United States on how they implement their rules or how they adopt regulations. We deserve respect in the same way.' Meta's Instagram and TikTok are working on versions of their apps customized to run on TV screens, following YouTube's success in attracting a TV audience, The Information's Kaya Yurieff and Kalley Huang reported. A group of authors have filed a lawsuit against Microsoft in a New York federal court, claiming the company used nearly 200,000 pirated books without permission to train its Megatron AI model, Reuters' Blake Brittain wrote. Kai Bird, Jia Tolentino, Daniel Okrent and several others alleged that Microsoft used pirated digital versions of their books to teach its AI to respond to human prompts. The complaint against Microsoft came a day after a California federal judge ruled that Anthropic made fair use under U.S. copyright law of authors' material to train its AI systems but may still be liable for pirating their books. Earlier in the week, a federal judge has found Anthropic's use of books to train its AI models was legal in some circumstances, but not others, Meg Tanaka of The Wall Street Journal reported. Judge William Alsup of the Northern District of California ruled Anthropic's use of copyrighted books for AI model training was legal under U.S. copyright law if it had purchased those books. The ruling does not apply to the more than 7M books the company obtained through 'pirated' means. Anthropic is backed by Amazon (AMZN) and Google. Vasi Philomin, Amazon Web Services' VP overseeing generative AI development, told Reuters in an email that he has left the e-commerce giant for another company, without providing details. Meta CEO Mark Zuckerberg has hired three AI researchers from Microsoft-backed (MSFT) OpenAI to help with his superintelligence efforts, the Wall Street Journal's Meghan Bobrowsky wrote. The social media giant poached Lucas Beyer, Alexander Kolesnikov and Xiaohua Zhai from OpenAI's Zurich office. The three staff established the Zurich office late last year. OpenAI and Microsoft are in contract negotiations that hinge on when OpenAI's systems will reach artificial general intelligence, The Wall Street Journal's Berber Jin reported. The contract stipulates that OpenAI can limit Microsoft's access to its tech when its systems reach AGI, which Microsoft is fighting. Microsoft hopes to remove the AGI clause or secure exclusive access to OpenAI's IP even after AGI is declared, according to the report. OpenAI CEO Sam Altman had a 'super nice' call with Microsoft CEO Satya Nadella on Monday and discussed their future working partnership, Altman said this week in a New York Times podcast. 'Obviously in any deep partnership, there are points of tension and we certainly have those,' Altman said. 'But on the whole, it's been like really wonderfully good for both companies.' Cloud computing currently generates large profits for Amazon (AMZN), Microsoft (MSFT), and Google (GOOGL), but this now faces a threat with the rise of AI cloud specialists and Nvidia, a new industry power broker, Asa Fitch of The Wall Street Journal wrote. Nvidia launched its own cloud-computing services two years ago and has nurtured upstarts competing with big cloud companies, investing in CoreWeave (CRWV) and Lambda. Amazon plans to invest GBP 40B in the UK over the next three years. Amazon said via LinkedIn: 'This investment builds on Amazon's 27-year history in the UK, where we've grown to employ over 75,000 people across over 100 sites, reaching every region of the country. This historic investment will create thousands of full-time jobs, including 2,000 jobs at the previously announced state-of-the-art fulfillment center in Hull, 2,000 jobs at another in Northampton, and additional positions at new sites in the East Midlands and at delivery stations across the country.' OpenAI has quietly designed a rival to compete with Microsoft Office and Google Workspace, with features that allow people to collaborate on documents and communicate via chat in ChatGPT, The Information's Amir Efrati and Natasha Mascarenhas reported, citing two people who have seen the designs. Launching these features would allow OpenAI to compete more directly against Microsoft, its biggest investor and business partner, the report notes. Starting June 24, a limited number of Waymo autonomous vehicles will gradually become available on the Uber (UBER) app for riders in select areas of Atlanta, Georgia, the company announced in a blog post. The Competition and Markets Authority is proposing to designate Google with 'strategic market status' in general search and search advertising. The CMA will consult on the proposal ahead of a final decision in October. If designated, the CMA would be able to introduce targeted measures to address specific aspects of how Google