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Google Cloud Faces Amazon, Microsoft Over $25 Billion ‘Jump Ball’

With Alphabet ( GOOGL )-owned Google Cloud Platform snaring more major customers, there’s a three-company race between it,  Amazon ( AMZN ) Web Services and  Microsoft ( MSFT ) Azure that will only intensify. Cowen & Co. analyst John Blackledge wrote in a report on Thursday, after the first day of the Google Cloud Platform Next Conference in San Francisco, that “our sense from talking to potential customers at the event is that they are giving Google Cloud Platform another look.” Blackledge said press reports have highlighted “recent wins” for Google’s cloud business, including Spotify, Coca-Cola Enterprises ( CCE ) and Snapchat, which “were featured prominently in customer use-case discussions. Other customers include Home Depot ( HD ), Electronic Arts ( EA ), Zulily, Sony ( SNE ) Music, HTC, Best Buy ( BBY ), TiVo ( TIVO ), Wix ( WIX ), Philips ( PHG ), Volkswagen ‘s ( VLKAY ) Audi, (and Tata Group’s) Jaguar and Range Rover,” Blackledge said. Public clouds “are likely to be a highly competitive market where customer stickiness will be challenged by new technologies that make it easier to move workloads between public cloud vendors,” Macquarie Research analyst Ben Schachter wrote in industry research note on Wednesday. “It clearly has become a major focus area for Google and one in which it intends to compete directly against Amazon and Microsoft.” Competition between the three groups will rise “particularly as enterprises become increasingly comfortable migrating select workloads to public cloud environments,” according to Cloud Computing Today . Cloud services is “a $25 billion jump ball” that will likely be captured by the big three competitors: Alphabet’s Google Cloud Platform, Amazon’s AWS and Microsoft’s Azure, Pacific Crest Securities analyst Evan Wilson said in a Wednesday industry research note. “With it being early in this opportunity, we think there will be wins and losses along the way, but we believe (Google) will be a significant competitor in the years to come, and it could help drive growth.” Apple recently signed a contract worth between $400 million and $600 million to use Google’s Cloud Platform, according to CRN . Apple now uses cloud services from Amazon and Microsoft, but it intends to end its reliance on all its rivals in the next few years as it builds its own data centers, according to Re/Code. In February, music service Spotify, a high-profile customer of Amazon’s Amazon Web Services, said it would use  Google’s cloud for some computing infrastructure. Google’s cloud business generated about $500 million in revenues last year, according to analysts at Goldman Sachs, as cited by Reuters . That compares with $74.5 billion overall for parent company Alphabet, but the cloud business is one of its fastest-growing business areas. Overall, Reuters said Google ranks as the No. 4 player in the cloud infrastructure industry, with 4% of the market last year, according to Synergy Research. Amazon’s Amazon Web Services had a 31% share, Microsoft’s Azure had a 9% share, and IBM ( IBM ) had 7%, according to the group. Google is also building up its data centers across the world, launching two new regional centers in Japan and Oregon to bring the number of regions it serves to five. Cloud computing is an increasingly popular way for companies to run their IT operations, and the $20-billion-a-year business is forecast to grow 35% over the next year, according to Gartner Inc. Alphabet stock was down a fraction in late afternoon trading in the stock market today , near 755. Microsoft stock was up a fraction, near 54. Apple stock was down marginally, near 106, and Amazon stock was up more than 2%, near 581.

