|Bid||1,097.73 x 900|
|Ask||1,097.89 x 800|
|Day's Range||1,096.03 - 1,109.43|
|52 Week Range||977.66 - 1,296.97|
|Beta (3Y Monthly)||1.18|
|PE Ratio (TTM)||27.51|
|Earnings Date||Jul 22, 2019 - Jul 26, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||1,336.80|
Today, as a part ofGooge's educational announcements at ISTE 2019, the company officiallylaunched the App Hub with content from Epic!, Adode, Khan Academy, and others
Big tech is under the microscope, now that U.S. regulators investigate whether Amazon (AMZN), Apple (AAPL), Facebook (FB), and Google (GOOG) have too much power. As calls for breaking up these tech titans gain momentum among lawmakers, at least one Silicon Valley insider says “trust” is at the crux of the increased scrutiny. “I think regulators are really responding to a crisis of trust in the tech industry,” Salesforce (CRM) President, Bret Taylor, tells Yahoo Finance’s The First Trade.
Makeup tutorials and reviews are some of the most popular content on YouTube,as they help people learn about new products as well as how to apply them
(Bloomberg) -- Of the five biggest tech companies in the U.S., Microsoft is the only one that isn't currently in the crosshairs of U.S. antitrust authorities. The software giant already took its turn through the regulatory wringer starting two decades ago, a years-long confrontation that resulted in the finding that the Redmond, Washington-based company had illegally maintained its monopoly for personal-computer operating-system software. The case dealt with the company's moves to kneecap the Netscape web browser by bundling its own product, Internet Explorer, into Windows, the dominant PC operating system.A federal judge ordered the company split in two in 2000, a fate Microsoft avoided when an appeals court reversed that part of the ruling and the company eventually settled. That 2002 settlement led to nine years of court supervision of the company's business practices and required Microsoft to give the top 20 computer makers identical contract terms for licensing Windows, and gave computer makers greater freedom to promote non-Microsoft products like browsers and media-playing software. Because observers and legal pundits almost uniformly agree the software giant did virtually everything wrong in the course of the investigation -- which had its start as early as 1990, followed by a 1998 Justice Department lawsuit -- in retrospect its story serves as a useful instruction manual of what not to do.While no formal inquiries have yet been opened, the Federal Trade Commission and Justice Department carved up the territory of big tech -- Amazon.com Inc., Apple Inc., Alphabet Inc.’s Google and Facebook Inc. -- as they prepare to dig in on antitrust issues. The Department of Justice will look at Google, which dominates the online search and advertising spaces, and Apple, whose pervasive App Store is likely to be under examination. The FTC drew Facebook, with its behemoth social networking and messaging apps and a slew of recent privacy missteps, and e-commerce giant Amazon, which has been pushing into areas like grocery and health. As these companies build their legal teams and prepare strategies for the fight ahead, here are several lessons that Google, Amazon, Apple and Facebook can learn from Microsoft's battle with the feds.Don't deny the obvious. Or don't even put up a fight about whether you have a monopoly. Microsoft, whose Windows software accounted for about 90% of the market for PC operating systems, opted to argue that the space was actually competitive. Parts of the argument included videos where Microsoft employees offered a straight-faced marketing pitch for the benefits of rival Linux programs with a tiny share of the market. The impulse is understandable -- monopoly sounds like a dirty word. But U.S. antitrust law doesn't expressly forbid having a monopoly; it outlaws doing certain things to establish, maintain or extend one. That led some legal scholars to argue that Microsoft would have been better served by copping to the Windows monopoly and establishing a legal beachhead against the idea that it did anything illegal to gain it or keep it. Arguing against something so self-evident via the company's very first witness strained credibility and started the case off on a bad footing.It's easy to imagine a similar issue applying to Google, which has more than 84% of the web-search market and controls 82% of mobile-phone operating systems. In the app-store business, Google and iPhone maker Apple together control more than 95% of all U.S. mobile app spending by consumers, according to Sensor Tower data. It could be more effective for these companies not to start by denying that leadership position -- if you have 80% or 90% percent of a market, arguing that you don't really dominate isn't the hill you want your legal reasoning to die on. Don’t resort to spin. Microsoft's credibility with the press was no higher, hurt by constant counterfactual statements and spin. Each day, after a bruising in court as government lawyer David Boies poked holes in executive testimony and Judge Thomas Penfield Jackson alternated between chuckling at the witnesses and chastising them, Microsoft deployed a hapless PR person to the steps of the courthouse to recite the words, "Today was another good day for Microsoft." It never was. Assume everything will be made public.Among the list of horrifying moments for Microsoft in court was the public showing of parts of the 20 hours of depositions of co-founder