Tag: Computers/Consumer Electronics

The long-simmering rumor of Apple buying Disney is resurfacing as Bob Iger looks to sell assets

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Analysts got to the point early and often during a conference call late Wednesday: What are Disney Chief Executive Robert Iger’s M&A plans, particularly following reports that former Disney executives Kevin Mayer and Tom Staggs, now co-CEOs of Blackstone-backed Candle Media, have been retained in a “consulting capacity” to decide ESPN’s fate?

There is even the unthinkable, unsinkable decades-old rumor floating about again: Could Apple Inc.
AAPL,
-0.90%
acquire Disney
DIS,
-0.73%,
as one Hollywood executive floated to the Hollywood Reporter?

The prospect of an Apple-Disney combo seems far-fetched in a heated regulatory climate, where the Federal Trade Commission is attempting to crack down on Big Tech acquisitions, but it could happen should Disney sell off assets and Apple gobbles up Disney’s direct-to-consumer business that includes streaming service Disney+, some media analysts speculate. Apple could conceivably even buy ABC, which reportedly is on the block. But the path is long and circuitous.

Yet the rumors persist, dating back to Apple co-founder Steve Jobs’ reverence for the Disney brand, and the increasingly overlapping businesses of both companies over the years.

When pressed by analysts during a conference call late Wednesday, Iger declined to discuss the future of Disney’s structure or possible asset sales. When asked if Disney might “plausibly” be snapped up by one company — read Apple — an exasperated Iger said he would not “speculate” on the sale of Disney to a technology company or anyone else, given the current global stance of regulators. The FTC has aggressively challenged mergers from the likes of Microsoft Corp.
MSFT,
-1.17%
and Facebook parent Meta Platforms Inc.
META,
-2.38%,
with limited success.

Since Iger hinted at the potential sale of Disney’s assets in an interview with CNBC last month, rumors have swirled around ESPN.

ESPN and related properties likely could command at least one-third of Disney’s current depressed market cap of about $150 billion, say some media watchers, though Iger has denied ESPN is for sale. He has acknowledged “the sports leader” is seeking “strategic partners” — possibly with the NFL, MLB, NBA and NHL — to generate revenue. Late Tuesday, ESPN stuck up a deal with Penn Entertainment Inc.
PENN,
+9.10%
to create ESPN Bet, a digital sportsbook to launch in the fall in 16 states.

Read more: Penn dumps Barstool for ESPN-branded sports-gambling service

Another possible property being dangled is ABC. But with rights to the NBA Finals and two Super Bowls in the next eight years, it is unclear who would acquire the network and how Disney would replace lucrative sports revenue.

Other properties on the block include cable channels Freeform and Disney Channel, according to a report by the Wall Street Journal.

“If an asset sale happens, will the proceeds be deployed into fortifying its balance sheet or beefing up its remaining operations?” Rick Munarriz, senior media analyst at The Motley Fool, said in an email.

Disney, which is in the midst of a $5.5 billion cost-cutting campaign, is exploring several avenues to prop up sales as linear TV ads shrink, Disney+ subscriptions decline and attendance at Walt Disney World wanes.

Read more: Disney posts smaller streaming loss amid cost-cutting moves, stock slips

Shares of Disney are trading at half their highs from a few years ago, in large part because of dwindling sales and profits at ESPN and Disney’s other cable networks.

Enter Mayer, who previously ran Disney’s strategic planning group for years and engineered a trifecta of mega deals: The acquisition of the aforementioned Pixar Animation Studios from Steve Jobs for $7.4 billion in 2006, the purchase of Marvel Entertainment for $4 billion in 2009, and the acquisition of Lucasfilm for $4.05 billion in 2012. Mayer also led the $71.3 billion acquisition of 20^th Century Fox’s entertainment assets in 2019, which has drawn mixed reviews.

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August 9, 2023
Disney to Significantly Raise Prices of Disney+, Hulu Streaming Services

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Disney to Significantly Raise Prices of Disney+, Hulu Streaming Services

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August 9, 2023
Roblox Misses on Earnings. The Videogame Stock Sinks.

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Roblox Stock Falls Sharply. Blame the Wider Loss.

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August 9, 2023
Pence qualifies for first Republican debate: Here’s who else will be on stage.

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Former Vice President Mike Pence has become the eighth, and perhaps final, candidate to qualify for the first Republican presidential primary debate, setting up a possible prime-time clash with Donald Trump.

That face-off with Trump is not certain, however, because the former president has not yet confirmed whether he will take part in the event.

Several other GOP hopefuls, meanwhile, have also qualified for the debate. Here’s a look at details including who’ll be on stage and when and where the debate will be held.

When and where is the debate?

The first debate of the GOP primary season will be held Aug. 23 in Milwaukee, the same city that will host the party’s 2024 convention. The two-hour debate is scheduled to start at 9 p.m. Eastern time and is being hosted by Fox News.

Fox News parent Fox Corp.
FOX,
+5.56%

FOXA,
+5.59%
and News Corp
NWS,
+0.73%

NWSA,
+0.84%,
parent of MarketWatch publisher Dow Jones, share common ownership.

Besides Pence, who has qualified?

North Dakota Gov. Doug Burgum, former New Jersey Gov. Chris Christie, Florida Gov. Ron DeSantis, former U.N. Ambassador Nikki Haley, entrepreneur Vivek Ramaswamy, South Carolina Sen. Tim Scott and Trump have all met the debate requirements.

