|Day's range||3.1000 - 3.1000|
PepsiCo CFO Hugh Johnston discusses the company's decision on spending on social media platforms.
(Bloomberg) -- Amazon.com Inc. shares rallied on Monday, and the advance lifted the company’s market capitalization above Microsoft Corp. for the first time in more than a year.The stock rose as much as 4.5% in its fourth straight daily advance, giving the e-commerce and cloud-computing company a valuation of about $1.66 trillion, or about $30 billion more than Microsoft’s market capitalization. According to an analysis of Bloomberg data, Amazon last exceeded Microsoft in size in February 2019.Recent gains in Amazon have come amid a growing consensus that it will be a major winner from the pandemic, which has accelerated a shift to online retail and fueled demand for cloud-computing services. Earlier, Cowen raised its price target to the highest on the Street, citing the continued “demand surge” from the pandemic, “in particular as the U.S. faces staggered and sometimes halted re-openings.”Among U.S. stocks, Amazon’s rally means it is second only to Apple Inc. in size; the iPhone maker’s market cap leads at $1.73 trillion. A rally in mega-cap tech and internet stocks has also resulted in Google-parent Alphabet Inc. eclipsing $1 trillion in market cap recently.Globally, the list is topped by Saudi Aramco, Saudi Arabia’s national oil company, which currently has a market cap of about $1.78 trillion.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Tencent's (TCEHY) expansion strategy to take China-based gaming firm, Leyou Technologies Holdings Ltd. private is expected to stir up competition in the video gaming space.
(Bloomberg Opinion) -- The stock market has been on a tear for the past three months, and Big Tech gets much of the credit.But how can this possibly be when the coronavirus has inflicted so much damage on the U.S. economy, with the highest unemployment since the Great Depression and gross domestic product headed into a black hole? And anyway, it's not as if tech is untethered from the economy.Yet, maybe tech isn't all that dependent on growth in the U.S. Compared to the rest of the world, and for the first time in ages, many wealthy industrialized countries are doing better -- and in some cases, much better -- than the U.S. Nations such as Japan, South Korea and Germany not only have managed to contain the pandemic, but their economies are well ahead of the U.S.'s into their re-openings. For the past five years, a small group of tech stocks has had an outsized influence on U.S. markets. Two-thirds of the gains in the S&P500 have been driven by just six U.S. companies -- Facebook, Amazon, Apple, Netflix, Google (Alphabet) -- the so-called FAANG stocks -- and Microsoft. An index of those six stocks is up more than 62% since the March lows, while the S&P 500 is up about 40%.Overseas markets may very well be a key reason shares of the biggest U.S. tech companies are powering higher. These tech companies derive a surprisingly large share of their revenue from foreign markets. According to Standard & Poor's, companies in the S&P 500 derived 42.9% of their sales from overseas markets in 2018 (2019 data is not yet available).But this share is much higher for the big tech companies: Apple generated more that 55% of its revenue outside the U.S. in the year ended in September; in some quarters, overseas accounted for as much as 60% of revenue. International accounted for 54.5% and 53.8% of Facebook and Alphabet revenues, respectively. For Microsoft and Netflix, the split is about half domestic and half overseas (49.0% and 49.4%, respectively). Amazon is the Big Tech exception, generating a sizable majority of its revenue within the U.S.What make overseas so important, though, is because that's where the growth is. Netflix had revenue growth of 21% in 2019, but the domestic side was a laggard at just 7%. Facebook, meanwhile, now has more users in India than in the U.S., with Indonesia and Brazil growing fast. For Alphabet, Asia and Latin America have produced faster revenue growth than the U.S.It isn't a coincidence that these companies that are so reliant on the rest of the globe have seen their stock prices do well. The Covid-19 numbers suggest that much of the world is way ahead of the U.S. not only in terms of managing the pandemics, and that their economies are recovering faster.As of July 9, globally, there were more than 12 million confirmed cases of Covid-19 and almost 550,000 deaths. In the U.S. those figures were 3 million confirmed cases and 132,000 deaths. This data is a report card on how well the country is managing the pandemic: The U.S. has 4.2% of the world’s population, but 25% of the infections and 24% of the deaths.And yet, even this national incompetence has worked to the advantage of the Big Tech companies. All they require of their customers is a computing device and a network connection; users are not limited by geography -- either domestically or internationally. Nor do users need to have a physical presence at an office.Some companies are well positioned to survive the pandemic lockdown, thriving during an era of remote work and social distancing. Many of these same companies are well positioned to benefit from the rest of the world’s economic recovery. As it turns out, tech companies can profit both from the U.S.'s shutdown and a recovering Europe and Asia. It is a very effective one-two punch. It explains so much of the market’s gains.