Aurelia Butler

Roku (NASDAQ:ROKU), which sells streaming devices and has its own free, ad-supported channel, has seen more people turn to its platform as major streamers such as Netflix (NASDAQ:NFLX) increased prices and economic uncertainty pressured consumer spending.But the company executives said Roku faces “difficult year-over-year growth rate comparisons within streaming service distribution activities. This headwind is due to past price increases and a higher mix shift toward ad-supported offerings”.Major streaming services, including Netflix, have in the past year focused on growing their more affordable, ad-supported offerings as they look to maintain subscriber growth in an uncertain economic environment.Still, Roku’s earnings for the January-March quarter and a second-quarter sales forecast that was above Street estimates showed the company was benefiting from strong ad sales and the ongoing shift to streaming from cable TV.The company posted net revenue of $881.5 million in the first quarter, compared with LSEG estimates of $848.6 million.Roku’s revenue from its platform segment, which includes digital ads and ad-free tier subscriptions, as well as from its streaming devices and TV each increased 19%.The company ended the first quarter with 81.6 million “streaming households” (active accounts), a net increase of 1.6 million from the previous quarter.”In an environment where engagement is at a premium, Roku continues to see strong growth in both the size of its base and amount of time spent on its platform,” said Jamie Lumley, senior analyst at Third Bridge.Roku forecast second-quarter revenue at $935 million, above analysts’ average estimate of $931.4 million. More

(Reuters) -Intel forecast second-quarter revenue and profit below market estimates on Thursday, sending its shares tumbling roughly 8% as it faces weak demand for its traditional data center and PC chips and trails in the surging market for AI components.Businesses have prioritized spending on advanced and speedy artificial intelligence server chips, hurting demand for Intel (NASDAQ:INTC)’s central processing units (CPUs), which have been the mainstay chip powering data centers for decades.Helped by its software, Nvidia (NASDAQ:NVDA) dominates the market for AI chips with its powerful graphics processing units (GPUs), and commanded roughly 80% share last year.Intel’s other largest market – PC chips – has suffered a difficult two years, but has shown signs of life at the beginning of 2024.While Intel lost $11 billion in stock market value following its results late on Thursday, Nvidia’s value grew by $40 billion, lifted by strong results from Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) as the two cloud heavyweights race to expand their AI product lineups.”Intel is still very much a ‘show me’ story. So I think when you get quarters where they don’t execute and they promise more at a future point, that there’s some skepticism around their ability to deliver,” said Matthew Bryson, an analyst at Wedbush.In addition to deploying Nvidia’s AI chips, Microsoft and Alphabet’s Google design in-house chips for their data centers.Intel’s Gaudi AI chips are likely to achieve more than $500 million in revenue this year, CEO Pat Gelsinger said in an interview. Intel launched its third generation Gaudi 3 processor in April in an effort to better compete with Nvidia.”What’s most exciting to me is enterprise (AI) customers,” Gelsinger said. “I think ultimately the monetization of AI is when it starts transforming enterprises.”Shares of the Santa Clara, California-based company fell to $32.35 in extended trading, their lowest since August. Rival Advanced Micro Devices (NASDAQ:AMD) forecast it would sell $3.5 billion worth of AI chips this year when it reported earnings in January. Shares of AMD, which also competes against Intel in PC processors, added 2.6% following Intel’s report.Despite a lackluster start to the year and its weak second-quarter forecast, Gelsinger said almost all of Intel’s products would rebound in the second half of 2024.”It’s a first-half, second-half story for the industry,” Gelsinger said. “We see essentially every business of Intel (fares) better in the second half of the year.”Nvidia’s GPUs dominate the AI market, as large and small companies have sought to acquire tens of billions of dollars worth of them. Surging demand and Nvidia’s limited supply of these advanced chips has left Intel and AMD with opportunities to take market share.Intel is optimistic about personal computer sales in the second half of the year because it anticipates a fresh PC upgrade cycle around a new version of Microsoft’s Windows operating system. The company also expects software vendors launching next generation products to help lift demand for PCs and Intel’s chips, Gelsinger said.But the supply of its most advanced PC chips has been limited by a bottleneck in its manufacturing process, executives said in the conference call.Intel expects second-quarter revenue of $12.5 billion to $13.5 billion, compared with analysts’ average estimate of $13.57 billion, LSEG data showed. Intel forecast second-quarter adjusted earnings of 10 cents per share, also below expectations.Total revenue of $12.72 billion in the first quarter marginally missed expectations of $12.78 billion. Sales at its data center business rose 5% to $3 billion during the period.Intel’s contract manufacturing business, or foundry, is working to catch up with industry leader TSMC, but profits remain years away. Revenue from the foundry business fell 10% in the first quarter.During the conference call on Thursday, Intel executives said its foundry business would see quarter-over-quarter improvement until 2030. The company disclosed foundry operating losses of $2.5 billion in the first quarter as part of its plans to report foundry operations as a standalone unit.Adjusted gross margin rose to 45.1% from 38.4% in the 2023 first quarter, beating analysts’ consensus estimate of 44.3%. More

