Technology

HP to Post ‘Strong’ Fiscal Q2 Margins, Weak Personal Computer Revenue in Short Term, BofA Says

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HP (HPQ) will likely report strong fiscal Q2 margins in the personal system and print divisions driven by its cost management actions, BofA Securities said in an earnings preview Thursday. BofA said it expects revenue of the personal computer division to be weak in the near term with a potential recovery in H2. The company’s print division will face revenue headwinds due to soft demand in China and a tough pricing environment amidst a weakening Yen, which favors HP’s competitors, according to the preview. The firm expects HP’s fiscal Q2 earnings per share to align with the mid-point of company guidance between $0.76 and $0.86 and street estimates of $0.81. BofA anticipates Q2 revenue of $12.5 billion for the quarter, below estimates of $12.6 billion, and raised its 2025 revenue outlook to $55 billion from $53 billion based on personal computer momentum into 2025. HP’s fiscal Q2 earnings are slated […]

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Google’s Potential Gemini-Apple Deal Announcement Seen Shifting to June Conference, UBS Says

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Alphabet-owned (GOOGL, GOOG) Google’s potential deal to license its Gemini generative artificial intelligence for iPhones may be featured at Apple’s (AAPL) Worldwide Developers Conference in June, UBS Securities said Thursday in a report. “We now look to WWDC24 as the next potential catalyst venue” for the deal after the Google I/O annual developer conference concluded with no announcement, UBS said. As expected, UBS said I/O 2024 highlighted Gemini’s capabilities. “It seemed to us that Google was more keen this year to thematically and explicitly draw the link between Gemini and practical contextual utility across many of its apps,” the report said. “That Google is incorporating Gemini not just within its apps but also within the Android OS in our view underscores the reason why all hardware manufacturers should be weighing working with the company to drive innovation,” UBS said. UBS also said a broader rollout for Google’s AI Overviews is

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Applied Materials 2Q Revenue Ticks Up, Surprising Wall Street

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Applied Materials posted slightly higher revenue in the fiscal second quarter and forecast another rise on the top line in the current period, a positive sign for a recently down semiconductor market. The Santa Clara, Calif.-based semiconductor equipment company reported a profit of $1.72 billion, or $2.06 a share, in the quarter that ended April 28, compared with a profit of $1.58 billion, or $1.86 a share, a year earlier. Analysts polled by FactSet expected a per-share profit of $2. Stripping out certain one-time items, the company posted an adjusted profit of $2.09 a share, greater than the $1.99 expected by analysts surveyed by FactSet. Revenue rose from a year earlier to $6.65 billion, beating the $6.54 billion expected by analysts polled by FactSet, which would have represented a slight drop from a year earlier. A year-on-year drop in revenue from its semiconductor systems segment was offset by higher revenue

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Salesforce Set to Exceed Q1 Estimates as Partners Report Healthy Deal Activity, BofA Says

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Salesforce (CRM) is expected to beat estimates for Q1 as feedback from its partners suggested that deal activity remained healthy, BofA Securities said in a note Wednesday. The firm said it expects Salesforce to report a 1 percentage point upside to its current remaining performance obligation, or cRPO, growth estimate of 12% and “some upside” to its earnings estimate of $2.37 per share for Q1. The company is scheduled to report its Q1 financial results on May 29. The company’s solid pipeline builds confidence in potential growth and supports cRPO growth outlook for Q2, BofA added. “We expect management to flow through Q1 upside to the outlook for [fiscal year] 2025 subscription growth and margin of above 10% [constant currency] and 32.5%,” according to the note. The firm said the company was meeting its partners’ expectations overall with a higher mix indicating better than expected results. Strong performance was noted

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Dell Technologies AI Server Momentum Quickens, Boosting Outlook in 2025, 2026, Morgan Stanley Says

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Dell Technologies (DELL) remains “the best way to play” prospects for artificial-server momentum, storage demand and an improving personal-computer market, boosting prospects for fiscal 2025 and 2026, Morgan Stanley said Wednesday in a report. Morgan Stanley raised its price target on Dell to $152 from $128 and maintained an overweight rating on the stock. Dell shares jumped 9.5% in recent trading Wednesday. Customer and supply chain checks in the past month show Dell gaining momentum “in enterprise infrastructure, including competitive AI server wins and inflecting storage strength,” the report said. The trend suggests Dell’s “strongest forward spending intentions” in more than six years, Morgan Stanley said. Recent checks also indicate that component vendors and partners are aiming for the higher end of the estimate for AI server builds in 2024, potentially reaching 60,000 for Dell, the report said. “All in, we are hearing about more AI server momentum” at Dell

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Nvidia Set for Robust Q1 Revenue Fueled by Reduced Lead Times, UBS Says

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Nvidia (NVDA) is poised for a strong Q1 revenue, likely reaching $26 billion, owing to reduced lead times on chips, UBS Securities said in a note emailed Wednesday. The mid-December initial shipment timing for the Blackwell processors has some investors concerned about the transition, UBS said. The launch of Blackwell chips is expected to drive even stronger demand for next-generation GB200 rack system for data centers, leading to increased revenue and EPS forecasts for next year, the note said. But these concerns are likely overstated, the firm said, and recent talks with customers and supply chain assessments suggest strong demand for its graphics processing unit microarchitecture “Hopper” that will persist throughout the year. Despite the sell side lagging in projections for 2025, UBS believes most investors expect EPS in the high-$30s, below its estimates following recent checks. With this demand outlook, “we would expect and hope to see another substantial

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CFRA Maintains Buy Recommendation On Shares Of Akamai Technologies, Inc.