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Type a query into the Google search bar on a smartphone and there's a good chance the results will be dominated by advertising.That stems from a decision in 2015 to test a fourth ad, rather than three, at the top of search results. Some employees opposed the move at the time, saying it could reduce the quality of Google’s responses, according to people familiar with the deliberations. But the company brushed aside those concerns because it was under pressure to meet Wall Street growth expectations, one of the people said.By 2016, the extra marketing slot was a regular feature. It’s one of the many ways the search leader has altered how it presents results since its early days. Another example is the pre-packaged information Google often displays in a box at the top of a page, rather than sending users to other websites. Phased in gradually over years, changes like these have gone largely unnoticed by legions of consumers who regularly turn to Google to call up information and hunt for bargains. The company says these changes support its mission to organize the world’s information and make it useful and accessible to everyone.But to many web publishers and other businesses that have historically relied on the internet giant to send users to their sites, Google's subtle tweaks have siphoned off vital traffic and made it harder -- and costlier -- to reach customers online. Debate over Google's influence is gathering intensity as U.S. regulators prepare an antitrust case against the company in what will be one of the biggest legal clashes between the government and a corporation since the U.S. sued Microsoft Corp. in 1998. Google controls about 85% of the U.S. search market, and the changes it’s made have piled pressure on businesses to pay more to appear at the top of search results. That’s already a focus of regulators. Last year, David Cicilline, head of the House Subcommittee on Antitrust, asked Google if a 2004 statement from co-founder Larry Page that the company wants to get users “out of Google and to the right place as fast as possible,” still described its approach. In a written response, Google simply skipped the question.The government is wading into a complex business with many competing interests that Google must balance. Users want the best answers. Web developers need eyeballs. Shareholders demand growth. From the beginning, websites have tried to trick Google’s algorithm into feeding them traffic, and they complain when the company cracks down. However, some web developers and advertisers say this balance has swung too far in Google’s favor. In the early 2000s, the company’s search engine offered a simple deal: Produce quality information and Google will send you traffic so you can make money showing ads. Reinvest some of that cash to make better experiences, and the web will grow, giving Google more territory to explore and organize.“Our search results are the best we know how to produce. They are unbiased and objective,” Page and co-founder Sergey Brin wrote when the company went public in 2004. Ads would be few, helpful and unobtrusive, they said. This deal has been slowly changing, though. A turning point came in June 2019. That was when more than half of searches kept users on Google for the first time, rather than sending people to other sites through a free web link or an ad, according to data from digital marketing company Jumpshot.“We’ve passed a milestone in Google’s evolution from search engine to walled-garden,” said Rand Fishkin, who has advised businesses on how to work with Google’s search engine for nearly two decades. “They used to be the good guys.”On smartphones, the change has been more pronounced. From June 2016 to June 2019, the proportion of mobile searches that led to clicks on free web links dropped to 27% from 40%. No-click searches, which Fishkin says suggests the user found the information they needed on Google, rose to 62% from 56%. Meanwhile, clicks on ads more than tripled, Jumpshot data show. When the search engine can give straightforward answers and save users a click, it will do that, and some sites have embraced this as a new way to gain traffic, according to Danny Sullivan, public liaison for Google’s search team. The company knows “the best information is coming from the web” and it wants to support the ecosystem, he added. Google also argues that ads keep the search service free for users and are confined to the small percentage of queries that suggest someone is looking to buy something.In some cases, Google pays to summarize other companies’ content. Sports scores are one example, according to a May 20 blog post. The company is also planning to pay select media outlets in a news service later this year. But Google doesn’t think everyone’s content is worth paying for.Mike Moloney runs FilterGrade, a marketplace for custom filters photographers use to edit their work. He gets most of his traffic from articles on his website, such as lens reviews and camera-related top 10 lists. Recently, he noticed Google pulling photos and text straight off the site and showing it at the top of search results. There’s a link to Moloney’s company at the bottom of the section, but clicking on any of the photos brings the searcher to another Google page full of shopping ads for film stock. None of these ads are related to, or benefit, FilterGrade -- unless Moloney chooses to pay Google for placement.