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Nvidia Might Have Some Bad News on Gaming. Buy the Stock Anyway?
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CNN
—
Chris Pantons is what you’d call a Google Pixel super fan. The Knoxville, Tennessee native loves the software, the camera, the virtual assistant, all of it. He even credits the phone’s car crash detection tool with saving his life a few years ago when he was in an accident.
“I’ve owned practically every Pixel device,” said Pantons, 33, who has posted hundreds of YouTube videos about Pixel phones and other tech products. “I’ve influenced so much of my family to switch to Pixel – my brother and sister-in-law, mom and wife … and I had a coworker switch, too.”
But this is the first year he won’t be upgrading to Pixel’s latest offering: the Pixel Fold, a foldable smartphone that starts at $1,799. “I’d love to own it,” he told CNN. “I don’t have the finances to do so. … [That] price for a first generation device is astronomical.”
Earlier this month, Google became the latest tech company to unveil a foldable smartphone, with the promise of giving customers all the features they’ve come to expect in a phone, paired with a tablet-sized display. But Pantons wasn’t the only one who felt sticker shock.
“My first car was $1800,” one user wrote on Twitter. “Google [lost] their minds.” Another user said they’ve been saving up, knowing the price for a Pixel foldable phone would inevitably be high once announced.
“The fact you can buy a new Pixel, Pixel tablet and a Pixel Watch for less than the Fold and have various devices for use cases is a better value,” said Pantons.
The pricing problem isn’t unique to Google. When Samsung launched the Galaxy Z Fold in 2020, it cost $1,999. It has come down in price somewhat, but the latest version of the Z Fold still starts at $1,799 – the same as the Pixel Fold. Even foldable models from budget brands retail for well over $1,000 in markets abroad.
By comparison, the flagship iPhone starts at $799, less than half the price of the Pixel Fold. And classic 90s-style pre-paid flip phones, which are suddenly trendy again, can cost as little as $20.
The higher price point is one of the factors limiting the size of the foldable market. Samsung currently dominates the category, followed by others including Motorola, Lenovo, Oppo, and Huawei. According to ABI Research, foldable and flexible displays made up about 0.7% of the smartphone market in 2021, and in 2022 expected to fall just shy of 2%.
Lowering the price could help boost traction, but manufacturers may struggle to do that anytime soon.
The flexible screen found on foldable phones is one of the biggest reasons why they cost so much.
Flexible displays require more engineering and are more expensive to manufacture than traditional displays. And the Google Pixel Fold has two: a 5.8-inch cover display and a 7.6-inch inner display.
Other components unique to foldables also drive up the cost. The Pixel Fold, for example, moves on a custom-built 180-degree hinge. The mechanism is moved out entirely from under the display to improve its dust resistance and decrease the device’s overall thickness, according to the company. This also requires complex engineering and costly manufacturing.
“Expense is mainly to do with the high costs of components, notably the folding displays and hinge technology, which in many cases is a proprietary hinge design,” said David McQueen, research director at ABI Research. “So until volume grows enough that vendors can get scale, prices won’t be falling any time soon.”
Foldable smartphones are still in their infancy. As a result, much of the research and development, and the costs associated with it, still lie ahead for manufacturers as they fine tune their products.
“Companies often try to recoup their investment with a high price tag,” said Nabila Popal, research director at market research firm IDC.
Foldable phones also remain a niche product for now, and manufacturers are targeting the price for the people willing to buy them early to help offset costs.
The future for foldables remains uncertain. Most apps are still not optimized for foldable devices; Google’s chief rival, Apple, has yet to embrace the option; and splurging for a first-generation device with a lot of unknowns is a risky bet for anyone.
Foldable phones are also notoriously fragile. Early versions of the Samsung Galaxy Z Fold, for example, had issues with the screen. Repairs for foldable smartphones can be costly too.
But Google’s decision to embrace the option may help persuade more consumers to take a chance.
Sean Milfort, a PhD student at Northcentral University, said he pre-ordered the Pixel Fold because he always wanted a foldable smartphone and didn’t want to leave the Pixel brand.