Other GOP hopefuls including former Rep. Will Hurd of Texas and Miami Mayor Francis Suarez have not yet made the cut.

Now read: Here are the Republicans running for president in 2024, before their first debate later this month

Also read: Mike Pence says inflation is 16%, but CPI is 3%. This is his logic.

What are the requirements for the Milwaukee debate?

For the first debate, a candidate needs to have at least 1% support in three high-quality national polls or in a mix of state and national polls and must have secured at least 40,000 unique donors.

Getting on stage for the second debate will be tougher. That contest, scheduled for Sept. 27 at the Ronald Reagan Presidential Library in California, will require candidates to have at least 3% support in two national polls, or in one national poll as well as two polls from four of the early-voting states. Candidates must also have at least 50,000 unique donors, as the Associated Press has reported.

Now read: Republican Party raising qualification bar for second presidential primary debate

What has Trump said about attending the debate?

Playing his cards close to the vest, the former president is asking his supporters whether he should be in Milwaukee on Aug. 23. In an email on Saturday, Trump said he thinks it’s “sort of foolish” for him to attend, given his outsized polling lead.

“Hopefully, former President Trump has the courage to show up,” Pence’s communications adviser Devin O’Malley said in a statement on Tuesday.

Read next: Pence, Trump attorney offer conflicting claims over what Trump said ahead of Jan. 6

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August 8, 2023
Palantir announces $1 billion buyback program, stock rises after earnings

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Palantir Technologies Inc. matched expectations with its latest quarterly results Monday while announcing a new $1 billion buyback authorization.

The software company posted its third quarter in a row of GAAP profitability, recording second-quarter net income of $28 million, or 1 cent a share, whereas Palantir
PLTR,
-1.15%
racked up a net loss of $179.3 million, or 9 cents a share, in the year-earlier period. Analysts tracked by FactSet were modeling GAAP earnings per share of 1 cent.

Palantir logged adjusted earnings per share of 5 cents, in line with the FactSet consensus.

Revenue rose to $533 million from $473 million and also met the FactSet consensus. The company notched $232 million in commercial revenue, up 10% from a year before, along with $302 million of government revenue, up 15%.

After initially falling following the report, Palantir shares rose 2.6% in after-hours trading.

“We continue to see unprecedented demand,” Chief Revenue Officer Ryan Taylor told MarketWatch. That includes both “top-of-funnel” conversations with new customers and others expanding their use of Palantir software, as momentum builds for the company’s artificial-intelligence offerings.

Taylor added that Palantir’s U.S. government work has “never been stronger.”

See also: Palantir is ‘the Messi of AI,’ says analyst who thinks its stock can jump 45%

Palantir also announced that its board of directors has approved a stock-buyback program of up to $1 billion. The move comes as the company posted $285 million in adjusted free cash flow during the first half of the year and finished the second quarter with $3.1 billion in cash and equivalents on its balance sheet.

“Our cash flow, balance sheet and the authorization of a billion-dollar buyback show what we believe in for the future of this company,” Chief Financial Officer David Glazer told MarketWatch. The belief is that “AI is a massive opportunity.”

Added Chief Executive Alex Karp in a shareholder letter: “The scale of the opportunity that lies ahead has increased significantly in recent months. And we intend to capture it.”

He noted that the company is in talks with more than 300 additional enterprises about using Palantir’s AI platform, “all of which are searching for an effective and secure means of adapting the latest large language models for use on their internal systems and proprietary data.”

For the third quarter, Palantir expects $553 million to $557 million in revenue, along with GAAP profitability. Analysts tracked by FactSet were modeling $553 million,

Palantir also expects to report GAAP net income for its fourth quarter. It further models upwards of $2.212 billion in full-year revenue, while analysts were looking for $2.210 billion.

Shares of Palantir are up 180% so far this year.

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August 7, 2023
Palantir announces $1 billion buyback program, stock rises after earnings

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Palantir Technologies Inc. matched expectations with its latest quarterly results Monday while announcing a new $1 billion buyback authorization.

The software company posted its third quarter in a row of GAAP profitability, recording second-quarter net income of $28 million, or 1 cent a share, whereas Palantir
PLTR,
-1.15%
racked up a net loss of $179.3 million, or 9 cents a share, in the year-earlier period. Analysts tracked by FactSet were modeling GAAP earnings per share of 1 cent.

Palantir logged adjusted earnings per share of 5 cents, in line with the FactSet consensus.

Revenue rose to $533 million from $473 million and also met the FactSet consensus. The company notched $232 million in commercial revenue, up 10% from a year before, along with $302 million of government revenue, up 15%.

After initially falling following the report, Palantir shares rose 2.6% in after-hours trading.

“We continue to see unprecedented demand,” Chief Revenue Officer Ryan Taylor told MarketWatch. That includes both “top-of-funnel” conversations with new customers and others expanding their use of Palantir software, as momentum builds for the company’s artificial-intelligence offerings.

Taylor added that Palantir’s U.S. government work has “never been stronger.”

See also: Palantir is ‘the Messi of AI,’ says analyst who thinks its stock can jump 45%

Palantir also announced that its board of directors has approved a stock-buyback program of up to $1 billion. The move comes as the company posted $285 million in adjusted free cash flow during the first half of the year and finished the second quarter with $3.1 billion in cash and equivalents on its balance sheet.

“Our cash flow, balance sheet and the authorization of a billion-dollar buyback show what we believe in for the future of this company,” Chief Financial Officer David Glazer told MarketWatch. The belief is that “AI is a massive opportunity.”