“They’re doing a good job of making it subtle, almost like it’s an accident half the time,” Moloney said.When Moloney tweeted his frustration in April, Google's Sullivan said the company would review the practice. Several months later, the situation remained the same.It's often unclear who owns content online, especially when it's relatively easy to scrape information from one site and re-purpose it quickly on a new web page. But even when ownership is not in dispute, Google's combination of direct answers and extra ads has pushed free links to sites further down the search results page. Fishkin’s former colleague, Pete Meyers, has been testing the same list of 10,000 search terms for years. On average, users now have to scroll down twice as far to find the first organic free link, compared with 2013. “This has been the slowest but most consistent march in tech,” venture capitalist Bill Gurley wrote on Twitter last year. “If you are still holding out hope for a SEO strategy you must be intentionally ignoring all of the data in front of you,” he added, referring to search engine optimization, a popular way of improving websites to rank higher in Google’s free results. While businesses struggle to adjust, Google’s revenue and profit have surged. In 2009, the company generated sales of $24 billion and profit of $6.5 billion. Last year, parent Alphabet Inc. reported $162 billion in revenue and $34 billion in net income. The Search business alone brought in almost $100 billion in sales.Much of that growth has come from adding more ads. On mobile phones, ads now take up the entire first screen for some searches. In 2015 and early 2016, when the company tested adding a fourth ad to the top of search results, there was push-back from some employees, according to people familiar with the situation who asked not to be identified discussing internal debates. The main concern was that the fourth ad was often lower quality than the first free web link right below, one of the people said. Google dismissed those worries and went ahead with the fourth ad slot because it was under pressure to keep revenue and profit growing to meet analysts’ expectations, this person added.Google said it removed an ad slot on the side of the page when it added the fourth ad on top, leading to a lower number of overall ads for “highly commercial queries.” Fewer than 2% of all searches result in four or more text ads on the first page, according to the company.Kevin Hickey, chief executive officer of Online Stores Inc., said these changes have forced him to spend more on Google search ads to keep traffic flowing to his e-commerce businesses. More than a decade ago, about two-thirds of Hickey’s Google traffic came from free, or organic, listings. But as Google increased ad slots to the top of results, that mix flipped. Organic results account for about 20% of visitors to his sites now, and he spends about 10% to 15% of his revenue on Google ads. He has raised prices, but his profit margins have shriveled. “The prices that consumers are paying are now higher because of Google’s business model,” Hickey said.Google doesn’t have a responsibility to pad the bottom lines of for-profit businesses. But one of the internet’s most beloved not-for-profit services has been caught up in this, too.Wikipedia pages were some of the first that Google mined to answer search queries directly. The company would often fail to credit the digital encyclopedia clearly, leaving Wikipedia managers wondering if they were Google partners or simply bystanders, according to a person familiar with the situation. The concern inside Wikipedia is that its relevance will slip away the more its content is read in other places. The thousands of volunteers who write and edit the site’s articles may stop contributing if they see their hard work benefiting a trillion-dollar corporation instead of a non-profit, this person said. They asked not to be identified to preserve their relationship with Google. “We regularly consider the impact of third-party use of Wikipedia’s information, especially as the public increasingly consumes content outside our sites,” a Wikipedia spokeswoman said. “We’ve worked with Google over the years to improve the way they credit content from Wikipedia in the knowledge panel so that the public clearly knows when they’re reading information from Wikipedia.” For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Nokia (NYSE: NOK) was once one of the world's top mobile phone makers, but it sold its handset unit to Microsoft (NASDAQ: MSFT) in 2014. The Finnish company subsequently focused on growing its Nokia Networks business, which sells telecom equipment to carriers. Nokia bought its rival Alcatel-Lucent in 2016 to expand that business and become the world's second-largest telecom equipment company.