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We trim our target price to $103 from $132, on a P/E of 16x our NTM EPS view of $6.42, above its three-year historical average on rising momentum in its Security and Compute businesses. We cut our 2024 EPS view to $6.38 from $6.76 and drop our 2025 EPS forecast to $6.96 from $7.49. AKAM posted Q1 revenue of $987M, missing consensus by $2.18M, and non-GAAP EPS of $1.64 beat by $0.03. Security revenue accelerated 21% Y/Y (vs. 6.4% in Q1 2023), while Compute revenue increased 25% Y/Y. Compute registered strong momentum from rapid growth in customer count and uptake of new cloud computing solutions, up more than 4x on a year-over-year basis. Security saw continued strength with Zero Trust, its Guardicore segmentation solution, and Akamai API security. However, Content delivery was weaker than expected from slower traffic growth and cost optimization efforts with a large social media customer. We

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Alphabet’s Talks to Acquire HubSpot Advance

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Alphabet (GOOG, GOOGL) is in advanced discussions to acquire HubSpot (HUBS), negotiating terms of a potential deal, Bloomberg reported Thursday, citing people familiar with the matter. The companies are still in talks, with no final agreement reached yet, and there’s no assurance that a deal will materialize, sources told Bloomberg, adding that another potential buyer could also emerge. HubSpot, specializing in customer relationship management for smaller businesses, currently has a market value of $30 billion, the report said. Last month, Reuters reported that Google parent Alphabet had engaged in discussions with bankers regarding a potential offer for HubSpot.

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Apple Stock Has Room to Rise. Don’t ‘Underestimate’ the IPhone. — Barrons.com

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By Angela Palumbo Apple stock has been regaining its footing after earnings, and Evercore ISI expects more gains, largely from the tech company’s most popular product. Analyst Amit Daryanani rates Apple at Outperform with a target of $220 for the price, which implies a gain of 20% from its closing level of $182.74 on Wednesday. The stock has dropped 4.7% this year but is up 5.6% over the past 12 months. Wall Street has been waiting to see how Apple will respond as other tech companies unveil initiatives linked to generative artificial intelligence, as well as whether it can improve its market share in China. Concern about both points has weighed on the stock, but Daryanani said in a note Thursday that “investors should not underestimate the ability of the iPhone to continue to deliver growth over the next five years.” The iPhone is by far the largest revenue generator

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Arm Holdings 4Q Revenue Jumps 47%, But Shipments Drop 10%

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Arm Holdings is one of the most mentioned companies in the U.S. across all news items in the past 12 hours, according to Factiva data. The semiconductor and software design company on Wednesday posted a fiscal fourth-quarter net profit of $224 million, or 21 cents a share, with revenue jumping 47%, to $928 million. Analysts polled by FactSet had forecast sales of $865.9 million. Arm Holdings said chips reported as shipped declined to 7 billion. For the first quarter, revenue is expected to be $875 million to $925 million, exceeding analysts expectations of $866.4 million. It expects fiscal-year revenue of $3.8 billion to $4.1 billion, in line with analysts views. Shares are recently down 2%. Dow Jones & Co. owns Factiva.

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Apple’s iPhone Shipments to China Surge by 12% in March, UBS Says

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Apple’s (AAPL) iPhone shipments to China increased by 12% in March, UBS Securities said in a note emailed Thursday. “On Apple’s most recent earnings call, one of the biggest surprises was the disclosure that iPhone revenue increased YoY in the March quarter despite data that suggested ‘sell-through’ was down high-teens for the quarter,” UBS said. UBS highlighted that Apple’s revenue recognition policies, recognizing revenue upon shipment, partially explain the “surprise” between shipment and sell-through data. In March, Apple shipments in China rose by 12% year-over-year, while sell-through declined by 13%. Additionally, Apple reduced iPhone channel inventory during the quarter, particularly in March. “In China, we estimate sell-through was a just few hundred thousand above sell-in, modestly reducing channel inventory in that market,” UBS added. UBS has a neutral rating on Apple with a 12-month price target of $190.

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AKAMAI REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS

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AKAMAI REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS PR Newswire CAMBRIDGE, Mass., May 9, 2024 First quarter revenue of $987 million, up 8% year-over-year and when adjusted for foreign exchange* Security and compute revenue represented 64% of total revenue in the first quarter and combined grew 22% year-over-year and when adjusted for foreign exchange* GAAP net income per diluted share of $1.11, up 79% year-over-year and up 81% when adjusted for foreign exchange*, and non-GAAP net income per diluted share* of $1.64, up 17% year-over-year and up 18% when adjusted for foreign exchange* Board of directors authorizes a new, three-year, $2.0 billion share repurchase program CAMBRIDGE, Mass., May 9, 2024 /PRNewswire/ — Akamai Technologies, Inc. (NASDAQ: AKAM), the cloud company that powers and protects life online, today reported financial results for the first quarter ended March 31, 2024. “We are pleased with our continuing execution on our long-term strategy to drive

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