Added Chief Executive Alex Karp in a shareholder letter: “The scale of the opportunity that lies ahead has increased significantly in recent months. And we intend to capture it.”

He noted that the company is in talks with more than 300 additional enterprises about using Palantir’s AI platform, “all of which are searching for an effective and secure means of adapting the latest large language models for use on their internal systems and proprietary data.”

For the third quarter, Palantir expects $553 million to $557 million in revenue, along with GAAP profitability. Analysts tracked by FactSet were modeling $553 million,

Palantir also expects to report GAAP net income for its fourth quarter. It further models upwards of $2.212 billion in full-year revenue, while analysts were looking for $2.210 billion.

Shares of Palantir are up 180% so far this year.

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August 7, 2023
Shopify makes progress on free cash flow, but stock moves lower after earnings

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Shopify Inc. easily topped adjusted profit expectations for its latest quarter, though shares of the e-commerce marketplace were headed lower in Wednesday’s after-hours action.

The e-commerce company reported a comprehensive loss of $1.30 billion, or $1.02 a share, whereas it logged a loss of $1.21 billion, or 95 cents a share, in the year-earlier period.

On an adjusted basis, Shopify
SHOP,
-7.44%
earned 14 cents a share, whereas analysts tracked by FactSet were anticipating 6 cents a share.

Don’t miss: Mastercard earnings bring latest signal of healthy spending

Revenue jumped to $1.69 billion from $1.30 billion a year prior, while the FactSet consensus was for $1.63 billion.

Gross merchandise volume, or the dollar value of orders facilitated through Shopify’s platform, came in at $53.5 billion. Analysts had been modeling $55.0 billion. The company also posted $31.7 billion in gross payments volume.

See also: Apple appears to be making rapid inroads in buy-now-pay-later

For the third quarter, Shopify anticipates a revenue growth percentage in the low-20s on a year-over-year basis. The company also expects free cash flow in the third quarter to exceed the first-half total.

Shopify generated $97 million in free cash flow during the second quarter, beating the $27 million FactSet consensus and bringing its first-half haul to $183 million. Analysts were expecting $96 million in free cash flow for the third quarter.

“We’re not just shipping products faster, but we are also expanding our global merchant base, all while improving our ability to generate greater free cash flow,” President Harley Finkelstein said in a release.

More from MarketWatch: PayPal’s stock falls as earnings beat, but a margin metric misses

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August 2, 2023
Amazon and Apple to headline Q2 earnings this week

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When Amazon.com Inc. and Apple Inc. report quarterly results on Thursday, we’ll get a look at two big companies, with big expectations, trying to do smaller things — or at least less exciting things, or things that might be more inconveniencing to customers — to stay bigger.

For Apple
AAPL,
+1.35%,
D.A. Davidson analyst Tom Forte said, the focus will be on the iPhone, as always, as well as demand abroad and a new VR headset, as its stock hovers near record highs and its market value holds above $3 trillion. And he said that Amazon
AMZN,
+3.09%,
meanwhile, could face questions about the impact of cost cuts on e-commerce growth, and what AI could do to boost slower growth in its cloud business.

The results from those companies, which are big enough to make or break a single quarter’s worth for the S&P 500 Index
SPX,
+0.99%,
will follow those from the other tech giants like Microsoft Corp.
MSFT,
+2.31%
and Facebook parent Meta Platforms Inc.
META,
+4.42%.
And they’ll arrive as Wall Street starts to get a tad more realistic about AI: Microsoft shares fell after management said the expansion of its AI capabilities would be “gradual” — and gradually more expensive.

D.A. Davidson analyst Tom Forte, in a research note this month, said Amazon, like other big tech companies, was taking more steps to control its costs. That might help margins, he said. But he said he’d be watching for any impact to e-commerce sales growth, following thousands of layoffs and pulling back on its expansion of Amazon Fresh.

Amazon began tacking on servicing fees onto some Amazon Fresh delivery orders this year. And Forte noted what he said were other tweaks to service: Charging for a home pickup of a defective smoke alarm that used to be free, and incentives to wait longer during Prime Day.

“In our view, Amazon is playing a ‘game of chicken’ and banking on other e-commerce companies not to offer a superior service, instead of its historical approach of working backwards with a customer-obsessed approach,” D.A. Davidson analyst Tom Forte said in a research note.

He added later: “We believe there is something to be said about the experience of having an Amazon-branded delivery vehicle show up at your house EVERY day. Having one show up once a week or twice is not the same.”

At Apple, Forte said in a separate note, the iPhone, whose sales were still solid, had turned into more of a consumer staple than a discretionary buy. He also said he’d be looking for more detail about the upcoming iPhone 15 — likely to be modestly fancier than previous iPhones — the recovery in China and growth in India. Apple last month also unveiled its Vision Pro VR headset — for $3,499. Forte said he had his doubts.

“We believe Apple will have to overcome a number of structural challenges to achieve mass adoption for its AR/VR headset,” he said.

This week in earnings

Apple and Amazon will report as more companies than normal report quarterly profit ahead of estimates, according to a FactSet report on Friday. For the week ahead, 170 S&P 500 companies report results, with four from the Dow, the repot said.

Results from Uber Technologies Inc.
UBER,
+3.28%
and DoorDash Inc.
DASH,
+4.20%
will offer an update on the gig economy and how far app-based deliveries can go, while results from Kraft Heinz Inc.
KHC,
-0.11%
will offer an update on food prices and how much they might ease from the highs seen in recent months.