“I’m a big fan of the Pixel line and have loved the idea of a foldable,” he said. “The fact that it is coming from Google – because they make Android – gives me hope that they will be really investing in that larger form factor device with Android.”
But holdouts like Pantons may wait on the chance it could come down in price.
“If a trade-in deal later on becomes available or it goes on sale then maybe then [I’ll buy one],” he said.
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U.K. telecoms provider BT Group set plans to cut up to 55,000 jobs by the end of the decade as it completes the rollout of high-speed broadband.
BT Group
BT.A,
says it is aiming to reduce its total labor force, which includes contractors, from 130,000 down to between 75,000 to 90,000 by fiscal 2028 to fiscal 2030.
“It is not surprising that in an inflationary and high-interest rates environment where costs are higher and increased expenses for servicing debt, telecommunication companies are employing technology to decrease costs wherever possible,” said Albie Amankona, analyst at Third Bridge.
U.K.-based mobile operator Vodafone Group
VOD,
on Tuesday said it would cut 11,000 jobs over three years.
BT said revenue and adjusted EBITDA for its fiscal year was in line with its outlook but normalized free cash flow of £1.33 billion was at the lower end of guidance due to spending on building the Openreach fiber network.
For fiscal 2024, it’s targeting revenue and EBITDA growth on a pro forma basis; and normalized free cash flow between £1 billion and £1.2 billion. BT shares dropped 8% in early trade.
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Things move quickly in the world of artificial intelligence. It is easy to sit back and complain about developments that could be disruptive, but sometimes investors are best served by putting emotions aside and observing new developments and how they affect markets. Could AI developments and related trends make you a lot of money?
Below is a new screen showing a group of AI-oriented companies expected to increase their sales most rapidly through 2025, based on consensus estimates among analysts polled by FactSet. Then we show expected revenue growth rates for the largest AI-oriented companies in the screen.
Over the long haul, many businesses might perform more efficiently by employing AI. Maybe this technology can create an economic revolution similar to the one that moved the majority of the working population away from agricultural labor during the 19th and 20th centuries.
Back in February, we screened 96 stocks held by five exchange-traded funds focused on AI and related industries and listed the 20 that analysts thought would rise the most over the following 12 months.
Three months is a long time for AI, and the shakeout hasn’t even started.
Read: Congress and tech seem open to regulating AI efforts, but that doesn’t mean it will happen
There is no way to predict how politicians will react to perceived or real threats of AI and machine learning. And the largest U.S. tech players are doing everything they can to employ the new technology and remain dominant. But that doesn’t mean they will grow more quickly than smaller AI-focused players.
Once again we will begin a screen with these five ETFs:
Altogether and removing duplicates, the five ETFs hold 270 stocks of companies in 23 countries. We first narrowed the list to 197 covered by at least nine analysts and for which consensus sales estimates are available through calendar 2025. We used calendar-year estimates because some companies have fiscal years that don’t match the calendar.
Here are the 20 screened AI-related companies expected by analysts to have the highest compound annual growth rates (CAGR) for sales from 2023 through 2025. Sales estimates are in millions of U.S. dollars. The list also shows which of the above five ETFs holds each stocks.
