Cisco Slips and Walmart Surges on Earnings | Bloomberg Technology

17 May 2024 (6 months ago)

Cisco Earnings Report

Cisco's conservative outlook led to a 2% drop in its stock price.
CFO Scott Herron discussed the company's recent earnings and provided insights into its business performance.
Despite supply chain disruptions, Cisco cleared its backlog and experienced a revenue spike.
The company witnessed flat overall orders, with growth in security, data center networking, and campus switching.
Cisco reported $1 billion in AI infrastructure orders, primarily for backend networking and optics in large cloud and Tier 2 infrastructure buildouts.
Investors reacted positively to Cisco's earnings report, as order declines were not as severe as anticipated.
The recent acquisition of Splunk has yet to contribute significantly to Cisco's revenue streams.
Cisco is collaborating with Qualcomm to develop a cheaper accelerator alternative to NVIDIA's offerings for AI applications.

Walmart's results showed a significant jump in its online business, contributing to a 6% increase in its stock price.
Walmart reported a 22% year-over-year growth in its online business, driven by improved capabilities such as early morning deliveries, faster shipping, and enhanced order accuracy.
Walmart's e-commerce growth rivals that of Amazon, with 4 billion items delivered within the past 12 months through same-day or next-day delivery.
Walmart is facing issues with third-party vendors selling fake handbags on its Marketplace platform, affecting customer expectations and growth opportunities.

Chief Global Strategist Seema Shah discusses investor sentiment and the recent record highs in the market.
Shah believes the market rally is not solely driven by the "Magnificent Seven" tech stocks but is spreading to other sectors of the economy.
Valuations of chip stocks and other tech giants are discussed, with Shah acknowledging that they may seem frothy but not comparable to the Dot-com bubble.
The impact of the U.S.-China trade tensions on the technology sector is considered, with Shah suggesting that it could affect individual stocks differently.
Shah recommends looking beyond the U.S. for investment opportunities, highlighting Europe and China as attractive regions due to their economic surprises and valuations.

The use of AI in the workplace and at home is briefly discussed, with Shah emphasizing its importance in analyzing companies and making informed investment decisions.

Perplexity, a company creating a new advisory board, discusses its strategies for scaling up, improving search distribution, and enhancing mobile experiences.
Perplexity's CEO, Aravind Srinivas, responds to Google's emphasis on AI integration into search, suggesting that it may be a reaction to Perplexity's success.
Srinivas highlights Perplexity's plans to differentiate itself by focusing on categories where Google's incentives are lower, such as shopping, insurance, travel, and education.
Perplexity utilizes OpenAI's large language model but believes its approach is superior to Google's due to its separate product strategy and orchestration of multiple models and indexes.
Srinivas acknowledges the competition for talent and resources in the AI field and hints at potential future fundraising while emphasizing efficiency and revenue growth.
Perplexity prioritizes the number of queries it receives daily as a key metric for growth and is currently in the late single digits for daily active metrics.
Perplexity, an AI startup, is considering acquiring smaller startups and is open to being acquired by larger technology companies.

A bipartisan AI group released a roadmap to guide Congressional efforts in harnessing AI benefits and mitigating risks, recommending $1 billion in annual government spending on non-defense AI development.
Chainlink, a company that links blockchains and brings real-world data on-chain, has been working with Bank of America and Citibank to create on-chain digital assets driven by data.
Real-world asset tokenization is gaining institutional interest, with assets backed by data being particularly attractive.
Financial institutions have a role to play in ensuring compliance and allowing users to use blockchain products in a way that regulators and central banks find acceptable.
Central banks are not going away and will likely become the biggest users of blockchain technology, generating the most assets and payments.
The tokenization of core financial products like treasuries and market funds is happening alongside the tokenization of non-securitized assets like carbon credits and real estate.

ServiceNow, a fast-growing software company, is hiring from its larger competitor, Salesforce, in a bid to edge into Salesforce's market share.
There are many job offers across the board.
It will be interesting to see how the new talent infusion affects companies that have increased their headcount by 3,000 while most companies have cut their workforce by that amount.