Taking Stock Of Tesla Motors, With Model 3 Launch A Week Away

The long-awaited Tesla Motors ( TSLA ) Model 3, hailed as an electric car for the masses, is due for its unveiling next Thursday, March 31. The company sent out invitations Thursday to prospective buyers to watch the livestream event at 8:30 p.m. Pacific Time at Tesla.com. Tesla said it will start taking reservations on the website at that time. But it said “a better spot in the queue” would come from just visiting a Tesla store when it opens on March 31, elaborating on a Tesla blog post earlier this week. Priced at $35,000 before incentives — half the cost of Tesla’s Model S and Model X — the Model 3 is meant to go up against the likes of the BMW 3 Series and other gas-powered entry-level luxury vehicles from Volkswagen ‘s ( VLKAY ) Audi and Daimler ‘s ( DDAIF ) Mercedes-Benz. It will also compete with hybrids from many makers, as well as General Motors ‘ ( GM ) planned Chevrolet Bolt EV, which is expected to get more than a 200-mile range between recharges and sell for $30,000 before incentives. The Model 3 will share the same design language with the Model X, including a “relatively larger windshield,” similar to what an  Apple ( AAPL ) Car “is also very likely to have,” said Global Equities Research analyst Trip Chowdhry in a research note last week. Apple hasn’t confirmed it’s working on any car, though it has hired several auto industry executives to work on a closely guarded project. How Does Tesla Motors Stock Look? Hopes for Tesla’s ability to build and sell a sizable number of Model 3s have helped push up Tesla’s market capitalization to five times the California startup’s annual revenue. How well the Model 3 does — along with whether Tesla can build it on time (starting in late 2017) and get battery costs low enough to make the car profitable — are key issues that investors will be watching. Tesla stock gets a low IBD Composite Rating of 27 out of a possible 99. The CR factors in a raft of metrics such as earnings growth, company and industry stock performance, and the degree of institutional buying. Fiat Chrysler Automobile ( FCAU ) is highest-rated in IBD’s Auto Manufacturers industry group, with a 55 CR, followed by Ford ( F ) at 51. The group itself is near the bottom in performance, ranking 182 out of 197 groups that IBD tracks. Tesla shares lifted more than 2% in afternoon trading on the stock market today , near 228. While the S&P 500 index has declined 1% so far this year, Tesla stock is down 6% after gaining 8% in 2015, jumping 48% in 2014, and rocketing 344% in 2013. What Are Analysts Saying About Tesla? Analysts on the whole are mildly positive on Tesla. Of 21 tracked by Thomson Reuters, five call it a strong buy, four a buy, and six rate it at hold or underperform. Analyst Chowdhry said in a research note that the silhouette of the Model 3 in Tesla’s event invitation “does not reveal much. … However, based on monitoring TSLA since 2009, Model 3 will be anything but ordinary … and as TSLA has done in the past, Model 3 will very likely push the auto industry back to the design board.” On Wednesday, S&P Global Market Intelligence analyst Efraim Levy cut his opinion “on these volatile shares to sell,” with Tesla now trading well above his 155 price target. “The shares have rallied sharply recently in anticipation of the Model 3 reveal later this month and amid bullish comments from some equity analysts. While we expect sales and EPS to surge in ’16, we see significant execution and valuation risk in the premium priced stock,” he wrote. Short-seller Citron Research, which expects supply and demand problems as Tesla tries to scale up production, recently targeted Tesla stock. The timing of the Model 3 concerns Karl Brauer, senior analyst at Kelley Blue Book, “because it’s at least a year after the Chevrolet Bolt arrives, and additional pure electrics with a similar range could easily show up by late 2017. These competitors will have full sales and service support in every state and major market, putting the pressure on Model 3 to keep up in this rapidly expanding market.” Several analysts have called Tesla years ahead of auto industry competition in electric vehicle design, giving it a continuing edge.

TiVo Jumps 21%: Rovi Merger Would Combine Intellectual Property In Pay TV

TiVo ( TIVO ) stock surged on reports the DVR pioneer is in talks to be acquired by Rovi ( ROVI ), a provider of interactive programming guides to pay-TV companies and smart-TV manufacturers. Shares in TiVo surged 21% in the stock market today  by midafternoon. Rovi stock fell 4%. Both TiVo and Rovi hold intellectual property for features built into pay-TV set-top boxes and garner licensing revenue. Rovi and TiVo face big changes among their customers as the pay-TV industry faces growing competition from Internet video providers, such as Netflix ( NFLX ), Alphabet -Google’s ( GOOGL ) YouTube as well as new TV hardware from Apple ( AAPL ) and Roku. Federal regulators aim to open up the set-top box TV market . TiVo shareholders would reportedly get cash and stock in the deal and own about 30% of the newly formed company. TiVo has expanded beyond hardware sales and patent licensing to online subscription services. TiVo’s customers include small and midsize pay-TV companies. Analysts have said TiVo aims to provide more cable firms with next-generation features, including its cloud platform and mobile apps, analysts say. Apple and Google have been among companies rumored to be interested in acquiring TiVo in the past. Rovi gets an IBD Composite Rating of 86 out of a possible 99, though today’s drop puts it below its key 50-day moving average. TiVo holds just a 26 Composite Rating. “Together, the combined TiVo and  Rovi entity would have more than 6,000 issued or pending patents,” said Mike McCormack, a Jefferies analyst, in a research report. “TiVo alone has generated around $1.6 billion of settlements to date from patent enforcement lawsuits vs. Dish Network ( DISH ), AT&T ( T ), Verizon ( VZ ), and Cisco-Motorola-Time Warner. There are 380 issued patents in TiVo’s portfolio, plus 340 pending patents, many of which expire beyond 2018.”