Tech

Investors see Microsoft’s stock market value leaving Apple behind

Published

3 months ago

January 29, 2024

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Investors see Microsoft's stock market value leaving Apple behindv

Microsoft’s early lead in artificial intelligence has the software heavyweight’s stock market value poised to pull decisively ahead of Apple’s over the next five years, 13 institutional investors unanimously agreed ahead of the tech titans’ quarterly results this week.

Microsoft’s shares have surged 7% so far in 2024, recently sending its stock market value above $3 trillion and dethroning Apple as the world’s most valuable company.

As of Friday, the Redmond, Washington software maker’s market capitalization was a few billion dollars above Apple.

Asked which would be more valuable five years from now, all 13 investments strategists and portfolio managers consulted by Reuters last week said they expect Microsoft to outpace Apple.

Share prices and valuations could shift this week as Microsoft reports its quarterly results on Tuesday, followed by Apple on Thursday.

In the long term, though, all the investors consulted by Reuters said Microsoft’s recent successes in generative AI give it a powerful advantage over Apple.

Still, the race between Apple and Microsoft could turn into a race for second place, some said, citing the huge recent gains by Nvidia, whose chips have powered the AI revolution.

Microsoft made early investments in ChatGPT-maker OpenAI and is incorporating generative AI technology across its business. AI is likely to benefit Microsoft’s cloud-computing offerings as it competes with Amazon and Alphabet in that burgeoning market.

In its applications business, Outlook now offers users AI help composing emails.

Microsoft “has more levers to pull in the forms of Azure cloud, gaming, enterprise software, and of course, AI is the most compelling,” said King Lip, chief strategist at Baker Avenue Wealth Management. “Apple is most reliant on the iPhone, which is a mature market, and the company has yet to detail how it will compete in the AI arms race.”

Apple has been quietly incorporating AI into product functions, such as snapping better iPhone photos, but investors will want to hear more AI plans when the company reports its December quarter results.

They also will be watching China, where demand for iPhones has slumped due to a slow economic recovery from the COVID-19 pandemic and as a resurgent Huawei erodes the Cupertino, California company’s market share.

Apple starts sales of its Vision Pro mixed-reality headset in the U.S. on Friday, its most expensive bet in more than a decade.

Since Steve Jobs launched the iPhone in 2007, Apple’s stock has surged more than 4,300%, helping Apple eclipse Exxon Mobil in 2011 as Wall Street’s most valuable company and making it a cornerstone investment of portfolio managers trying to outperform the S&P 500.

With investors worried about soft demand for iPhones in China, Apple’s stock is flat so far in 2024, underperforming the S&P 500’s nearly 2.5% rise as well as the 7% surge in Microsoft shares this year.

Microsoft’s shares also rallied 57% rally in 2023 thanks to its lead in generative AI. Its stock is now trading at 33 times expected earnings, compared a forward PE of 28 for Apple and around 20 for the S&P 500, according to LSEG.

“These are quality growth companies … but in order to warrant these valuations, they need to continue to grow at aggressive clips. You’re going to need increases in productivity, and I think Microsoft is better poised than Apple to do so,” said Mike Dickson, head of research at Horizon Investments.

Fifty Wall Street analysts recommend buying Microsoft shares, while four analysts have neutral ratings and none recommend selling, according to LSEG data.

Apple has 26 positive analyst ratings and 12 neutral ratings, while two analysts recommend selling, including a downgrade to “underweight” by Barclays this month due to worries about “lackluster” iPhone sales.

Nvidia, now the most valuable chipmaker after its shares more than tripled last year, may also be a contender for the world’s most valuable company in the next few years, said Wayne Kaufman, Chief Market analyst at Phoenix Financial Services in New York.

After hitting record highs last week, Nvidia’s market capitalization reached over $1.5 trillion making it Wall Street’s fifth most valuable company, less than $200 billion behind Amazon.

“I have told our brokers and clients that Nvidia is like Microsoft in the early 90s and Intel in the early 80s,” Kaufman said.