Investing in these diverse technology companies will allow you to benefit from hot trends while getting paid along the way.
FedEx (NYSE: FDX), Lululemon (NASDAQ: LULU), and Intel (NASDAQ: INTC) are all quietly making moves that set them up nicely for the future. Interestingly, FedEx and Lululemon have been able to adapt to COVID-19 realities and increase business, while Intel works behind the scenes to deliver advanced technology today. In 2019, FedEx cut ties with Amazon (NASDAQ: AMZN), causing many on Wall Street to shake their heads.
(Bloomberg) -- Microsoft Corp.’s LinkedIn programmed its iPhone and iPad applications to divert sensitive information without users’ knowledge, according to a class-action lawsuit.The apps use Apple’s Universal Clipboard to read and siphon the data, and can draw information from other Apple devices, according to the complaint filed Friday in San Francisco federal court. The privacy violations were exposed by Apple and independent program developers, according to the suit.Developers and testers of Apple’s most recent mobile operating system, iOS 14, found LinkedIn’s application was secretly reading users’ clipboards “a lot,” according to the complaint. “Constantly, even.” Apple’s clipboard often contains sensitive information users cut or copy to paste, including photos, texts, emails or medical records.“LinkedIn has not only been spying on its users, it has been spying on their nearby computers and other devices, and it has been circumventing” Apple’s clipboard timeout, which removes the information after 120 seconds, according to the suit.LinkedIn spokesman Greg Snapper said the company is reviewing the lawsuit. Erran Berger, head of engineering at LinkedIn, said in a July 2 tweet that the company had traced the problem to a code path that performs an “equality check” between contents on the clipboard and typed text. “We don’t store or transmit the clipboard contents,” he added.The lawsuit was filed on behalf of Adam Bauer of New York City, who says he routinely used the LinkedIn App on his iPhone and iPad.The suit seeks to represent a class of users based on alleged violations of federal and California privacy laws and a breach of contract claim.LinkedIn’s information collecting was reported earlier this month by outlets including the Verge and Forbes.The case is Bauer v. LinkedIn Corp., 20-cv-04599, U.S. District Court, Northern District of California (San Francisco).(Updates with LinkedIn spokesman in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Strong growth in several massive markets will help drive NVIDIA's (NASDAQ: NVDA) share price to $500. So says Rosenblatt Securities analyst Hans Mosesmann. On Friday, Mosesmann reiterated his buy rating on NVIDIA's stock and boosted his target price from $400 to $500.
Warren Buffett makes it look so easy: find high-quality companies, wait for a fair price to buy, and then hold them... forever. The problem of course is that t...
The Microsoft (NSQ:MSFT) share price has risen by 13.0% over the past month and it’s currently trading at 214.32. For investors considering whether to buy, hol...
Investors expect the company's technology platform to come in handy as the world corrals the coronavirus pandemic.