and Chief Executive Officer Bill Gates. The tapes (yes, they were tapes -- this was the 90s) showed an ill-lit, evasive and combative Gates engaging in Clintonian word-wrangling, such as asking about the definition of the word "definition" and arguing what "market share" meant. Microsoft claimed it had been assured the tapes would never be shown in court, or the company would have taken greater care with Gates’s appearance and manner. During their playback in court, the judge laughed at several points -- not the impression the software giant wanted to make on either Jackson or the public. Jackson told New Yorker reporter Ken Auletta that Gates came off as "arrogant" in the depositions.Just as bad for Microsoft, an array of internal emails were read aloud in court that contradicted the testimony of its executives, which further angered Jackson. The takeaway? Assume everything will be aired in the court of public opinion. If it was true 20 years ago, it’s even more apparent in the current era of oversharing, thanks to the tech companies’ own services. Don't be condescending about the technology. Most lawyers, judges and regulators don't appreciate being told or having it implied that they lack the ability to apprehend certain tech concepts. Or that the reason they think there's been an antitrust violation is because they just don't "get" the technology. It was true that Jackson and Boies seldom used a computer at the time. But it didn't require a computer science doctorate to divine the legal merits of the case. At the height of Microsoft's hubris (or carelessness, or both), the company sent Windows chief Jim Allchin to the stand with a doctored video that purported to show how computing performance would be degraded when the browser was removed from Windows on a single PC. It was actually done on several different computers and was an illustration of what might happen rather than a factual test, as the company initially claimed -- a fact that came to light only after several days of the government picking through every inconsistency in the video. Microsoft remade the simulation several times in an effort to save the testimony. The company seemed to think it could get away with baldy stating a technological claim and mocking up something that backed it up, perhaps reasoning that no one would know the difference, but it miscalculated badly (Joe Nocera, now a Bloomberg columnist but then writing for Fortune, recounts the whole cringeworthy story).Choose your lawyers wisely.Microsoft took on the U.S. government led by a combative Gates and an equally aggressive general counsel, Bill Neukom. Gates, the son of an attorney, was outraged, frustrated and convinced the company was being unfairly targeted. One of the company’s outside lawyers, from the firm Sullivan & Cromwell, said the company could put a ham sandwich into Windows if it wanted to. And throughout, Neukom not only failed to tamp down his executives’ worst impulses, he seemed to amp them up. His legal style led observers to point out that his last name -- pronounced `nuke 'em’ -- was quite fitting.The U.S. government’s latest antitrust targets should take heed: If your top executive's style tends towards waving a red flag in front of a bull, you may be wise to consider a top lawyer with a more conciliatory style. Google’s top executives have already raised the ire of lawmakers for refusing to appear before Congress, and no one has ever accused Jeff Bezos of being afraid of a fight. At Facebook, where Zuckerberg regards Gates as a mentor and observers see similarities in their styles and temperaments, this lesson might be particularly important.There are many different ways to lose.Right now, the companies are only at risk of an inquiry -- the agencies are deciding what, if any, action to take. But even at this stage, they should keep in mind that a loss doesn’t only mean a full-scale breakup or forced divestiture. Companies can avoid that extreme fate and still find, as Microsoft did, that the years of distraction from the fight have hampered their business and sucked up executive time and mental energy.In an interview last year at the Code Conference, Microsoft President and Chief Legal Officer Brad Smith lamented the distraction the case caused, and cited it as a reason the company missed out on the search market -- the business that fueled the runaway success of Google, now under the microscope itself. Others have pinned Microsoft’s abysmal performance in mobile computing partially on constraints and distractions from the case. Some of the company’s business missteps can fairly be attributed to poor execution and strategic errors that had nothing to do with the government dispute. Still, the notion that merely fighting an antitrust battle may do almost as much harm as losing one brings us to our last point.Consider settling early. It's hard to say with certainty what the late 1990s and early 2000s might have looked like for Microsoft had it found a way to settle with the government earlier than 2002. Still, for the government’s current targets, it's worth weighing a settlement against the impact of several years of investigation, a possible loss in court and potentially harsher restrictions or remedies. Amazon, Apple, Facebook and Google probably have a pretty good idea of what regulators may object to, and it’s worthwhile for them to consider ways to assuage those concerns while keeping the core of their businesses and future ambitions intact. The alternative is years of investigations, possibly