operates search services in the UK. The CMA has also published a roadmap of potential actions it could prioritize were Google to be designated. Early priorities include: requiring choice screens for users to access different search providers; ensuring fair ranking principles for businesses appearing on Google search; more transparency and control for publishers whose content appears in search results; and portability of consumer search data to support innovation in new products and services. Google search accounts for more than 90% of all general search queries in the UK, the CMA said. CMA CEO Sarah Cardell said: 'These targeted and proportionate actions would give UK businesses and consumers more choice and control over how they interact with Google's search services – as well as unlocking greater opportunities for innovation across the UK tech sector and broader economy.' The CMA welcomes views on its proposed designation decision and accompanying roadmap. A final decision on SMS designation will be made by the deadline of October 13. Apple is in last-minute talks with EU regulators over making changes to its App Store to avoid a series of escalating EU fines due to come into effect this week, The Financial Times' Barbara Moens wrote. People involved in the negotiations say Apple is expected to offer concessions on its 'steering' provisions that stop users accessing offers outside the App Store. Regulators had ordered the company to revise its rules within two months of its initial EUR 500M fine, and people with knowledge of the talks say Apple is expected to announce some concessions that buy the company more time, as the commission would first assess those changes before making a final decision. Discussions have also involved Apple's 'Core Technology Fee,' which requires developers to pay for each annual install after 1M downloads.
Business Insider
14-06-2025
- Automotive
- Business Insider
Sector Spotlight: Automakers get rare earth export license clearance from China
Welcome to the latest edition of 'Sector Spotlight,' where The Fly looks at a new industry every week and highlights its happenings. Confident Investing Starts Here: AUTO SECTOR NEWS: Tesla (TSLA) upgraded its Model S and Model X cars in the U.S. and raised the prices of all configurations of the two models by $5,000, Reuters reported. The NHTSA announced the next step in its new Automated Vehicle Framework. 'To facilitate automated driving systems technology reaching its full potential to transform roadway safety, NHTSA is streamlining its exemption process for commercial deployment of vehicles and adopting a dynamic and flexible approach to evaluating these exemptions. These improvements will allow NHTSA to process ADS and other exemptions more quickly while also allowing NHTSA to prioritize safety through a tailored and progressive operational oversight approach,' the agency said. Tesla has filed a lawsuit against former Optimus engineer Zhongjie Li, who worked at Tesla from 2022 to 2024, accusing him of stealing humanoid robot information and setting up a rival startup, Bloomberg's Dana Hull wrote. 'Less than a week after he left Tesla, Proception was incorporated,' according to the complaint. 'And within just five months, Proception publicly claimed to have 'successfully built' advanced humanoid robotic hands — hands that bear a striking resemblance to the designs Li worked on at Tesla.' President Trump received a phone call from Tesla CEO Elon Musk late on Monday night, which led to a public expression of regret from Musk overnight for his social media posts, Jonathan Swan and Theodore Schleifer of New York Times reported, citing three people briefed on the call. Musk's call came after he spoke privately on Friday with Vice President JD Vance and the White House chief of staff, Susie Wiles, about a path to a truce between the two men. In a post on X, Tesla CEO Musk responded to question about when the first public robotaxi rides will start, stating: 'Tentatively, June 22. We are being super paranoid about safety, so the date could shift. First Tesla that drives itself from factory end of line all the way to a customer house is June 28.' Nissan (NSANY) supplier Marelli Holdings announced that it has commenced voluntary chapter 11 cases in the United States Bankruptcy Court for the District of Delaware in order to comprehensively restructure its long-term debt obligations. Approximately 80% of the company's lenders have signed an agreement to support the restructuring, which will deleverage Marelli's balance sheet and strengthen its liquidity position. Throughout this process and moving forward, Marelli does not expect any operational impact from the chapter 11 process, and the company 'will continue to work closely with its customers, suppliers, and partners to innovate