(Bloomberg) -- Some of Wall Street’s biggest stocks are coming off their best quarterly performance in years, and with the broader economy still grappling with the pandemic, analysts are starting to express some skepticism about high-profile rallies.The S&P 500 surged 20% in the second quarter, its biggest quarterly gain since 1998. While the superlative nature of the rally was partly a function of timing -- many components hit a bottom right before the end of the first quarter -- the move was fueled by tech and internet stocks, which outperformed the benchmark and have heavy weightings due to their massive market capitalizations.Apple and Amazon.com both gained more than 40% during the quarter, making it the iPhone maker’s best quarter since 2012 and Amazon’s best since 2010.On Wednesday, Deutsche Bank confessed it was “surprised at both the speed and magnitude of the rebound” in Apple shares, adding that the move “has us nervous.” Raymond James echoed this tone on Tuesday, seeing uncertainty surrounding Apple’s forecast given an expected delay in the iPhone 12, a product Nomura Instinet expects “will fall short of a supercycle.” Both Deutsche Bank and Raymond James still recommend buying Apple shares.Amazon remains a consensus favorite on Wall Street -- more than 90% of the firms tracked by Bloomberg recommend buying it -- but the degree to which the share price exceeds analysts’ average price target is near a multiyear high, suggesting that even bulls aren’t expecting much additional upside.Among other mega-cap names, Microsoft rose 29% over the second quarter, its best such showing since 2009. Both Facebook and Google-parent Alphabet notched their biggest quarterly gain since 2013, with Facebook up 36% and Alphabet up 22%, based on its Class A shares. Netflix rose 21% last quarter.All are at or near record levels, and the rallies will soon be tested as each member of the group is scheduled to post quarterly results before the end of the month, with Netflix reporting next week.Apple EstimatesFor Apple, the rally has come despite a more tepid view for its upcoming results. Wall Street expects third-quarter earnings, excluding some items, of $2.03 a share, a consensus that is down 6.8% from where it was three months ago. The consensus for revenue has declined 0.9% over the same period.While analysts debate whether the results will justify the recent gains, many of these names are seen as potential pandemic winners. Microsoft is expected to see stronger demand for its cloud-computing and workplace collaboration products as people continue to work remotely, while the e-commerce wave lifting Amazon and others is seen as outlasting the coronavirus’s impact on brick-and-mortar stores.Apple analysts also see a number of reasons to be optimistic for the long term, including the company’s services business, wearable products, and its stock-buyback program. “Overall, we believe the directionality and reasoning behind AAPL’s stock rise,” Deutsche Bank’s Jeriel Ong wrote. Still, the firm has “ambivalence at these levels.”Firms expressed a similar sentiment about Netflix, which has seen higher engagement during the pandemic. Rosenblatt Securities “struggle[s] to see the upside” from current levels given “uncertainty over how [long] this favorable environment will last.” Stifel continues “to grapple with the risk/reward profile given limited 2H visibility.”Imperial Capital downgraded the stock earlier this week, moving away from an outperform rating that it had held since starting coverage on Netflix about two years ago, according to data compiled by Bloomberg. Following the recent advance, Netflix “will begin a fairly extensive range-bound trend as other long opportunities emerge in the media space,” the firm said.(Removes reference to Microsoft reporting next week in seventh paragraph of story originally published July 8.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Walgreens is raising its cost savings target as the pandemic hits sales and profits, and analysts see Microsoft and Cisco as good bets.
Top Research Reports for Apple, Microsoft & TMobile
Three of the biggest players in the virtual meeting space, Zoom Video Communications (NASDAQ: ZM), Slack Technologies (NYSE: WORK), and Microsoft (NASDAQ: MSFT) Teams, all had big product announcements this week. The timing of these updates indicates the intensity of the competition between these leading virtual meeting providers. The offering will make accessing Zoom Rooms and Zoom Phone easier by providing subscription options for phone and meeting room hardware to complement its Zoom videoconferencing services.
Here we discuss four companies stirring up competition in enterprise communication space, with recent efforts to enhance their video conferencing platforms amid work-from-home push.