damaging evidence and testimony, and ample distraction, all leading up to what could be a devastating loss in court. (Corrects to show that ham sandwich comment was made by a Microsoft outside lawyer.)To contact the author of this story: Dina Bass in Seattle at firstname.lastname@example.orgTo contact the editor responsible for this story: Jillian Ward at email@example.com, Mark MilianFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Google workers, shareholders and activists used the annual meeting of parent Alphabet Inc. to protest a range of issues, including contractor rights and the tech giant’s business in China.Shareholders filed proposals asking Alphabet management to scrap non-compete agreements, claw back compensation from executives who were found to have harassed employees and put an employee representative on its board.Several activist groups, sometimes in conjunction with Google employees, were planning protests outside the meeting and at company offices around the world. Topics include diversity, ethics around product launches, housing affordability and working conditions for temporary and contract staff.Tibetan, Uighur and Chinese rights activists called on Google management to clearly confirm the company will not re-establish business relations with China, citing what they said is the government’s mass cybersurveillance and human rights abuses.Chief Executive Officer Sundar Pichai said the company’s huge scale comes with a “deep sense of responsibility to create things that improve people’s lives” and benefit society as a whole. Executive Chairman John Hennessy said Alphabet’s board of directors is making sure the company focuses on diversity, sustainability and societal impact. “We are deeply committed to do the right thing on these issues,” he said.This is the latest flare-up in a roughly two-year effort by some Google employees and outside activists to push the company to be more accountable to workers, stockholders and the communities where it operates.Listen to a Google insider’s account of the protests from Bloomberg’s Decrypted podcast.Google has a famously open work culture, where employees of all levels are encouraged to speak their mind and suggest changes to company policy. That’s created some headaches for the tech giant. Google shelved a plan to build a censored search engine for China after news of the project leaked and employees rebelled against it. The company also stepped back from one military contract and stopped forcing employees to sign away their right to bring claims against it in court.Google’s critics only have so much power though. Shareholder proposals like the ones advanced at the annual meeting are almost always rejected because the company’s founders control the majority of the votes through special shares.(Updates with comments from Google executives in the fifth paragraph.)To contact the reporter on this story: Gerrit De Vynck in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Alistair Barr, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The single largest commitment by a private employer to address the Bay Area’s acute affordable housing crisis is also unique in its focus on land redevelopment.
The social media giant on Tuesday unveiled Libra, a global payments system based on blockchain technology. When it launches next year, Facebook's gated community of two billion-plus members worldwide will soon have its own currency. Many technology companies tout their scale.
(Bloomberg Opinion) -- YouTube’s latest attempt to crack down on hate speech has produced significant collateral damage. Policies designed to limit the spread of holocaust denialism wound up censoring videos that attacked denialism; a history teacher who dedicated his life to chronicling Nazi abuses found himself banned.These errors were more than just predictable, and they are more than just the latest illustration of the difficulty of applying the standards and practices of old media to new media. What they show is the fundamental difference between a social media company and a media company.Society expects major publishers to censor odious views, and there can be little doubt that companies such as YouTube and Facebook are major publishers. Yet professional censorship depends on a publisher’s control of the production of content. The system doesn’t work in a world of user-created content.YouTube’s crackdown was spurred by a campaign from Carlos Maza, a journalist at Vox Media, against Steven Crowder, a YouTube “shock jock” who persistently directed homophobic and racist slurs at Maza. YouTube issued a serious of confused and contradictory responses that ultimately resulted in a new policy banning any videos “alleging that a group is superior in order to justify discrimination, segregation or exclusion.”That rule seems innocuous enough. But Crowder’s misconduct took the form of mockery and condescension, tools of subversion often used by marginalized groups against the privileged or powerful. More to the point in this current dispute: Efforts to educate each successive generation on the horrors of Nazism will necessarily involve exposure to its worst vitriol.Thus publishers will have to make distinctions — between spiteful and subversive rhetoric, between incitement and education. These are the kind of decisions that traditional publishers, those in control of their own editorial content, have always been expected to make (and mostly do).Now consider YouTube, which releases about 500 hours of content every minute, the