A pioneer of artificial intelligence said he quit Google to speak freely about the technology's dangers, after realising that computers could become smarter than people far sooner than he and other experts had expected.
Britain's Competition and Markets Authority (CMA) on Wednesday blocked Microsoft's $69 billion acquisition of 'Call of Duty' maker Activision Blizzard over concerns it would hinder cloud gaming.
The recently-reported earnings reflected the efforts taken by technology companies to cut down costs and streamline their operations as risks of a potential recession remain. While macro headwinds persist, many tech companies fared better than the Street’s expectations. Here, we used
TipRanks’ Stock Comparison Tool to place Meta Platforms (
NASDAQ:META
), Microsoft (
NASDAQ:MSFT
), and Amazon (
NASDAQ:AMZN
) against each other to pick the most attractive
tech stock at the current levels.
Meta Platforms (NASDAQ:META)
Social media giant Meta Platforms returned to growth in Q1 2023 after three straight quarters of revenue decline due to the macro pressures on digital ad spending.
Revenue increased 2.6% year-over-year to $28.6 billion, while
EPS declined 19% to $2.20. Both the metrics came ahead of the Street’s expectations.
The Q1 bottom line was impacted by $1.14 billion of restructuring charges related to the company’s efforts to streamline its operations and reduce costs, including severance and personnel costs related to layoffs.
While the company is cutting down costs in certain areas, it continues to build its
artificial intelligence (AI) capacity to support ads, Feed, and Reels, and invest in generative AI initiatives.
Is META Stock a Good Buy?
Last week, Guggenheim analyst
Michael Morris boosted his price target for Meta stock to $320 from $240 and reiterated a Buy rating.
Morris feels that while the focus was on the improved revenue trends in Q1, accelerated DAU (daily active users) growth driven by AI investments should boost investor confidence about Meta’s ability to “effectively compete with TikTok and other platforms for consumer engagement.”
Wall Street’s Strong Buy consensus rating for Meta Platforms is based on 41 Buys, five Holds, and three Sells. The average price target of $271.42 suggests 11.5% upside.
Shares have skyrocketed 102% since the start of this year.
Microsoft (NASDAQ:MSFT)
The buzz around Microsoft’s AI initiatives and
better-than-expected results for the fiscal third quarter have driven MSFT shares higher this year.
Q3 FY23 EPS increased 10% to $2.45, driven by a 7% rise in
revenue to $52.9 billion.
The top-line growth was driven by 16% growth in the Intelligent Cloud segment and an 11% growth in the Productivity and Business Processes division. However, weakness in the PC market hit the More Personal Computing segment. Revenue from Azure and other cloud services increased 27%, which came in better than analysts’ estimates but indicated a slowdown compared to Q2 FY23.
Meanwhile, Microsoft is upbeat about its AI initiatives and the growth potential of its AI-powered tools. The company launched its AI-powered Bing search engine and Edge browser in the quarter and disclosed
significant investments in ChatGPT-creator OpenAI.
What is the Price Target for MSFT Stock?
Last week, RBC Capital analyst
Rishi Jaluria increased the price target for
Microsoft stock to $350 from $285 and maintained a Buy rating.
Jaluria thinks that the company’s “surprisingly clean” beat-and-raise quarter should help address some concerns across software, including those around cloud saturation, given that AI is set to be the next growth avenue.
Overall, the Strong Buy consensus rating for Microsoft is based on 30 Buys, three Holds, and one Sell. The price target of $328.39 suggests 7.5% upside.
Shares have risen over 27% year-to-date.
Amazon (NASDAQ:AMZN)
E-commerce giant Amazon reported
better-than-projected results for the first quarter. However, investors were disappointed with the
management’s warning about a continued slowdown in the Amazon Web Services (AWS) cloud business. The high-margin AWS unit is considered to be a key growth driver.
Amazon’s Q1 2023
revenue grew 9% to $127.4 billion. The company generated an EPS of $0.31 compared to a loss of $0.38 in the prior-year quarter. AWS revenue increased about 16% to $21.4 billion but decelerated compared to the 20% and 28% growth witnessed in Q4 and Q3 2022, respectively. The impact of macro pressures on IT spending is weighing on the performance of AWS.
Nonetheless, the company is positive about the growth ahead, driven by its streamlining efforts and strategic initiatives in its retail, AWS, and advertising businesses.