With the “Barbie” movie lifting rival Mattel Inc.
MAT,
-2.40%,
results from Hasbro Inc
HAS,
-0.29%
during the week will offer a glance at the rest of the toy industry, where demand hasn’t exactly been great, and what entertainment options Hasbro has up its sleeve to keep apace with its archrival. Drug maker Pfizer Inc.
PFE,
-0.36%
reports, as does video-game maker Electronic Arts Inc.
EA,
+0.25%.
Starbucks Corp.
SBUX,
+0.47%
reports as well.

The call to put on your calendar

“Barbie,” the Hollywood strike and Warner Bros. Discovery: Mattel has said it wants to turn “Barbie” into a content franchise. Now we’ll hear what Warner Bros. Discovery Inc.
WBD,
+4.07%,
the media conglomerate that produced the film, thinks about the film’s results and its prospects, as studios increasingly pump out sequels or offshoots of well-known, established character universes like “Star Wars,” Marvel and DC. The company — which reports oversees Warner Bros. CNN, TNT and the streaming service Max — reports quarterly results on Thursday. But even as “Barbie” and “Oppenheimer” carry the parts of the entertainment industry that are still functioning through the Hollywood strike, Wall Street will likely be focused on contingency plans, and any sense of whether more viewers are turning to streaming with productions on pause.

The number to watch

Payments and crypto volumes: Results this week from trading app Robinhood Markets Inc.
HOOD,
+4.09%
and crypto exchange Coinbase Global Inc.
COIN,
+2.23%,
along with PayPal Holdings Inc.
PYPL,
+2.71%
and Block
SQ,
+3.42%,
will land at the intersection of rebounding markets and job-market concerns.

UBS analysts predicted solid growth and cost control for Block, and “steady” e-commerce trends for PayPal. But BofA analysts said PayPal’s search for a new chief executive, following the announcement of Dan Schulman’s retirement at the end of the year, would become more important, adding that “we think investors should rightfully expect the CEO search to conclude in the near-term.” While Bitcoin’s rebound helped Coinbase, the company and others in the industry face the prospect of tougher regulations. Robinhood and PayPal report on Wednesday. Coinbase and Block report on Thursday.

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July 30, 2023
Palantir Stock Spikes After Analyst Says to Buy ‘The Messi of AI’

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Palantir Technologies

shares were getting a major boost Friday after Wedbush technology analyst Dan Ives launched coverage of the AI software company with an Outperform rating, setting a target price of $25. Ives contends Palantir is well-positioned to take market share in both the commercial and government analytics software markets.

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July 28, 2023

Banc of California is expected to keep leading regional banks higher as PacWest deal ignites sector

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Banc of California Inc.’s proposed agreement to acquire PacWest Bancorp. helped send regional-bank stocks considerably higher on Wednesday. But even after a two-day increase of 12% for its shares, the acquiring bank remains the favorite name among analysts covering regional players in the U.S.

The merger agreement was announced after the market close on Tuesday, but the rumor mill had already sent Banc of California’s
BANC,
+0.62%
stock up by 11% that day. Then on Wednesday, shares of PacWest Bancorp
PACW,
+26.92%
shot up 27% to $9.76, which was above the estimated takeout value of $9.60 a share when the deal was announced. The merger deal, if approved by both banks’ shareholders, will also include a $400 million investment from Warburg Pincus LLC and Centerbridge Partners L.P.

A screen of regional banks by rating and stock-price target is below.

Deal coverage:

With PacWest closing above the initial per-share deal valuation, it is fair to wonder whether or not its shareholders will vote to approve the agreement. In a note to clients on Wednesday, Wedbush analyst David Chiaverini called Banc of California’s offer “fair, but not overwhelmingly attractive,” and wrote that PacWest was “a likely seller before the mini banking crisis occurred in March.”

While Chiaverini went on to predict the deal’s approval by PacWest’s shareholders, he added that he “wouldn’t be surprised if there were some dissent among a minority of shareholders [which could] possibly open the door to the potential emergence of a third-party bid.”

More broadly, Odeon Capital analyst Dick Bove wrote to clients on Wednesday that the merger deal, along with increasing involvement of private-equity firms in lending businesses, the expected enhancement of regulatory capital requirements for banks and other factors could lead to more consolidation among smaller banks.

He went on to write that we might be entering a period for the banking industry similar to the 1990s, “when rules were being changed and acquisitions were rampant,” which “created new investment opportunities.”

The SPDR S&P Regional Banking exchange-traded fund
KRE,
+4.74%
rose 5% on Wednesday but was still down 17% for 2023, while the SPDR S&P 500 ETF Trust
SPY,
+0.02%
was up 19%, both excluding dividends.

KRE holds 139 stocks, with 98 covered by at least five analysts working for brokerage firms polled by FactSet. Out of those 98 banks, 45 have majority “buy” ratings among the analysts. Among those 45, here are the 10 with the most upside potential over the next 12 months, implied by consensus price targets:

Bank	Ticker	City	Total assets ($mil)	July 26 price change	Share buy ratings	July 26 closing price	Consensus price target	Implied 12-month upside potential
Banc of California Inc.	BANC, +0.62%	Santa Ana, Calif.	$9,370	1%	71%	$14.71	$18.58	26%
Enterprise Financial Services Corp.	EFSC, +1.83%	Clayton, Mo.	$13,871	2%	80%	$41.75	$49.25	18%
First Merchants Corp.	FRME, +3.52%	Muncie, Ind.	$17,968	4%	100%	$32.38	$37.33	15%
Amerant Bancorp Inc. Class A	AMTB, +3.47%	Coral Gables, Fla.	$9,520	3%	60%	$20.26	$23.30	15%
Old Second Bancorp Inc.	OSBC, +3.39%	Aurora, Ill.	$5,884	3%	100%	$16.15	$18.50	15%
F.N.B. Corp.	FNB, +2.87%	Pittsburgh	$44,778	3%	75%	$12.91	$14.50	12%
Columbia Banking System Inc.	COLB, +3.95%	Tacoma, Wash.	$53,592	4%	55%	$22.63	$25.32	12%
Wintrust Financial Corp.	WTFC, +3.43%	Rosemont, Ill.	$54,286	3%	92%	$86.05	$95.33	11%
Synovus Financial Corp.	SNV, +6.01%	Columbus, Ga.	$60,656	6%	75%	$34.06	$37.73	11%
Home BancShares Inc.	HOMB, +4.56%	Conway, Ark.	$22,126	5%	57%	$24.09	$26.67	11%
Source: FactSet

Click on the tickers for more about each bank.

Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

Any stock screen can only be a starting point when considering whether or not to invest. If you see any stocks of interest here, you should do your own research to form your own opinion.

Don’t miss: How you can profit in the stock market from an incredible financial-services trend over the next 20 years

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July 26, 2023

ServiceNow Posts Strong Earnings and Adds New AI Tools. But the Stock Is Lower.
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https://www.barrons.com/articles/servicenow-earnings-stock-price-ef3bea69
Technology

Earnings Report

Updated July 26, 2023 5:00 pm ET / Original July 26, 2023 4:13 pm ET

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ServiceNow

posted better-than-expected results for its latest quarter and lifted its full-year outlook.
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July 26, 2023
Alphabet earnings push stock up 6%; CFO Ruth Porat to become president, chief investment officer

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Google parent Alphabet Inc.’s stock jumped 6% in after-hours trading Tuesday after the company beat estimates on the top and bottom line, and announced the transition of Chief Financial Officer Ruth Porat to president and chief investment officer in September.

Fueled by strong advertising sales, Alphabet
GOOGL,
+0.56%

GOOG,
+0.75%
racked up fiscal second-quarter net income of $18.4 billion, or $1.44 a share, compared with net income of $16 billion, or $1.21 a share, in the same quarter a year ago.

Total revenue was $74.6 billion, compared with $69.7 billion a year ago. Sales minus traffic-acquisition costs were $62.06 billion, vs. $57.5 billion last year.

Analysts surveyed by FactSet had expected on average net earnings of $1.34 a share on revenue of $72.85 billion and ex-TAC revenue of $60.25 billion.

“There’s exciting momentum across our products and the company, which drove strong results this quarter,” Alphabet Chief Executive Sundar Pichai said in a statement. “Our continued leadership in AI and our excellence in engineering
and innovation are driving the next evolution of Search, and improving all our services.”

During a conference call Tuesday afternoon, he highlighted the intertwining of advertising and Alphabet’s strides in generative AI. He added the company continues to consolidate and align operations to streamline spending.

Shares of Alphabet have advanced 39% so far this year largely on the strength of generative AI and its potential. The broader S&P 500 index
SPX,
+0.28%
is up 19%. Alphabet’s stock inched up 0.6% to $122.21 in the regular session Tuesday.

Google’s total advertising sales improved to $58.14 billion from $56.3 billion a year ago, and edged analysts’ average expectations of $57.45 billion. Google Cloud hauled in $8 billion, compared with $6.3 billion last year. YouTube ad sales rebounded to $7.7 billion from $7.34 billion a year ago.

“The proverbial floodgates aren’t opening yet but clients are starting to see pockets of opportunity and are willing to invest for a direct return,” Aaron Levy, vice president of paid search at Tinuiti, said in an email.

Porat, who has played an essential role in Google’s advertising success since she became CFO in 2015, will start her new role on Sept. 1. She will be responsible for Alphabet’s investments in its Other Bets portfolio, and the company’s investments in countries and communities around the world. Porat will continue to report to Pichai.

“We see technology can make so much of a difference in people’s lives… and in economic growth globally,” Porat said during the conference call late Tuesday.

The monetization of AI continues to be an obsession of investors and Wall Street. Microsoft Corp.’s
MSFT,
+1.70%
AI version, Bing, hit the market first, but Google’s competing entry, Bard, is making headway, according to analysts. Alphabet is ramping up AI initiatives to improve operational efficiency and productivity.

When asked on the call about AI monetization, Pichai said the technology expands the company’s total addressable market, brings in potential new customers, deepens the versatility of its product portfolio, and differentiates core products such as cybersecurity.

AI’s importance was underscored by a Wall Street Journal report on Tuesday that Google co-founder Sergey Brin has been spotted at the company’s Mountain View, Calif., headquarters in recent weeks working with AI researchers on a large-scale project. Brin has been largely out of sight after stepping down from an executive role at parent company Alphabet in 2019.

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July 25, 2023
Microsoft earnings top estimates, but stock falls as execs detail AI’s costs

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Microsoft Corp. easily topped profit and revenue expectations for its latest quarter, though its shares were moving more than 3% lower in extended trading Tuesday after the company discussed the year ahead.

The technology giant has won favor on Wall Street for its positioning in the artificial-intelligence revolution, though Chief Financial Officer Amy Hood said on Tuesday’s earnings call that “even with strong demand and a leadership position,” Microsoft’s
MSFT,
+1.70%
“growth from our AI services will be gradual.” Microsoft’s AI for its Azure cloud-computing business needs to ramp, and the company is working toward the general availability of its Copilot productivity product.