| Company | Ticker | Estimated sales – 2023 ($mil) | Estimated sales – 2024 ($mil) | Estimated sales – 2025 ($mil) | Two-year estimated sales CAGR through 2025 | Held by |
| BioXcel Therapeutics Inc. |
BTAI, |
$5 | $39 | $121 | 411.5% | WTAI |
| Luminar Technologies Inc. Class A |
LAZR, |
$86 | $266 | $588 | 161.0% | ROBT, WTAI |
| BlackBerry Ltd. |
BB, |
$685 | $769 | $1,925 | 67.6% | ROBT |
| Credo Technology Group Holding Ltd. |
CRDO, |
$183 | $259 | $363 | 40.9% | IRBO |
| SentinelOne Inc. Class A |
S, |
$619 | $881 | $1,176 | 37.9% | WTAI |
| Wolfspeed Inc. |
WOLF, |
$982 | $1,323 | $1,860 | 37.6% | WTAI |
| SK hynix Inc. |
000660, |
$18,319 | $27,899 | $34,542 | 37.3% | WTAI |
| Mobileye Global Inc. Class A |
MBLY, |
$2,109 | $2,782 | $3,920 | 36.3% | ROBT, WTAI |
| Snowflake Inc. Class A |
SNOW, |
$2,811 | $3,863 | $5,139 | 35.2% | IRBO, THNQ, WTAI |
| Lemonade Inc. |
LMND, |
$395 | $471 | $712 | 34.2% | THNQ, WTAI |
| Nio Inc. ADR Class A |
NIO, |
$11,874 | $16,733 | $21,304 | 33.9% | ROBT |
| Stem Inc. |
STEM, |
$607 | $833 | $1,055 | 31.8% | WTAI |
| Upstart Holdings Inc. |
UPST, |
$547 | $768 | $938 | 31.0% | BOTZ, WTAI |
| Cloudflare Inc. Class A |
NET, |
$1,284 | $1,669 | $2,194 | 30.7% | THNQ |
| Samsara Inc. Class A |
IOT, |
$830 | $1,062 | $1,364 | 28.2% | THNQ |
| Ambarella Inc. |
AMBA, |
$287 | $355 | $472 | 28.2% | IRBO, ROBT, THNQ, WTAI |
| iflytek Co. Ltd. Class A |
002230, |
$3,561 | $4,582 | $5,851 | 28.2% | THNQ |
| Tesla Inc. |
TSLA, |
$99,558 | $128,412 | $161,061 | 27.2% | ROBT, THNQ, WTAI |
| CrowdStrike Holdings Inc. Class A |
CRWD, |
$2,935 | $3,793 | $4,739 | 27.1% | THNQ, WTAI |
| PB Fintech Ltd. |
543390, |
$358 | $462 | $573 | 26.5% | IRBO |
| Source: FactSet | ||||||
Click the tickers for more about each company or ETF.
Click here for Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote pages.
We have screened for expected revenue growth, rather than for earnings or cash flow, because in a newer tech-oriented business area, investors are most likely to consider the top line as companies sacrifice profits to build market share.
It is important to do your own research if you consider purchasing any individual stock, to form your own opinion about a company’s ability to remain competitive over the long term. Starting from the top of the list, BioXcel Therapeutics Inc.
BTAI,
is expected to show exponential sales growth, but that is from a low expected baseline this year.
What about the largest AI-related companies held by these ETFs?
Here are the largest 20 companies in the screen by market capitalization, ranked by expected sales CAGR from 2022 through 2025. Once again the sales estimates are in millions of U.S. dollars, but the market caps are in billions.
| Company | Ticker | Estimated sales – 2023 ($mil) | Estimated sales – 2024 ($mil) | Estimated sales – 2025 $mil) | Two-year estimated sales CAGR through 2025 | Market Cap ($bil) | Held by |
| Tesla Inc. |
TSLA, |
$99,558 | $128,412 | $161,061 | 27.2% | $528 | ROBT, THNQ, WTAI |
| Nvidia Corp. |
NVDA, |
$29,839 | $36,877 | $46,154 | 24.4% | $722 | BOTZ, IRBO, ROBT, THNQ, WTAI |
| Taiwan Semiconductor Manufacturing Co. Ltd. ADR |
TSM, |
$71,434 | $86,284 | $101,112 | 19.0% | $445 | ROBT, WTAI |
| Advanced Micro Devices Inc. |
AMD, |
$22,976 | $26,823 | $30,359 | 15.0% | $163 | IRBO, ROBT, THNQ, WTAI |
| ASML Holding NV ADR |
ASML, |
$28,974 | $32,374 | $37,796 | 14.2% | $263 | THNQ, WTAI |
| Microsoft Corp. |
MSFT, |