(Reuters) – Alphabet (NASDAQ:GOOGL) announced its first-ever dividend on Thursday and a $70 billion stock buyback, cheering investors who sent the stock surging nearly 16% after the bell. The Google parent is returning capital while spending billions of dollars on data centers to catch up with rivals on generative artificial intelligence. The dividend will be 20 cents per share.Just three months ago, Alphabet’s Big Tech rival, Meta Platforms (NASDAQ:META), announced its own first-ever dividend, a move that lifted the social media company’s stock market value by $196 billion the following day. Amazon.com (NASDAQ:AMZN) remains the lone holdout among Big Tech firms not offering a dividend.Alphabet beat expectations for the quarter in sales, profit and advertising – metrics that are all closely watched. “Alphabet’s announced dividend payouts and buybacks on top of the solid earnings beat are not only a breath of fresh air for the tech market as a whole, but also a very intelligent strategy for the search engine giant going into a tough time of the year,” said Thomas Monteiro, senior analyst at Investing.com.Alphabet’s after-hours share surge of nearly 16% following the report increased its stock market value by about $300 billion to over $2 trillion. In a call to discuss results, CEO Sundar Pichai touted Google’s AI offerings as a boon to its core search results. “We are encouraged that we are seeing an increase in search usage among people who are using the AI overviews,” he said.Revenue was $80.54 billion for the quarter ended March 31, compared with estimates of $78.59 billion, according to LSEG data.The search firm’s beat on first-quarter revenue was powered by rising demand for its cloud services on the back of increasing adoption of artificial intelligence and steady advertising spending.Google reported advertising sales rose 13% in the quarter to $61.7 billion. That compares with the average estimate of $60.2 billion, according to LSEG data.Alphabet is coming off a fourth quarter in which ad sales missed the mark, sending shares tumbling, amid rising competition from Amazon.com, Facebook and new entrants like TikTok. The latter faces an uncertain future after President Joe Biden signed a bill that would ban the popular app if it is not sold within the next nine to 12 months. Meanwhile, Google Cloud revenue grew 28% in the first quarter, boosted by a boom in generative AI tools that rely on cloud services to deliver the technology to customers.Alphabet’s capital expenditures were $12 billion, a 91% rise from a year prior, a figure Gabelli Funds portfolio manager Hanna Howard called “higher than anticipated.” Still, CFO Ruth Porat said on the call with analysts that she expects such expenditures to be at that level or higher throughout the remainder of the year, as the company spends to build artificial-intelligence offerings. Despite the surge in capital expenditures, Porat said operating margin in 2024 would be higher than last year, without elaborating.Google’s cloud services are attractive for venture capital-backed startups developing generative AI technologies due to their pricing and ease of integration with other tools, investors and experts have previously said.Google has touted its AI-powered chatbot, Gemini, as a panacea for automation, from coding to document creation. The software was widely criticized, however, after it was found to generate historically inaccurate images, including of former U.S. leaders and World War Two-era German soldiers. Google has said it is aware of the issues and is working to address them. (This story has been refiled to fix the spelling of ‘buyback’ in paragraph 1) More