Microsoft’s AI revenue impacts will thus be weighted toward the second half of the new fiscal year that just began, she continued. Meanwhile, she expects that Microsoft’s capital expenditures will rise sequentially each quarter “as we scale to meet demand signals.”

Hood’s commentary came as Microsoft posted fiscal fourth-quarter results Tuesday afternoon that showed a 15% jump in revenue for the company’s cloud-computing segment, which it calls Intelligent Cloud. Revenue for the segment came in at $24.0 billion, while analysts had been anticipating $23.8 billion. The growth rate was 17% on a currency-neutral basis.

The company said revenue for Azure and other cloud services was up 26%, or 27% in constant currency. Microsoft’s forecast had been for 26% to 27% in constant-currency Azure sales growth, while the company posted 31% constant-currency growth on the metric in the March period. The FactSet consensus was for 27% growth in constant currency.

“While we believe the Street was hoping for Azure growth more in the ~28% range, we believe the consumption part of the business held up well,” Evercore ISI analyst Kirk Materne said in a note to clients.

For the September quarter, Microsoft anticipates 25% to 26% in constant-currency Azure growth.

The cloud migration is still in the “early innings,” Chief Executive Satya Nadella said on the call, while also highlighting a “new world of AI driving a set of new workloads.”

“We think of that, again, being pretty expansive from a TAM [total addressable market] opportunity and we’ll play it out,” he continued, though the company is also up against the “law of large numbers” given the massive scale of its cloud business.

The company generated fiscal fourth-quarter net income of $20.1 billion, or $2.69 a share, compared with $16.7 billion, or $2.23 a share, in the year-earlier period. Analysts tracked by FactSet were modeling $2.55 a share.

Overall revenue for Microsoft climbed to $56.2 billion from $51.9 billion, whereas analysts had been expecting $55.5 billion.

See also: Microsoft bulls are excited as company reveals pricing for AI offering

Microsoft logged $18.3 billion in revenue for its productivity and business processes unit, up 10% from a year before, or up 12% in constant currency. That part of the business includes LinkedIn and both commercial and consumer versions of Office. Analysts had been looking for $18.1 billion.

Revenue for the More Personal Computing segment, which includes Windows and Xbox content and services, dropped 4% to $13.9 billion and was off 3% on a constant-currency basis. The FactSet consensus was for $13.6 billion.

Nadella, meanwhile, expressed optimism about the eventual opportunities brought upon by Microsoft’s Copilot offerings.

“I do think people are going to look at how can they complement their [operating-expense] spend with essentially these Copilots in order to drive more efficiency and, quite frankly, even reduce the burden and drudgery of work on their OpEx and their people and so on,” he said.

Evercore’s Materne called the overall results “solid” amid “a lot of macro headwinds.” Microsoft’s investment story “gets stronger in [the second half of the calendar year] as some optical headwinds reverse and [comparisons] soften, and Microsoft’s position in the enterprise market continues to get stronger as customers look to consolidate spending,” he wrote.

Read: Amazon finally is nearing a bottom on this key measure, analyst says

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July 25, 2023
F5, Logitech, Cadence Design, GE, GM, Microsoft, Alphabet, and More Stock Market Movers
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Updated July 25, 2023 5:37 am ET / Original July 25, 2023 4:55 am ET

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July 25, 2023
AMC, Chevron, Tesla, Domino’s, Microsoft, and More Stock Market Movers
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U.S

Europe

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FX

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Futures

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Updated July 24, 2023 5:23 am ET / Original July 24, 2023 4:47 am ET

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These Stocks Are Moving the Most Today: AMC, Chevron, Tesla, Domino’s, Microsoft, and More

Stock futures were up slightly Monday ahead of a week filled with interest-rate decisions from the Federal Reserve and European Central Bank, and earnings from more than 150 companies in the S&P 500, including tech giants Microsoft, Alphabet, Meta Platforms, and Amazon.

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July 24, 2023
With Microsoft, Meta and Alphabet earnings hanging on AI, more investors are asking: ‘How are you going to pay for that?’

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Shares of big tech companies have coasted through this year on AI euphoria, but as Microsoft Corp., Alphabet Inc. and Meta Platforms Inc. prepare to report results this week, some investors are starting to ask how much those AI advancements might actually cost.

Those questions have surfaced after several months during simply saying “AI” on earnings calls appeared to be enough for investors. If the economy sours though — as some expect in the second half of this year or next year — big tech’s AI ambitions could go with it.

“Given the exorbitant costs associated with the development, hosting and serving of AI products, many investors are concerned about the potential for [fiscal 2024] commentary regarding a material increase,” Jefferies analyst Brent Thill wrote, according to a MarketWatch earnings preview for Microsoft’s
MSFT,
-0.89%
results.

Microsoft and Alphabet Inc.
GOOGL,
+0.69%

GOOG,
+0.65%,
which both report on Tuesday, have been in heated competition in the world of online search and digital advertisements, as Microsoft leans more on its massive investments in research lab OpenAI to muscle up its own search capabilities. But a Deutsche Bank analyst said that so far, Google appears to have the upper hand in that battle.

Still, for Microsoft, after a broader pullback in IT spending earlier this year, analysts have found more to like about its cloud-computing business — namely market-share gains, generally-sturdy demand, and whatever ways AI can fit into the equation. Wolfe Research analyst Alex Zukin, in a recent note, said he believed “the focus will turn from what is good enough, to how good can it be,” as Microsoft moves deeper into AI.