vast majority of which is ignored. A small fraction, as determined largely by user engagement, is elevated to a mass audience. As a publisher, then, YouTube is not only depending on its users for its content, it is depending on them to help decide which content other users see. In newspaper terms, the user is both reporter and editor.This system is not without costs. Yet it is also essential to the massive democratization of video content that YouTube has empowered. Content that might have struck traditional editors as trivial, controversial or just plain weird can, if given the opportunity, strike a chord with millions of users and move into the mainstream.The psychologist Jordan Peterson, for example, first found fame with a contentious denunciation of Ontario’s hate speech laws. He won legions of fans, however, with his voluminous collection of YouTube videos on self-help and biblical interpretation. Now a bestselling author, Peterson has given lectures about self-improvement to audiences around the world.This is the great genius and flaw of YouTube: It publishes a wildly eccentric and sometimes belligerent psychology professor that a sophisticated human editor might ignore. It also employs sophisticated algorithms that could still label an anti-Nazi documentary as hate speech.The only solution is for YouTube to become a truly open platform. As much as possible, it should train both its humans and machines to err on the side of publication. If it is going to establish some principles for what it allows, as Felix Salmon and others suggest, they should be very permissive.That doesn’t mean YouTube can’t fight genuine harassment, which often comes from consumers rather than producers of content. For one, it can take technological steps to limit its harm, such as making aggressive blocking software available to keep comments from reaching those who don’t want to see them. It should also work with law enforcement to pursue serious threats that move offline and into the real world. It’s not always easy to draw that line, but with time it will get easier.These are admittedly imperfect solutions. Those are usually the only kind at first when a new technology comes along and disrupts old ways of doing things. What works for the news media won’t work for social media. Whatever the solution, however, the goal should be to reduce harms while protecting benefits. On that score, some degree of vile and offensive online speech may be a cost we have to manage in order to have a free and digitally democratized society.To contact the author of this story: Karl W. Smith at firstname.lastname@example.orgTo contact the editor responsible for this story: Michael Newman at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Karl W. Smith is a former assistant professor of economics at the University of North Carolina's school of government and founder of the blog Modeled Behavior.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Wedbush says a breakup of these tech giants is unlikely. But changes along those lines could be a catalyst for innovation.
Facebook Inc. and Apple Inc. are most at risk if government regulators are serious about pursuing antitrust actions against Big Tech.
Slack Technologies Inc. is looking for a better direct-listing fate than Spotify Technology SA. The music-streaming service reminded tech unicorns late last year that companies don’t have to issue new shares or raise money through a traditional offering if they wish to go public, and now Slack is following in its footsteps. The business-chat company has filed direct-listing paperwork.
Apple (NASDAQ:AAPL) continues to face uncertainty about its future. Apple stock plunged in May as the government threatened to take antitrust action against Apple and mega tech peers such as Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG), Amazon (NASDAQ:AMZN), and Facebook (NASDAQ:FB).Source: Apple The stock has mostly recovered from that threat. However, AAPL still trades at almost 17% below its 52-week high as the company faces a need for new growth engines.Until it can find a more defined direction, investors should wait for a pullback before buying Apple stock.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 5 Stocks to Buy for $20 or Less A Closer Look at AppleFirst of all, I still expect AAPL stock to perform well long-term. It trades at a price-to-earnings (PE) ratio of about 16.2. That only comes in slightly above the five-year average PE for Apple of about 15.5. Once the predicted double-digit earnings growth resumes next year, the stock should resume its growth.However, the present appears less rosy. Profit forecasts fell last year. As a result, Wall Street predicts earnings will fall by 3.9% for fiscal 2019. The iPhone, which had made up a majority of the company's revenues in recent years, now appears destined for a permanent decline. The company has turned to other initiatives, such as the Apple Card and the Apple TV Streaming Service.Apple holds enough cash to compete with the largest banks, Netflix (NASDAQ:NFLX), or most any titan in any industry. As long as these business lines earn a profit, it should serve a specific group of AAPL stock investors well.It will help the kind of investors who want low-double-digit growth, an annual dividend increase, and a steadily rising stock price, AAPL should accomplish that.Even better, that stands as the likely worst-case scenario. As Dana Blankenhorn mentioned, Apple's embracing innovation by fashioning the Apple Watch as a medical