and invest in its portfolio of advanced technologies that will differentiate the vehicles of the future and transform mobility,' it said. General Motors (GM) announced plans to invest about $4B over the next two years in its domestic manufacturing plants to increase U.S. production of both gas and electric vehicles. The new investment will give GM the ability to assemble more than two million vehicles per year in the U.S. This announcement comes on the heels of the company's recently announced plan to invest $888M in the Tonawanda Propulsion plant near Buffalo, New York to support GM's next-generation V-8 engine. Intrado Life & Safety and Toyota Connected North America announced a collaboration to provide Advanced Automatic Collision Notification, telematics data to public safety answering points in an i3-compliant format. The data, delivered via AT&T's nationwide ESInet solution, helps 9-1-1 telecommunicators quickly deploy appropriate emergency response resources based on accident severity. Daimler Truck AG (DTRUY), Mitsubishi Fuso Truck and Bus Corporation, Hino Motors, and Toyota (TM) concluded definitive agreements for the integration of Mitsubishi Fuso and Hino. Mitsubishi Fuso and Hino will integrate on an equal footing and cooperate in the areas of commercial vehicle development, procurement, and production. They are aiming to start operations in April 2026. Daimler Truck and Toyota will each aim to own 25% of the listed holding company of the integrated Mitsubishi Fuso and Hino. The holding company plans to own 100% of Mitsubishi Fuso and Hino. The intention is to list the holding company on the Prime Market of the Tokyo Stock Exchange. Further details on the scope and nature of the collaboration, including the name of the new holding company, are intended to be announced over the coming months, the companies stated. One of Tesla's top AI-executives, VP of engineering Milan Kovac, has left the company, a setback for the Optimus robotics project, Becky Peterson of The Wall Street Journal wrote. Kovac oversaw Tesla's development of Optimus, a humanoid robot central to Musk's vision of transforming Tesla into a robotics and AI company. China has granted temporary export licenses to rare-earth suppliers of the top three U.S. automakers as supply chain disruptions begin to surface from the country's export curbs on those materials, Reuters' Laurie Chen and David Shepardson reported. At least some of the licenses are valid for six months, the two sources say. It is unclear what quantity or items are covered by the approval Suppliers of General Motors (GM), Ford (F), and Stellantis (STLA) received clearance for some rare earth export licenses on Monday, one source said. ANALYST COMMENTARY: Guggenheim said that while Tesla shares continue to be driven by robotaxi and political narratives in the near-term, the company's fundamentals 'continue to deteriorate at an alarming rate.' The 'soft' Q2 delivery trends confirm demand for the refreshed Model Y has not helped Tesla's sales momentum, says Guggenheim, which expects 'sizable' negative revisions in the coming weeks to Q2 delivery estimates. The firm's 360,000 estimate is well below the consensus of 415,000. Flowing through lower delivery forecasts for Q2 pushes the company's auto gross margin forecast to 11.5%, below the 14.0% consensus, and free cash flow forecast into negative territory, the analyst told. Guggenheim believes Tesla's Q2 should have benefited from pent-up demand for the Model Y refresh, suggesting future delivery volumes and/or pricing could deteriorate further. It believes 2025 and 2026 expectations for Tesla 'remain incredibly optimistic and bullish catalysts for the automotive business continue to be disproven.' Piper Sandler kept an Overweight rating with a $400 price target on Tesla, but contends that the stock will likely sustain its upward momentum over the coming weeks. Driverless Teslas have been spotted on the streets of Austin, Texas and CEO Musk has acknowledged the deployment while predicting licensing agreements, with the 'key component' of the firm's bullish thesis has started to play out, the analyst tells investors in a research note. Piper warns however that any high-profile robotaxi accidents would likely be met with 'violent downside'. Argus downgraded Tesla to Hold from Buy with no price target. The stock 'appears to be currently trading on non-fundamental events,' says the analyst, who is concerned that the 'war of words' between President Trump and Tesla CEO Elon Musk, along with expiration of EV credits, could further weaken demand for new Teslas. While the firm believes AI-related projects such as Cybercab and Optimus are positive for the company and its valuation, it believes a near-term Hold rating is 'prudent at this time,' the analyst said.