“How good can it be?” might also be a question for Meta
META,
-2.73%,
which reports second-quarter results on Wednesday.

Shares of the social-media company have more than doubled in value so far this year. JMP analyst Andrew Boone, in a recent note, cited likely improvements in Meta’s digital ad segment, better engagement, and a broader advertising backdrop that “appears to be stable” after a slowdown in spending, Still, there are signs that the initial user attraction to Threads, Meta’s answer to Twitter, has fizzled.

This week in earnings

For the week ahead, 166 companies in the S&P 500 index report results, including 12 from the Dow, according to FactSet. Among them are Domino’s Pizza Inc.
DPZ,
-0.62%,
which now plans to deliver pizza via Uber Eats after years of chafing at third-party delivery apps. Industrials General Electric Co.
GE,
-0.82%
and 3M Co.
MMM,
+0.04%
also report, after 3M agreed to pay $10.3 billion to settle accusations it was responsible for so-called “forever chemicals” in drinking water.

Quick-service restaurant chains Chipotle Mexican Grill Inc.
CMG,
+0.20%
and McDonald’s Corp.
MCD,
-0.51%
also report, with BofA analysts expecting an “almost normal” quarter for the industry, after spending at chain restaurants grew last month and costs for some ingredients started to ease following two years of supply disruptions. Auto makers General Motors Co.
GM,
-1.81%
and Ford Motor Co.
F,
-0.71%
also report, and while parts shortages that have constrained vehicle production have shown signs of fading, so has electric-vehicle “euphoria.”

The calls to put on your calendar

Visa, Mastercard: Earlier this month executives from the big banks said U.S. consumers are generally doing OK despite still-rampant inflation, although perhaps less OK than in prior months. This week credit-card giants Visa Inc. and Mastercard Inc. report results on Tuesday and Thursday, respectively. The profit, sales and credit-card volume figures from Visa
V,
-0.15%
and Mastercard
MA,
-0.14%
will offer more specifics on consumer spending, as vacations and concerts compete with more expensive and more pressing needs, like groceries and other bills.

Shares of Visa and Mastercard are up so far this year, but some analysts said there could be more room investors to step in. SVB MoffettNathanson analyst Lisa Ellis recently said shares of both companies were hovering at “unusu a lly attractive” levels.

The number to watch

Mattel outlook, and anything ‘Barbie’-related: The “Barbie” movie hit theaters nationwide on Friday. And after an epic marketing campaign, Mattel Inc.’s investors, banking on the film to drive a rebound for the toy maker during the second half of this year, will be zeroed in on the box-office results following the film’s debut on Friday.

Expectations for the film are huge. And when Mattel
MAT,
-0.42%
reports second-quarter results on Wednesday, executives could offer the first answers to some big questions: Has the film helped revive toy sales? Sales for anything else? Will the “Barbenheimer” effect help or hurt financials?

The film — directed by Greta Gerwig, written Gerwig and Noah Baumbach, and starring Margot Robbie and Ryan Gosling — brings together two writers with indie bona fides and two actors with mainstream starpower. Reviews so far have been favorable, and Barbie is already Mattel’s most profitable franchise. But the movie isn’t directly geared toward children, movie theaters have struggled to get back on track after pandemic lockdowns, and toy demand through this year has been weak after ballooning during the pandemic. And some analysts don’t expect “Barbie” to do much for Mattel’s stock.

Emily Bary and Jon Swartz contributed reporting to this story.

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July 23, 2023

Electrolux Starts Preparations For Potential Divestment of Zanussi and Other Non-Core Brands During Coming Yrs

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By Dominic Chopping

STOCKHOLM–Electrolux on Thursday swung to an unexpected second-quarter net loss and said it is considering selling its Zanussi brand and other non-core assets during the coming years that together could raise around 10 billion Swedish kronor ($973.3 million).

The Swedish home-appliance manufacturer posted a second-quarter net loss of SEK648 million from a profit of SEK257 million as earnings were weighed by SEK643 million provision, significantly lower volumes due to weaker market demand, currency headwinds, labor cost and energy inflation.

A FactSet analyst poll had expected a net profit of SEK350 million.

Sales fell 3.2% to SEK32.65 billion, versus the SEK34.05 billion expected in a company-compiled consensus.

The weak demand environment, with lower consumer purchasing power resulting in more consumers shifting to lower price points, continued in the second quarter, it said.

Although price increases contributed somewhat positively in the quarter, earnings promotions also increased significantly and Electrolux now expects the net price effect to turn negative from the third quarter.

“In the challenging times we are now experiencing, it is vital to continue with strategic portfolio management,” Chief Executive Jonas Samuelson said.

“Further structural simplification and complexity reduction are thus being evaluated.”

Demand in 2023 is now expected to be negative in all regions.

Write to Dominic Chopping at dominic.chopping@wsj.com

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July 20, 2023

Cathie Wood’s ARK funds dump $26 million more in Coinbase stock, shed $13 million more of Tesla shares

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Funds associated with Cathie Wood’s ARK Investment continued to cull shares of Coinbase Global Inc. and Tesla Inc. on Monday, according to recent trade disclosures.

The ARK Fintech Innovation ETF
ARKF,
+1.58%
dumped 76,788 Coinbase shares
COIN,
+0.23%
on the day, while the ARK Innovation ETF
ARKK,
+2.29%
sold 127,266 and the ARK Next Generation Internet ETF
ARKW,
+2.23%
sold 44,784 shares.