$223,438 | $251,028 | $282,397 | 12.4% | $2,318 | IRBO, ROBT, THNQ, WTAI |
| Samsung Electronics Co. Ltd. |
005930, |
$200,595 | $227,286 | $252,129 | 12.1% | $292 | IRBO, WTAI |
| Amazon.com Inc. |
AMZN, |
$559,438 | $626,549 | $702,395 | 12.1% | $1,164 | IRBO, ROBT, THNQ, WTAI |
| Adobe Inc. |
ADBE, |
$19,470 | $21,784 | $24,276 | 11.7% | $158 | IRBO, THNQ |
| Netflix Inc. |
NFLX, |
$33,915 | $38,067 | $42,275 | 11.6% | $148 | IRBO, THNQ |
| Tencent Holdings Ltd. |
700, |
$88,727 | $99,212 | $110,556 | 11.6% | $422 | IRBO, ROBT |
| Salesforce Inc. |
CRM, |
$34,392 | $38,273 | $42,786 | 11.5% | $205 | IRBO, THNQ |
| Alphabet Inc. Class A |
GOOGL, |
$299,810 | $333,077 | $369,195 | 11.0% | $710 | IRBO, ROBT, THNQ, WTAI |
| Intel Corp. |
INTC, |
$51,060 | $57,799 | $62,675 | 10.8% | $122 | IRBO, ROBT |
| Meta Platforms Inc. Class A |
META, |
$125,901 | $139,545 | $154,259 | 10.7% | $528 | IRBO, WTAI |
| Alibaba Group Holding Ltd. ADR |
BABA, |
$134,140 | $148,206 | $162,199 | 10.0% | $235 | ROBT, THNQ |
| Texas Instruments Inc. |
TXN, |
$17,941 | $19,433 | $20,799 | 7.7% | $148 | IRBO |
| Apple Inc. |
AAPL, |
$390,845 | $416,761 | $445,956 | 6.8% | $2,706 | IRBO, WTAI |
| Siemens Aktiengesellschaft |
SIE, |
$84,681 | $89,145 | $93,925 | 5.3% | $130 | ROBT |
| Johnson & Johnson |
JNJ, |
$98,761 | $100,990 | $103,870 | 2.6% | $414 | ROBT |
| Source: FactSet | |||||||
Tech-stock picks that are small and focused: This fund invests in unsung innovators. Here are 2 top choices.
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When investors think of technology stocks, they might automatically gravitate toward “the next big thing,” or to the giant companies that dominate the S&P 500
SPX,
But Robert Stimson, chief investment officer of Oak Associates Funds, makes a case for diversification through exposure to smaller innovators which he believes are “overlooked in this environment.”
The River Oak Discovery Fund
RIVSX,
invests in tech-oriented companies with market capitalizations of $5 billion or less, with an average of about $2 billion. It has a five-star rating, the highest, from Morningstar, despite having what the investment information firm considers “above average” annual expenses of 1.19% of assets under management. The fund is ranked in the 6th percentile among 546 funds in Morningstar’s “Small Blend” category for five-year performance and in the 13th percentile among 374 funds for 10-year performance. The performance comparisons are net of expenses.
The Black Oak Emerging Technologies Fund
BOGSX,
has more of a midcap focus, with some small-cap stocks and follows a similar strategy to that of RIVSX. But with no restriction on the size of companies this fund invests in, “we don’t have to sell stocks,” Stimpson said. So long-term holdings of this fund include Apple Inc.
AAPL,
and Salesforce.com Inc.
CRM,
This fund is rated three stars within Morningstar’s “Technology” category and has a lower expense ratio of 1.03%.
Both funds are concentrated. The River Oak Discovery Fund held 34 stocks and the Black Oak Emerging Technologies Fund held 35 stocks as of March 31. Lists of both funds’ largest holdings are below.
During an Interview, Stimpson, who co-manages both funds, said that when investing in the small-cap technology space, he and colleagues identify companies that are “focused on niches.
“I want a company that knows who they are, what they do and do it well, rather than a small company trying to growing into the next Microsoft, Google or Salesforce,” he said.