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Tech

Kretinsky and Layani face off in battle for distressed IT firm Atos

Published

21 hours ago

May 7, 2024

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Kretinsky and Layani face off in battle for distressed IT firm Atos

Shares of Grayscale Bitcoin Trust jumped 2.4% on Monday after the exchange-traded fund (ETF) that tracks the price of bitcoin saw its first day of inflow since January.

The move marks a major milestone for GBTC, which has seen $17.46 billion in withdrawals since it converted from a trust to an easily tradable ETF in January, due to the higher fees it charges compared with rivals.

Some of the outflows were also tied to the wave of bankruptcies in the crypto industry, as companies that collapsed in the last two years pulled money out of the fund to repay their creditors.

GBTC saw inflows of $63 million on Friday, according to investment management firm Farside Investors. It currently manages $18.08 billion in assets, according to its website.

However, its position as the biggest spot bitcoin ETF by assets under management (AUM) has come under threat from BlackRock’s iShares Bitcoin Trust, which manages $16.91 billion, according to its website.

Grayscale said in March that it would seek approval from the Securities and Exchange Commission to spin off a portion of GBTC’s assets into a new, lower-fee Bitcoin Mini Trust. The company has yet to decide on the fees for the Mini Trust.

Spot bitcoin ETFs, which were approved by the SEC in January following a decade of rejection, provide investors with bitcoin exposure without the need to directly hold the cryptocurrency.

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Tech

China to build 100-mile-long hyperloop train line by 2035

Published

21 hours ago

May 7, 2024

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China to build 100-mile-long hyperloop train line by 2035

China’s top engineering and rail design experts have exciting news: they’re planning to build the country’s very first hyperloop train line!

This futuristic project will connect two bustling cities, Shanghai and Hangzhou, spanning a distance of 150km (about 93 miles).

What makes this project so special? Well, it’s all about speed! The hyperloop train will travel inside a special vacuum tunnel, allowing it to reach mind-blowing speeds of up to 1,000km/h (that’s about 621mph!).

Before choosing the Shanghai-Hangzhou route, the experts carefully evaluated several options.

They considered factors like economic potential, population density, and existing transport infrastructure. In the end, they decided that connecting Shanghai and Hangzhou would bring the most benefits to the region.

This project is a big deal for China, and it’s being led by some of the country’s top engineers and scientists.

They’re excited about the potential for this hyperloop train to revolutionize transportation and boost economic growth in the area.

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Tech

Scientists discover hidden planet buried under Earth’s surface

Published

21 hours ago

May 7, 2024

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Scientists discover hidden planet buried under Earth's surface

There’s all sorts of intriguing stuff hidden beneath the Earth’s surface, from massive oceans to water leaking directly into the planet’s core – the latest discovery, though, might be the most interesting of all.

New research has pointed to fascinating findings close to the Earth’s core which experts are claiming to be remains from an ancient planet.

The planet, named Theia, could have collided with our planet billions of years ago and evidence of this event is supposedly found within two blobs far beneath the surface.

These blobs have fascinated the scientific community since they were first discovered back in the 1980s. These structures are the size of entire continents and around twice the size of the moon.

They’re located beneath Africa and the Pacific Ocean, and due to the high iron content of these structures, seismic waves pass through them at a slower rate – leading to them being labelled “large low-velocity provinces” (LLVPs).

A study into these LLVPs was published at the end of 2023 in the journal Nature and featured new findings from Caltech researchers.

Most significantly, the study argues that these structures, which have divided opinion for decades, are actually the remains of Theia, which collided with Earth billions of years ago.

This collision caused the creation of the moon, and the new study argues that the planet was absorbed into the Earth and formed the LLVPs.

“Seismic images of Earth’s interior have revealed two continent-sized anomalies with low seismic velocities, known as the large low-velocity provinces (LLVPs), in the lowermost mantle,” researchers wrote.

“The LLVPs are often interpreted as intrinsically dense heterogeneities that are compositionally distinct from the surrounding mantle.”

They added: “Here we show that LLVPs may represent buried relics of Theia mantle material (TMM) that was preserved in proto-Earth’s mantle after the Moon-forming giant impact.

“Our canonical giant-impact simulations show that a fraction of Theia’s mantle could have been delivered to proto-Earth’s solid lower mantle.”

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