Tech Stocks Flirt With Worst Week Since 2022 | Bloomberg Technology
10 Sep 2024 (8 days ago)
Federal Reserve Actions
- Christopher Waller, a Federal Reserve Governor, stated that it is time to cut rates after the jobs number came in at 142,000 and unemployment fell back to 4.2%.
- Waller believes that the current batch of data no longer requires patience, but action is needed, although he did not specify what that action would be.
Impact of Fed Actions on Markets
- Shana Sissel, CEO of Banrion Capital Management, believes that while the Fed's actions to control inflation by raising rates are impacting labor markets and slowing growth, technology trends like AI are still long-term winners.
- The stock market experienced a significant decrease of about 2.5% but later recovered slightly.
Technology Trends
- Blockchain technology is considered a revolutionary protocol with the potential for widespread adoption, similar to protocols like HTTPS.
- Nvidia, despite demonstrating strong fundamentals and significant revenue growth, experienced a decrease in stock price due to investors' disappointment in the growth rate not meeting the exceptionally high expectations.
DocuSign's New Product Line
- DocuSign has launched a new product line that expands beyond its existing e-signature products. Early results from customer deployments have been positive, with users praising the product's ability to provide insights into contract data.
- DocuSign has been incorporating AI into its products for a long time and has seen a significant advancement with the emergence of new AI models. The company believes that the cost of AI is decreasing, as evidenced by the dropping cost per item processed by these models.
UiPath's Performance and CEO Transition
- UiPath, an automation software company, experienced a 10% revenue growth and a slight increase in its recurring revenue forecast. Despite these positive results, the company's shares fell amidst a CEO transition.
- UiPath CFO and COO, Ashim Gupta, highlighted the company's strong execution, exceeding financial metrics, raising operating margins, and increasing free cash flow.
UiPath's Business Growth
- The company closed the largest test automation deal in its history with one of the world's largest tech companies.
- The company's annual recurring revenue, similar to a subscription model, is growing by 19%.
- The company uses its platform internally, with over 350 automations performing tasks ranging from invoice processing to complex vendor engagements.
Market Performance and Broadcom's Challenges
- The NASDAQ 100 experienced its most significant weekly decline since November 2022, dropping 2.5% in the session.
- Broadcom experienced a decline in its stock price despite strong performance in AI, with its forecast disappointing investors.
- The semiconductor industry faced a challenging week, with the sector down 9% and Broadcom experiencing a significant decrease in its stock price.
- AI revenue growth is unpredictable and inconsistent, making it difficult to determine when Broadcom will secure customers for its AI chips.
Intel's Strategic Plan and Mobileye
- Despite strong growth in the semiconductor industry, Intel is facing challenges and considering selling a portion of its 88% stake in its automated driving unit, Mobileye, to raise funds for its strategic plan.
- Intel's CEO and CFO have stated that the company is looking to streamline operations, respond quickly to market changes, and capitalize on opportunities, which may involve divesting non-core assets like Mobileye.
- Mobileye has experienced a fluctuating cycle of growth and decline, with poor earnings reports significantly impacting its performance.
TSMC's Arizona Facility and Global Semiconductor Regulations
- TSMC's Arizona facility has achieved production yields comparable to its established plants, indicating that the U.S. project is on track to meet its objectives.
- The Biden administration is developing stricter export regulations for quantum computing and semiconductor products, primarily targeting China.
Google's Antitrust Investigation
- The U.K.'s Competition and Markets Authority (CMA) has found that Google is abusing its dominant position in advertising technology.
- The CMA investigation found that Google favors its own services in its advertising technology, harming U.K. advertisers and other businesses.
- Google could be fined up to 10% of its global turnover, but the CMA may offer other remedies.
Apple's Upcoming Product Releases
- Apple is anticipated to release a new iPhone with upgrades focused on Apple intelligence and camera improvements, including a 48-megapixel ultra-wide lens.
- For the 10-year anniversary of the Apple Watch, the company is expected to release a new model with a larger display, faster processors, and sleep apnea detection as a major health feature.
- Apple is also revamping its AirPods lineup with a new entry-level and mid-tier option.