More about giant companies dominating stock indexes: This twist on a traditional S&P 500 stock fund can lower your risk and still beat the market overall
Stimpson said Oak Associates pays close attention to what corporate management teams say during earnings calls and in presentations, preferring comments related to improving sales and operations with a market niche, rather than expressions of grand visions for exponential growth.
That type of narrow focus can support higher valuations over time, Stimpson said. “They have better execution, a better ability to fend-off competition and they are quality acquisition candidates.”
“ “I caution everyone that until there is revenue, earnings and a product, the hype can be more dangerous than an opportunity.” ”
All of those factors can be important to investors, considering how easily tech giants such as Microsoft Corp.
MSFT,
or Google holding company Alphabet Inc.
GOOGL,
GOOG,
can begin to compete with smaller innovative companies because they can afford to make such large investments, he said.
Simpson went further, saying that when running screens for “quality” metrics, such as improving free cash flow yields, the Oak Associates team also looks for “shareholder friendly practices.” For example, a company may be repurchasing shares. But are the buybacks lowering the share count significantly (which boosts earnings per share) or are they merely mitigating the dilution caused by the shoveling of new shares to executives as part of their compensation?
Finally, Simpson cautioned investors not to get caught up in tech-focused hype.
“When I talk to our clients, I get questions about AI and ChatGPT and how to play it. People get focused on a new great tech innovation,” he said. “You can replace ChatGPT with bitcoin, metaverse or 3-D printing.”
“I caution everyone that until there is revenue, earnings and a product, the hype can be more dangerous than an opportunity.”
These companies are held by theRiver Oak Discovery Fund and the Black Oak Emerging Technologies Fund.
Cirrus Logic Inc.
CRUS,
is the largest holding of the River Oak Discovery Fund. Stimpson calls the company “a derivative play on the success of Apple.”
“They are focused on the chips that go into mobile and [vehicles],” as well as the needs of their customers, including Apple, “rather than problem areas of the chip sector, such as memory or PCs. They are not talking about chips for AI, for example,” Stimpson said.
Cirrus focuses on systems and related software used in audio systems..
Kulicke & Soffa Industries Inc.
KLIC,
makes equipment, tools and related software used by a variety of manufacturers of computer chips and integrated electronic devices.
Stimpson likes the company as a long-term play on the worldwide disruption in semiconductor manufacturing and supply, in the wake of the Covid-19 pandemic. “All chip companies learned that any supply disruption in Southeast Asia is a problem. Over time, the opportunities for semiconductor equipment makers are very good. There will be more plants in more locations, so more equipment,” he said.
He said KLICK was in a “protected” position, with returns on equity of about 20% and free cash flow yields of about 10%.
Here are the largest 10 holdings of the River Oak Discovery Fund as of March 31:
| Company | Ticker | % of portfolio |
| Cirrus Logic Inc. |
CRUS, |
4.9% |
| Kulicke & Soffa Industries Inc. |
KLIC, |
4.6% |
| Advanced Energy Industries Inc. |
AEIS, |
4.5% |
| Cohu Inc. |
COHU, |
3.7% |
| Asbury Automotive Group Inc. |
ABG, |
3.7% |
| Korn Ferry |
KFY, |
3.6% |
| Kforce Inc. |
KFRC, |
3.4% |
| Ambarella Inc. |
AMBA, |
3.3% |
| Applied Industrial Technologies Inc. |
AIT, |
3.3% |
| Perficient Inc. |
PRFT, |
3.2% |
Click on the tickers for more about each company.
Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.
Here are the largest 10 holdings of the Black Oak Emerging Technology Fund as of March 31:
| Company | Ticker | % of portfolio |
| Apple Inc. |
AAPL, |
5.7% |
| KLA Corp. |
KLAC, |
4.6% |
| Advanced Energy Industries Inc. |
AEIS, |
4.5% |
| Cohu Inc. |
COHU, |
4.1% |
| SolarEdge Technologies Inc. |
SEDG, |
3.9% |
| Cirrus Logic Inc. |
CRUS, |
3.9% |
| Cohu Inc. |
COHU, |
3.9% |
| Ambarella Inc. |
AMBA, |
3.4% |
| Applied Industrial Technologies Inc. |
AIT, |
3.4% |
| Salesforce Inc. |
CRM, |
3.3% |
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Berkshire Hathaway Sold U.S. Bancorp, Bank of New York Stock. Here’s What It Bought.
