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The Zacks Analyst Blog Highlights: Facebook, Apple, Alibaba, Amazon and Alphabet

Zacks Equity Research

For Immediate Release

Chicago, IL – January 22, 2020 – announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Facebook FB, Apple AAPL, Alibaba BABA, Amazon AMZN and Alphabet GOOGL.

Here are highlights from Tuesday’s Analyst Blog:

Tech Daily: Facebook, Apple, Digital Taxes & More

 Facebook’s role in elections and its UK expansion, Apple’s Cook in Ireland, Alibaba’s certification, the digital tax truce between the U.S. and France, and the EU ban on facial recognition technology are the top stories. Read more:

Facebook on Protecting Elections/Personal Data

Speaking at the Digital Life Design (DLD) conference in Munich, Facebook’s Vice-President for Global Affairs and Communications, Nick Clegg told a skeptical audience that the company was currently better equipped to prevent meddling in the upcoming U.S. elections than it was four years ago.

"We are getting better and better at protecting elections from foreign interference," he said

Last time, the platform was used by Russian and other interests, which circulated fake news, propaganda and other divisive content that was subsequently investigated and exposed.

When Amazon’s chief technology officer Werner Vogels took a shot at the advertising model, saying, “If you don’t pay for the product, you are the product,” Clegg calmly replied that, “Unlike you, I believe an advertising business model where the user doesn’t have to pay is a very ingenious and good thing.”

Again, when Cambridge Analytica staffer-turned-whistleblower Brittany Kaiser raised the issue of inadequate moderation being wrongly termed by the company as censorship, he disagreed.

His attitude reflected the company’s stand that it was taking the best possible approach.

Facebook Expansion in UK

Facebook is gearing up to growing its biggest engineering center outside the U.S. in Britain after it leaves the EU. The company has announced its intention to make 1,000 new hires in the country. With 500 positions in technology, including software engineering and data science and the remaining dedicated to "community integrity," another way of saying content moderation, the company’s new focus on responsible growth is clear.

What caused this changed approach, whether internal recognition of the extent of the problem or external laws such as General Data Protection Regulation (GDPR), is less important. What’s more important is that users, advertisers and governments are sure to take note.

Apple’s Cook Roots for International Tax Law

In Ireland, to receive the first award of its kind for 40 years of Apple’s investment in the country, Tim Cook touched on all the hot issues affecting the company’s relations with its very important strategic partner. Apple employs 6,000+ people in Cork, Ireland.

At the top of the list was of course the question of tax law, which the European Commission determined in 2016, amounted to illegal state aid from Ireland. Apple subsequently paid the demanded 13 billion euros in back taxes that Ireland is keeping in an escrow account while both Apple and Ireland continue to appeal the case.

Taxation of very large (primarily technology) companies has been criticized by many because of the complex structures they typically employ to reduce the tax bill. Whether these circumventions are legal or not is being determined in court. At issue is also the question of whether companies should be taxed in the countries in which they are based or in the countries in which they earn revenue.

An international consensus on how these things should be dealt with will help compliance. So Tim Cook expressed optimism that the intergovernmental Organization for Economic Co-Operation and Development (OECD) will find a solution to the problem this year. More than 130 countries recognize the need and the OECD is reportedly working on a law that will tax the companies where they generate revenue.

"It's very complex to know how to tax a multinational... We desperately want it to be fair," Cook said.

He also commented on privacy issues, lauded the GDPR and said, "We were one of the first to endorse GDPR, we think it is overall extremely good, not only for Europe. We think it's necessary but not sufficient. You have to go further and that further is required to get privacy back to where it should be."

America’s Truce with France

The presidents of the two countries are putting up a jollier front, having agreed to a ceasefire on the digital tax issue. France is already charging American tech giants and America had threatened to do likewise with French luxury items such as wine and cheese.

“We now have an agreement between the two presidents to avoid any tariff escalation and avoid any trade war,” French Finance Minister Bruno Le Maire told reporters.

But the enthusiasm with which the French are reporting the meeting isn’t reflected in the U.S. response, which mentioned that the “two leaders agreed it is important to complete successful negotiations on the digital services tax.”

They are both headed to Davos to attend the OECD meeting where Macron will raise the issue of digital taxation.

Alibaba’s Cloud Gets Entertainment Industry Nod

Alibaba has announced that it has become the first public cloud provider to win the important Trusted Partner Network (TPN) certification from the coalition between the Motion Picture Association of America (MPAA) and the Content Delivery and Security Association (CDSA). The company takes this as acknowledgement of its security, dependability, flexibility and scalability prowess in the storage and delivery of content from the cloud.

Alex Li, General Manager of Alibaba Cloud South Asia said, “With such high value and sensitive assets to protect, production houses are naturally drawn to the solutions that offer the highest levels of security.”

Tech Leaders Divided on Facial Recognition Ban

The EU is planning a 3-5 year ban on the use of controversial facial recognition technology so it can come up with a law to effectively regulate it.

Alphabet’s Pichai supports the ban and earlier, in a Financial Times opinion column, has talked about the importance of government oversight in AI and the need for global cooperation in developing standards. But Pichai thinks certain sectors, such as medical devices and self-driving cars deserve a break from the restrictions.

Clearly, the company reps have their financial goals in mind and regulators are likely to listen to everyone given the need to maintain a balance between the advancement of science and encroachment of privacy. 

More Stock News: This Is Bigger than the iPhone!                  

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Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. 

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