Is Amazon Stock a Buy, Sell, or Hold?
Amazon’s Q1 results prompted Wedbush analyst
Michael Pachter to raise his price target to $129 from $125 and reiterate a Buy rating on April 28. Pachter feels that Amazon’s outlook was “far better than feared,” despite a slowdown in AWS.
The analyst believes that Amazon is well positioned to continue to deliver better-than-anticipated profitability once inflation is addressed and recession fears fade away. His optimism is backed by a favorable high-margin mix of AWS, growing advertising business, and third-party seller services.
The analyst highlighted that Amazon has displayed its ability to grow amid falling ad demand, tightening IT budgets, and slowing consumer spending through the performance of its AWS, ads, and subscriptions segments.
With 37 Buys and one Hold,
Amazon stock scores a Strong Buy consensus rating. The average price target of $137.20 suggests 34.4% upside.
Shares have advanced 21.5% since the start of this year.
Conclusion
While analysts are bullish on all the three tech stocks discussed here, they see more upside in Amazon from current levels. Despite the slowdown in Amazon’s cloud business over recent quarters, Wall Street continues to be optimistic about the long-term growth potential and dominant position of AWS. Moreover, they believe in the company’s ability to maintain its leadership in the e-commerce space and the prospects of the rapidly growing advertising business.
Aside from analysts, hedge funds are also bullish on Amazon and
increased their holdings by 17.3 million shares last quarter. As per TipRanks’ Hedge Fund Trading Activity Tool, hedge funds have a Very Positive confidence signal on Amazon.
Disclosure
Meta Platforms’ stock (NASDAQ: META) has gained 98% YTD, while the S&P500 is up only 8% over the same period. The stock price touched a 52-week low in the last quarter of 2022. However, it has seen a sharp recovery since then. It was because of several reasons, better t
International Business Machines Corp expects to pause hiring for roles as roughly 7,800 jobs could be replaced by Artificial Intelligence (AI) in the coming years, CEO Arvind Krishna told Bloomberg News on Monday.
U.S. stocks ended little changed on Monday as investors took in the weekend auction of First Republic Bank and braced for this week's expected interest rate hike from the Federal Reserve.
U.S. stocks ended little changed on Monday as investors took in the weekend auction of First Republic Bank and braced for another expected interest rate hike from the Federal Reserve this week.
Tech stocks were higher late Monday afternoon, with the Technology Select Sector SPDR Fund (XLK) edging up 0.1% and the Philadelphia Semiconductor index gaining 0.9%.
U.S. stocks were little changed Monday afternoon as investors were cautious heading into an expected interest rate hike this week by the Federal Reserve.
The S&P 500 and the Dow edged higher on Monday as JPMorgan rose after the bank said it will buy most of First Republic Bank's assets, while caution prevailed ahead of the Federal Reserve's policy decision later this week.
Looking at units outstanding versus one week prior within the universe of ETFs covered at ETF Channel, the biggest outflow was seen in the ProShares UltraPro QQQ, where 13,850,000 units were destroyed, or a 2.8% decrease week over week. Among the largest underlying components
The S&P 500 and the Dow edged higher as JPMorgan shares rose after the lender said it will buy most of First Republic Bank's assets, while investors refrained from making big bets ahead of the Federal Reserve's policy decision this week.
Microsoft's (NASDAQ: MSFT) stock recently popped after its latest earnings report beat analysts' expectations. Most of its growth was driven by the expansion of its cloud business, which grew revenue 22% year over year to $28.5 billion and accounted for over half of its top line
Microsoft (MSFT) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
U.S. stock index futures were muted on Monday as investors refrained from taking big bets ahead of the Federal Reserve's policy decision this week, while regulators said JPMorgan will buy most of the beleaguered First Republic Bank's assets.
Investors wanting to earn the maximum returns from artificial intelligence (AI) may look to small- or mid-cap stocks. Because they carry more risk than their large-cap brethren, they often hold the most growth potential.
The artificial intelligence (AI) revolution has the potential to disrupt industries on a larger scale than the PC and internet boom of the late 1990s and the smart phone surge in the 2000s. A safer investment bet lies in the AI development and infrastructure landscape, which encompasses hardware and software components such as GPUs, computer, [...]
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