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The market capitalization of Apple Inc. has surpassed that of the entire Russell 2000 for two weeks, the longest stretch on record, according to Bloomberg data.
Apple’s market capitalization, which measures how much the company is worth based on the value of all its outstanding stock, surpassed that of the Russell 2000
RUT,
on April 27 and has held higher through Monday. The only other time that occurred was Sept. 1, 2020, when Apple’s valuation passed that of the small-cap index for only a day.
Apple’s premium over this group of small-cap stocks continued to widen over the past two weeks as the consumer-technology giant reported earnings that surpassed Wall Street analysts’ expectations.
With a market capitalization of roughly $2.7 trillion, Apple is now worth roughly $100 billion more than the combined value of all 2,000 stocks in the Russell 2000, according to Bloomberg data shared with MarketWatch.
To be sure, the gap narrowed somewhat on Monday as Apple shares declined by 0.4% to $171.80, while the Russell 2000 gained 1.3% to trade at 1,763.
A team of stock-market analysts from Bespoke Investment Group illustrated the trend in a chart shared on Twitter Monday.
U.S. equity benchmarks have powered higher in 2023, but some say the strength in popular indexs like the S&P 500 and Nasdaq Composite has masked weakness in other corners of the market.
Both the S&P 500, which has risen more than 7% year-to-date, and the Nasdaq Composite, which has risen nearly 18%, owe the bulk of their gains to a handful of megacap technology stocks including Apple, Microsoft Corp.
MSFT,
Alphabet Inc.
GOOG,
and Nvidia Corp.
NVDA,
The top 10 stocks in the S&P 500 hold a 29% weight in the index, and have been responsible for around 70% of its year-to-date performance gains, according to a MarketWatch report from last week.
See: The S&P 500 is top-heavy with tech. Here’s what that says about future stock-market returns.
The Russell 2000, meanwhile, is essentially unchanged since the start of 2023. Apple, by comparison, has risen more than 32% since Jan. 1, according to FactSet data. The relative weakness in small-caps has inspired discussion about whether this might be a buying opportunity, as market strategists told Barron’s.
See: Small-Cap Stocks Have Been Crushed. 3 With Big Potential.
Small-caps have struggled against a plethora of headwinds since the start of 2023. Shrinking corporate earnings, a string of regional-bank failures and signs of a looming recession have taken a heavy toll. Facing so much uncertainty, equity investors have sought safety in shares of megacap technology names this year following a punishing selloff in 2022.
“It is pretty incredible that one company could overtake an entire universe of small-cap stocks in terms of size,” said Callie Cox, U.S. equity strategist at eToro, during a phone interview with MarketWatch. “To me, it really speaks to how beaten down small-caps are.”
When Apple reported earnings for the quarter ended in March last week, the company’s management revealed a surprise growth in its iPhone business, which helped to overcoming a shortfall in Mac revenue. The company also promised investors billions more in dividends and stock repurchases, which helped to boost the stock price. Apple’s shares traded higher in response.
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Palantir
Technology’s earnings looked like they had something for everyone, as the data-analytics software company forecast its first profitable year and talked up its artificial-intelligence prospects. However, some Wall Street analysts are focused on slowing revenue growth as a reason to be wary of the stock.
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CNN
—
Apple on Thursday reported that its revenue fell 3% to $94.8 billion for the first three months of the year as consumers scale back spending on smartphones and computers amid looming recession fears.
The company’s revenue was slightly better than what Wall Street had expected, but it nonetheless represented the second consecutive quarterly revenue decline for the iPhone maker.
