Tag Archives: googl

Apple, Alphabet May Gain If Self-Driving Cars Are 4th Video Screen

Apple ( AAPL ) and Alphabet’s Google helped turn mobile phones into the “third screen” for video consumption, joining the living-room TV and personal computers. Self-driving cars could emerge as the fourth video screen, says Morgan Stanley. And if that happens, Alphabet ( GOOGL ) and Apple loom as Silicon Valley companies that could gain. A new Morgan Stanley research report explores the potential impact of autonomous (self-driving) cars along with the emergence of shared, on-demand Uber-type services on a wide range of industries. If consumers don’t need to watch the road while motoring, they’ll have more time to eyeball Internet content or mobile video. “The car is effectively the 4th screen for media content consumption after PCs, phones and TVs. In our view, this is what the Silicon Valley will be targeting by leveraging the (autonomous) utility,” said the report. “Silicon Valley is interested not only in the utility aspect but more importantly in the potential multitrillion-dollar opportunity selling data, content and experiences unfamiliar to today’s auto firms.” Tech companies loom as partners for new entrants or for traditional automakers. If the fourth-screen model proves accurate, Google could expand its advertising business to a new market. Apple’s services business stands to gain as well. “The automobile is being increasingly viewed as a potential smartphone on wheels,” said the Morgan Stanley analyst team. Apple reportedly is developing an electric car, with a target date of 2019. Google is testing autonomous vehicles in two cities. Competition is growing fast in the autonomous-car market. Tesla is pushing into autonomous vehicles, with Mobileye ’s ( MBLY ) help. Also in the self-driving car race are General Motors ( GM ), Ford ( F ) and other carmakers. GM is partnering with ride-sharing service Lyft. “Driving has long been seen as synonymous with personal freedom. But among the costs of this freedom is what we estimate to be approximately 400 billion hours of non-productive time gripping a steering wheel and trying to concentrate on the road ahead,” said the Morgan Stanley report. “What if the future of automotive transportation afforded consumers with all of the traditional benefits of personal freedom of mobility while using that precious hour per day for other activities?”

Intuitive Surgical Q1 Impresses Wall Street, As Stock Hits New High

Surgical-robot maker Intuitive Surgical ( ISRG ) received multiple price target hikes from Wall Street, as its stock hit a new high Wednesday, following its Q1 earnings report late Tuesday. As IBD reported, Intuitive Surgical’s Q1 earnings beat estimates , but what really interested analysts was the quarter’s 17% procedure growth. Intuitive Surgical normally sells only about 100 of its pricey da Vinci robotic systems per quarter, so surgical procedures using the company’s consumable accessories and services are key to steady revenue. Management raised procedure-growth guidance for the year to 12% to 14%, from the previous 9% to 12%. Operating expenses increased, and Intuitive Surgical’s management also raised its opex guidance for the year to 12% to 15% of revenue, up from 9% to 13% previously. However, it likewise raised its gross-margin guidance to 69% to 70%, from 68% to 69.5%. Intuitive Surgical is on IBD’s Big Cap 20. Who else makes the grade? “Intuitive Surgical’s impressive Q1 procedure growth is consistent with our recent positive general surgeon checks,” wrote RBC Capital Markets analyst Brandon Henry as he raised his price target to 640 from 610 while maintaining a sector perform rating. “While Intuitive Surgical is accelerating operating expense spend, we believe these investments should drive increased future robotics adoption and help the company maintain its superior position in the robotics market, despite upcoming competition.” The company has no competitors at present, but Medtronic ( MDT ), TransEnterix ( TRXC ) and Johnson & Johnson ( JNJ ) partnering with Alphabet ‘s ( GOOGL ) Verily division are all developing their own robotic surgery systems. Leerink analyst Richard Newitter lifted his Intuitive Surgical price target to 710 from 700 while maintaining an outperform rating. “A now stronger outlook for Urology/GYN and general surgery gave management confidence to raise ’16 procedure guidance,” Newitter wrote in his research note. “Also, management seems to be talking more aggressively about da Vinci use in thoracic, a procedure area we think may be around the corner as an emerging growth driver.” Piper Jaffray analyst Matt O’Brien raised his price target to 610 from 550. He rates the stock neutral. Intuitive Surgical stock hit a record high of 654.88 early on the stock market today , pushing it up 20% for the year. In morning trading, shares were up 4.5% near 652.

Yahoo Earnings Beat Despite Ongoing Challenges; Acquisition Near?

Yahoo ( YHOO ) stock opened higher Wednesday after the company late Tuesday assured investors it’s working diligently to find a buyer for its core, and perhaps other, businesses. Executives didn’t give any specifics, however, and its Q2 revenue outlook fell short of Wall Street estimates, as the Web company continues to cut costs. CFO Ken Goldman said the company’s headcount, including contractors, was down to 9,200, which it said is down 42% from the start of 2012. RBC Capital Markets analyst Mark Mahaney hiked his price target on Yahoo stock to 38 from 33, citing the rise of its Asian assets and his sum-of-its-parts analysis of the company. But he maintained his market perform rating on Yahoo stock. Most analysts maintained the equivalent of neutral ratings and maintained their price targets. Yahoo stock was up 2.5%, above 37, in early trading in the stock market today . “We are moving forward at the fastest possible pace,” Yahoo CEO Marissa Mayer said on the company’s earnings conference call last Tuesday. Verizon Communications ( VZ ), which bought AOL last year for $4.4 billion, is widely considered to be the front-runner for Yahoo’s core business. It’s uncertain what Yahoo will do with its 15% stake in China e-commerce leader Alibaba ( BABA ) or its big stake in Yahoo Japan. Late Tuesday, the Wall Street Journal reported that besides Verizon, bidders include U.K. publisher Daily Mail, buyout firm TPG and an investor group that included Bain Capital, Vista Equity Partners and former Yahoo interim CEO Ross Levinsohn. Mayer, then a top executive with Google (now part of Alphabet ( GOOGL )), was chosen over Levinsohn and others for the top spot at Yahoo in 2012. Private-equity firms, Silver Lake and Advent International also expressed interest in bidding, the WSJ said. Yahoo continues to attract more than 1 billion unique visitors a month to its online properties, long among the leaders on that score, but it’s spent a decade failing to spark much, if any, revenue growth. Yahoo Revenue Declines Accelerating For Q1, Yahoo said its earnings per share minus items fell 47% to 8 cents from 15 cents in Q1 2015, but analysts polled by Thomson Reuters had expected just 7 cents. Revenue fell 11% to $1.09 billion, just above the $1.08 billion that analysts had expected. For Q2, the company forecast revenue of $1.05 billion to $1.09 billion, down 14% at the midpoint and lagging consensus views of $1.102 billion. Facebook ( FB ) and Alphabet continue to gain in mobile and digital advertising at the expense of Yahoo and others. Cowen analyst John Blackledge, in a research note, pointed out the company posted a deceleration in mobile revenue growth and in growth for what its calls MAVENs, referring to the higher-growth areas of mobile, social, video and native advertising. He maintained a 32 price target on Yahoo stock. Yahoo did say MAVENs accounted for 38% of its total traffic-driven revenue, up from 33% in Q1 2015. William Blair analyst Ralph Schackart kept his market perform rating, citing “Yahoo’s weak core business fundamentals,” in a research note. “Yahoo’s search business continues to experience headwinds from declining desktop traffic, with paid clicks down 21% year over year in the first quarter after being down 10% last quarter,” Schackart wrote. “Further, search partnerships and increased affiliate traffic have caused traffic acquisition costs to grow at a faster rate than gross revenue, resulting in net search revenue declining 21% year over year in the first quarter.”