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Meta mojo is back: Earnings surprise sparks share surge, lifts Big Tech

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Meta mojo is back: Earnings surprise sparks share surge, lifts Big Tech

Meta Platforms Inc (META.O) shares rose nearly 20% in premarket trade after the Facebook owner floored Wall Street by slashing its spending forecast and boosting its stock buyback plan by $40 billion.

The company was set to add around $75 billion to its market value and would post its best day in a decade, if gains hold.

Meta stock surge also sparked a rally in shares of mega-caps Amazon.com (AMZN.O), Apple Inc (AAPL.O) and Alphabet Inc (GOOGL.O), all of which sport market values of more than $1 trillion and report earnings after market close.

Meta’s move on Wednesday to rein in costs was a dramatic shift for a company that has spent billions of dollars to turn its vision of the futuristic metaverse into a reality even while its core business reeled from stiff competition and a weak advertising market.

The results prompted at least 19 analysts to boost their price targets on the stock, with several saying that a combination of lower costs, upbeat revenue growth and share buybacks will drive up earnings per share.

“That is rare”, analysts at Evercorse ISI said, referring to the positive developments. “And stocks react to rare.”

The results also provided some relief to the market after an earnings meltdown at Snap Inc (SNAP.N) on Tuesday that had sent the tech sector’s shares lower.

“After Snap’s disaster, the fact that Meta wasn’t quite so bad has brought encouragement to tech mega-caps,” said Fiona Cincotta, analyst at City Index.
“There is also a less hawkish Fed which is also boosting demand for growth and tech stocks generally.”

‘YEAR OF EFFICIENCY’

Meta now expects its 2023 expenses between $89 billion and $95 billion, a sharp drop from its previous outlook of $94 billion to $100 billion, with CEO Mark Zuckerberg calling the period a “Year of Efficiency.”

The forecast reflects savings from the 11,000 job cuts it announced in November, plans for lower data-center construction expenses and moves to drop non-crucial projects.

“Promising that 2023 will be a year of efficiency was always likely to go down well with investors concerned about the largesse in spending directed towards the unproven potential of the metaverse,” said AJ Bell, investment director at Russ Mould.

There were also signs that Meta’s core social-media business was getting back on track, with monetization efficiency for short-form video Reels on Facebook doubling and the business being on track to break-even as soon as end of 2023.

The company, which forecast first-quarter revenue above market estimates, also said that Facebook’s daily active user base grew to 2 billion, from 1.98 billion in the prior quarter.

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Amazon’s AWS appeals to corporate customers with new chatbot, AI safety measures

Amazon’s AWS appeals to corporate customers with new chatbot, AI safety measures

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Amazon's AWS appeals to corporate customers with new chatbot, AI safety measures

Amazon (AMZN.O) is trying to lure big corporate customers to it AWS cloud computing service with a new chatbot for businesses, and by offering to guard them against legal and reputational damage that can come from the output of artificial intelligence.

The new chatbot, called Q, is designed to help with productivity by helping workers summarize important documents and support tickets and chat via communication apps such as Slack, the company announced at its annual cloud computing conference Tuesday in Las Vegas. The software can also automatically make changes to businesses source code, speeding development, the company said.

The new software arrives roughly a year after OpenAI’s ChatGPT burst onto the scene, setting off a frenzy of investment in generative AI startups. Alphabet (GOOGL.O) and others have announced their own chatbots, which can have human-like conversations with users to help with daily tasks.

AWS CEO Adam Selipsky, at Amazon’s annual cloud computing conference in Las Vegas, announced a new safeguard against objectionable content on generative AI applications, called Guardrails for Bedrock. The service allows users to filter out harmful content, he said.

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Because generative AI is trained on publicly available content, offensive words or other objectionable content can slip through into results from users’ prompts. That is particularly problematic for younger users, in times of global conflict or during elections when generative AI’s output in search results can influence opinion.

Safety advocates have cautioned that generative AI could operate out of the control of its human creators and pump out increasingly dangerous content or operate entire systems without oversight. In particular, they worry about the software putting influential – and convincing – content on social media sites like X and Facebook (META.O).

Selipsky said the new service was important for customers to put limits they see fit on the generative AI they use.

“For example, a bank could configure an online assistant to refrain from providing investment advice,” said Selipsky. “Or, to prevent inappropriate content, an e-commerce site could ensure that its online assistant doesn’t use hate speech or insults.”

As part of its appeal to corporations, Amazon said the Q chatbot will offer businesses limits so that it can keep sensitive data from employees who should not have access to it. Pricing will start at $20 per user, per year.

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Also at the conference, Amazon announced it would indemnify its customers against lawsuits based on the misuse of copyrighted materials. Stock photography company Getty Images, for instance, sued Stability AI earlier this year, alleging it scraped its website for images without permission.

Guardrails for Bedrock is in limited preview today, Amazon said. The Seattle company did not provide additional details about its indemnification policy. 

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TikTok obtaining Indonesia e-commerce permit

TikTok obtaining Indonesia e-commerce permit

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TikTok obtaining Indonesia e-commerce permit

Short video app TikTok is in the process of obtaining an e-commerce permit from Indonesia’s government, state news agency Antara reported, citing the deputy trade minister.

In September, Indonesia banned e-commerce transactions on social media, a major blow for TikTok, which had pledged to invest billions of dollars in Southeast Asia, including Indonesia, the region’s biggest economy.

“Before, they (TikTok) were not compliant, they didn’t have the permit. Now they are taking care of it,” deputy trade minister Jerry Sambuaga was quoted saying by Antara on Tuesday.

He said a partnership with a local firm could be done providing it was in accordance with regulations.

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TikTok, owned by China’s ByteDance, has 125 million active monthly users in Indonesia, a country of more than 270 million people. It has been looking to translate the large user base into a major e-commerce revenue source.

TikTok did not immediately respond to request for comment regarding the deputy minister’s remarks.

Reuters reported earlier this month that TikTok was in talks on possible partnerships with several Indonesian e-commerce companies, including GoTo’s e-commerce unit (GOTO.JK) Tokopedia, Bukalapak.com (BUKA.JK) and Blibli (BELI.JK). 

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Japan space agency hit with cyberattack, rocket and satellite info not accessed

Japan space agency hit with cyberattack, rocket and satellite info not accessed

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Japan space agency hit with cyberattack, rocket and satellite info not accessed

Japan’s space agency was hit with a cyberattack but the information the hackers accessed did not include anything important for rocket and satellite operations, a spokesperson said on Wednesday.

“There was a possibility of unauthorised access by exploiting the vulnerability of network equipment,” the spokesperson at Japan Aerospace Exploration Agency (JAXA) said, declining to elaborate on details such as when the attack took place.

The space agency learned of the possibility of the unauthorised access after receiving information from an external organisation and conducting an internal investigation, the spokesperson said, declining to identify the organisation’s name.

The investigation is ongoing, the spokesperson said.

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Japanese media reported Wednesday that the cyberattack occurred during the summer and the police became aware of the attack and notified JAXA this autumn. The Yomiuri newspaper first reported the incident. 

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