Apple attempted to appease investors by announcing up to $90 billion in share buybacks. Shares of Apple were largely flat in after-hours trading Thursday following teh results.
Despite the continued revenue decline, there were bright spots in the report.
Apple CEO Tim Cook said Apple hit a “a March quarter record for iPhone despite the challenging macroeconomic environment” and that the installed base of active devices reached an all-time high.
Apple’s latest quarterly earnings report comes amid a sharp decline in PC and smartphone sales globally after a surge earlier in the pandemic.
Worldwide PC shipments declined 30% in the first quarter of 2023 compared to the year prior, according to data from Gartner. Global smartphone shipments plunged 14.6% last quarter, according to separate data from market intelligence firm IDC.
Apple’s report on Thursday caps off a closely-watched earnings season for Silicon Valley amid broader economic jitters. All five Big Tech companies beat Wall Street’s estimates, but the numbers paint a stark picture of the industry at this moment.
Apple and its peers once enjoyed seemingly limitless growth. Now these business are struggling to grow sales and profits – or posting declines.
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Vice President Kamala Harris will host the chief executives of Alphabet GOOG GOOGL, Microsoft MSFT, OpenAI and Anthropic at the White House on Thursday to discuss artificial-intelligence issues.
Harris and senior administration officials aim to have a “frank discussion” of the risks in AI development and of “ways we can work together to ensure the American people benefit from advances in AI while being protected from its harms,” according to an invitation for the meeting obtained by MarketWatch.
The…
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In nearly every niche online community, there are two kinds of people: those who like the porn related to their obscure interests, and those who don’t.
With headphones enthusiasts, particularly those who enjoy high-performance, Chinese-made, or “chi-fi,” in-ear monitors (IEMs), the war is less carnal, since the languid anime girls that decorate the box art are presented more as muses than obvious sexual fodder. But, still, it carries on.
Though IEM girls aren’t usually explicit, they are sexualized, or at least, romanticized, by the people that buy them. Headphone fans will occasionally refer to these cartoon girls—who are, typically, original art made exclusively for a particular IEM, not existing anime franchise characters modified for marketing—as “mascots.” But, more frequently, they talk about them in terms of “waifu,” the manga-devotee shorthand for “attractive, vaguely Asian woman.”
What, apparently, makes IEM girls “waifu” material is the fact that they look like children. They’re frequently willowy, with ethereal babyfaces or actual billowing schoolgirl uniforms, like in the case of Moondrop’s $360 Blessing 2 Dusk, a collaboration with popular headphones reviewer Crinacle. Sometimes they decorate only the IEM box, like the snowy-haired girl gazing from Tanchjim’s $40 OLA, and sometimes they seem intended to personify a product’s soul, like Moondrop’s infamous Instagram post of a girl with torn stockings covered in…um, yogurt?
“Poured yogurt on the headphone,” says a translation of the now-deleted post, implying that the deeply blushing girl is actually a Moondrop headphone, one that is covered in yogurt.
Do they want people to fuck the headphones? The fans I talked to don’t seem to think it’s that deep.
“I didn’t know [anime girls on IEM box art] was a ‘trend’ until I’d heard of [the company] Moondrop and how people in the West thought it was unusual,” headphones fan M tells me over Reddit chat. “I live in Asia, so anime artworks aren’t really that rare or unusual. I think it gives the products and brands a sense of personality.”
Or, if not a personality, then at least a bit of mild, memorable sex appeal you wouldn’t normally associate with tech, like how a beer buzz helps get you excited for sitting on your couch and eating Bugles.
“[IEM anime girls help] attract more consumers,” Jeremiah, another headphone admirer on Reddit, says. And “sometimes, it makes the IEM more recognizable. Like, if you see a ponytail girl with glasses, you instantly know this is the Blessing 2 Dusk.”
But even those who appreciate the IEM girls have their limits. “As someone who likes to watch anime, I do enjoy the trend if the box art is done tastefully,” u/nopunterino tells me. “But sometimes I think manufacturers can go too far.”