Those were worth $26.3 million based on Coinbase’s Monday closing price of $105.55, and the sales follow ARK’s move to dump about $50 million in Coinbase’s stock Friday.

Coinbase represents 0.78% of the Fintech Innovation ETF, along with 0.15% of the Innovation ETF and 0.30% of the Next Generation Internet ETF. ARK disclosed the transactions and weightings in the daily trade notifications it posts to its website.

Read: Coinbase’s spectacular stock surge after Ripple ruling sparks fierce debate

Meanwhile, the ARK Innovation ETF shed 38,329 Tesla shares
TSLA,
+3.20%
on Monday, while the ARK Next Generation Internet ETF sold 6,855. Those shares were worth $13.1 million based on Tesla’s Monday closing level of $290.38. Tesla represents about 0.12% of both funds as they continue to unload shares.

Don’t miss: Tesla is looking at its best sales quarter ever

ARK scooped up 455 shares of Meta Platforms Inc.
META,
+0.57%
within its Next Generation Internet ETF and bought up 3,729 shares within the ARK Innovation ETF. That amounted to $1.3 million worth of stock based on Meta’s $310.62 Monday close.

Two ARK funds bought a combined $790 million in Robinhood Markets Inc.’s stock
HOOD,
+0.89%,
with the fintech fund scooping up 25,641 shares and the Next Generation Internet ETF buying 37,630 shares. ARK added 4,608 shares of SoFi Technologies Inc.
SOFI,
+4.41%
to the fintech fund, worth $43,683 based on Monday’s close.

See also: SoFi’s stock catches another downgrade as analyst says it ‘needs to be valued more like a bank’

ARK was also active in shares of Twilio Inc.
TWLO,
-0.63%,
buying 15,702 within the Fintech Innovation ETF, 133,499 within the Innovation ETF and 22,748 within the Next Generation Internet ETF. That amounted to $11.4 million in Twilio’s stock based on Monday’s $66.47 closing price.

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July 17, 2023
Microsoft Stock Is a Buy, American Tower Can Climb, and More Analyst Reports

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These reports, excerpted and edited by Barron’s, were issued recently by investment and research firms. The reports are a sampling of analysts’ thinking; they should not be considered the views or recommendations of Barron’s. Some of the reports’ issuers have provided, or hope to provide, investment-banking or other services to the companies being analyzed.

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July 14, 2023
FTC files appeal, again seeks to block Microsoft-Activision deal

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The Federal Trade Commission on Thursday asked an appeals court to temporarily block Microsoft Corp.’s $69 billion acquisition of Activision Blizzard Inc. while it challenges a ruling earlier this week green-lighting the deal.

The FTC on Thursday asked U.S. District Judge Jacqueline Scott Corley to postpone her ruling — which she promptly denied — and also appealed to the Ninth U.S. Circuit Court of Appeals in San Francisco to pause the acquisition “to preserve the status quo” while the case is reviewed, claiming it is likely to succeed in its appeal.

According to the filing, the FTC claims the judge applied the wrong legal standard to its request for a preliminary injunction, and erred in a number of other matters.

The deal is set to close in the coming days, and letting it happen will “irreparably harm the public interest and the FTC,” regulators said.

Also see: GOP blasts FTC Chair Khan as a ‘bully’ after agency’s loss in Microsoft case

In a response filed with the court, Microsoft said the FTC “failed to carry its burden on independent, fact-based grounds” and “dragged its heels” before appealing.

“The court has already found that it would be inequitable” to order an injunction that could lead to “the potential scuttling of the merger,” Microsoft said, in asking for the FTC’s request to be denied.

The FTC has claimed the tie-up of a major videogame platform — Microsoft’s
MSFT,
+1.62%
Xbox — with a major videogame publisher — Activision
ATVI,
-0.51%
makes the wildly popular “Call of Duty,” among other titles — would be harmful to the videogame industry and consumers.

Microsoft has pledged to keep “Call of Duty” available to Sony’s
SONY,
+2.82%
PlayStation console for 10 years, and will make it available for Nintendo’s
7974,
-0.36%
Switch and some cloud-gaming platforms.

In her ruling clearing the deal Tuesday, Corley said the FTC did not show “this particular vertical merger in this specific industry may substantially lessen competition.”

Bloomberg News reported late Thursday that Microsoft and Activision are considering giving up some control of their cloud-gaming business in the U.K. to win approval of British regulators, who — if the U.S. appeals court does not act — are the final hurdle to the deal closing on time.

FTC Chair Lina Khan testified on Capitol Hill on Thursday, where Republican lawmakers assailed her actions and sharply criticized her agency’s court losses in trying to block the Microsoft-Activision deal and Meta’s
META,
+1.32%
acquisition of a virtual-reality gaming company earlier this year.

Read more: After Microsoft defeat, ‘toothless’ FTC needs to pick better battles if it wants to rein in Big Tech

Also: FTC’s probe of OpenAI marks key moment in Khan’s push to rein in Big Tech

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July 13, 2023

Tag: Computers/Consumer Electronics

When and where is the debate?

Besides Pence, who has qualified?

What are the requirements for the Milwaukee debate?

What has Trump said about attending the debate?

This week in earnings

The call to put on your calendar

The number to watch

These Stocks Are Moving the Most Today: AMC, Chevron, Tesla, Domino’s, Microsoft, and More

This week in earnings

The calls to put on your calendar

The number to watch