“I might [not even be able to order an] IEM I’m interested in in fear of my roommate or my relative opening my box and seeing a bunny girl in a not very appropriate position,” Jeremiah says.
Both referenced SeeAudio’s collaboration with audiophile reviewer Z Reviews, the $100 Rinko—which has two girls wearing bunny ears on the box, their mouths hanging open as they squish remarkably spherical breasts together in a hug—as an example of a brand taking their anime girls “too far.”
“And we can never forget the Moondrop ‘yogurt’ incident,” u/nopunterino says.
Most people I talked to were blasé about IEM girls (and they are indeed IEM girls—Chinese-made over-the-ear headphones are mass-appeal items, not nerd bait like IEMs, and their design is overwhelmingly clinical). But it’s clear that some audiophiles have a bigger allegiance to them than they’d like to admit, and they’re especially willing to defend companies that take it “too far.”
Perusing the several impassioned “why is this happening?” threads on r/headphones for a few minutes will lead you to evidence. Those confused by all the breasts and childlike mouths seem afraid their opinion is unpopular before even voicing it, wondering as gingerly as a deer ducks a hunter, “At the risk of being burned at the stake—what’s with the ‘waifu’ girls on so many products?” or, more recently and to the point, “What’s the deal with IEMs and anime girls?”
“Why? Where did this start?” u/brubby3179, who began the latter thread, pleaded with users. “I’ve never seen that with over ears.”
“I’m newer to the hi-fi headphones scene so I only started noticing it in early 2021 when I started watching reviews of headphones on YouTube,” u/brubby3179 tells me, around two weeks after his thread inspired nearly 200 comments of bickering—so much discord, that r/headphones moderators locked the comments. “Some interesting comments in that thread, and even more interesting is how vehemently some of those guys defend the box waifus.”
Aside from some vague theories about the crossovers between headphones enthusiasts, anime fans, and tech workers with cash to burn, no one could provide a concrete answer to “why” IEM anime girls were ubiquitous. Moondrop, the company most frequently cited as popularizing them, did not respond in time for publication, either.
But, despite being fuzzy on the “why,” defenders are certain that they’d like to keep the girls around.
“Looks like harmless fun to me,” one user said. “It doesn’t make me want the product, but it’s not intended to appeal to me. It seems odd to be asking about it.” Hm. IEM Tony Soprano doesn’t want people asking questions. Suspicious.
“Why the hate !!!?? Lemme have my waifu. I need the yogurt waifu!” another user wrote repeatedly, more frenzied each time. “I need yogurt waifu moondrop? Please make it happen I will buy 10 pieces. Lol.”
Lol. Personally, I like some IEM girls, including Moondrop’s box art for the $20 Chu, a stoic figure with ashen bangs and eyes clear like freshwater. These less lewd drawings feel like patron saints or zodiac signs for techies, providing a strangely mystical way to imagine your headphones. Personifying them gives them a heart, and, I think, that might encourage preservation and care, things that are nice for the environment, your wallet, and your satisfaction.
Even so, I wish beautiful IEM art wasn’t limited to girls, or more “waifus” to be literally objectified and thrown away. Though many fans suggest “Asian culture” makes their waifu different from down-home misogyny, sexual IEM art is much like the racy souvenirs you find rusting in gas stations across the U.S.
Like breast-shaped salt shakers or keychains from Florida, many of which feminist artist Portia Munson documents in her silently damning drawings, IEM girls encourage men to think about women as pocket-sized ornaments, just something to keep around the house.
“These objects initially seem like a humorous and slightly shocking anomaly, showing the commodification of women’s bodies in tchotchkes,” says Munson’s website, “but, accumulated together, the sheer amount speaks to deeper issues surrounding society’s view of women as accessories.”
I’d like to see IEM girls valued more clearly for what advocates say they are, their collectibility and artistry, by being a part of a more dynamic box art practice that expands to include anime men, or landscapes, or fantasy creatures, or literally anything else. I’m getting bored of feeling like women are being used to sell tech, but aren’t welcome to it.
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Ashley Bardhan
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