device. If it offers the heart and diabetes monitoring which many hope could become the company's next great revenue driver. Wait for More Bad NewsInvestors should wait for bad news like the recent antitrust probe into the company. This took the Apple stock price to a low of around $170 per share in early June.Investors should remember that the company pledged to spend $75 billion on stock buybacks this year. Perhaps that helped to foster a recovery in AAPL. However, with AAPL rising to over $194 per share in just two weeks, they missed that one opportunity.Still, traders should not fret over this missed opportunity. For one, if the antitrust talk heats up again, AAPL stock will likely fall. Moreover, the state of Apple will remain in uncertainty until one of its new lines of business begins to drive revenue growth. Hence, any news that drives uncertainty or an economic downturn could have Apple stock selling at sale prices. The bottom line on AAPL stockAAPL stock remains a long-term buy, but investors should wait for bad news before adding to positions. Right now, Apple bears have focused on possible antitrust action or the drop in iPhone sales. Investors continue to wait as Apple scrambles to develop revenue sources which will bring earnings growth back to the company.However, Apple continues to enter into established industries. That by itself will drive some level of growth that will please more conservative investors.Additionally, if Apple can find success in its medical device applications, it not only ensures the long-term success of AAPL stock, but it also brings innovation to a company that has not introduced any significant original products since the passing of Steve Jobs.In the meantime, significant pullbacks should allow investors to buy AAPL stock at a sale price. With a little patience, investors can then benefit finds the next success that further enriches Apple investors.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 5 Red-Hot IPO Stocks to Buy for the Long Run * 5 Stocks to Buy for $20 or Less * 4 Dow Jones Stocks Ready to Rise Compare Brokers The post Apple Stock Is Due Another Pullback, Which Is Your Chance to Buy appeared first on InvestorPlace.
(Bloomberg) -- Walmart Inc. came to dominate retailing through its mastery of logistics—the complicated choreography of getting goods from farm or factory to the consumer. But even the world’s biggest store doesn’t make money selling its wares online in the U.S., largely due to runaway shipping costs. So Walmart is turning to robots.On a drizzly morning earlier this month, Walmart’s U.S. chief Greg Foran led reporters to a curbside package pickup kiosk outside its supercenter in Rogers, Arkansas. Idling there were three Ford delivery vans outfitted with self-driving technology developed by a Gatik, a Silicon Valley startup charged with a trial run aimed at cutting Walmart’s middle-mile shipping costs in half. Going driverless in pursuit of profit is a “no-brainer,” Foran said.As the buzz about human-carting robo-taxis starts to short-circuit, an unheralded segment of the driverless future is taking shape and showing promise: goods-moving robo-vans. Rather than serving up hot pizza pies or deploying headless robots to carry groceries to the doorstep, robo-vans travel on fixed routes from warehouse to warehouse or to a smaller pickup point, transporting packages to get them closer, but not all the way, to consumers.This may be the least glamorous part of the driverless delivery business, but the market for these monotonous “middle miles” could reach $1 trillion and may provide the fastest path to prosperity, analysts say.“This area has the least number of obstacles and the most certain return on invested capital in the near term,” said Mike Ramsey, an analyst with consultant Gartner Inc. “If you’re looking to start a business where you can actually generate revenue, this has fewer barriers than the taxi market.”Driving the demand is the boom in online shopping that has helped cause a severe shortage of truck drivers that tops 60,000 unfilled long-haul positions, according the American Trucking Associations. That has sent costs soaring for a job that is among the most dangerous due to the risk of wrecks and long periods spent on the road.Related: `Smokey and the Bandit' Charm Fades as Trucking Hiring Lags“This middle mile is the most expensive part of the whole supply chain; it’s a huge pain point,” said Gautam Narang, CEO of Gatik, which is attempting to automate Walmart’s “hub and spoke” warehouse system. “This fills a big gap in the market.”From a technological standpoint, business-to-business, or B2B, delivery is the straightforward counterpoint to the complexities of autonomous ride-hailing and driverless delivery directly to consumers, known as B2C or last-mile. Robo-vans like those being put to the test at Walmart follow fixed routes over and over, reducing the chance of mishaps and increasing their time in service generating revenue. Many of these routes are already established using human drivers today, so there’s little need to map new paths and create infrastructure to load and receive the goods.Related: Robot Rides Are Going to Deliver Pizza and Parcels Before PeopleFord Motor Co., testing many forms of driverless delivery, calls these repeatable routes “milk runs,” a throwback term to the days of household dairy delivery.“Anything on driverless delivery that is a milk run is a good application for autonomy,” said Sherif Marakby, chief executive officer of Ford’s autonomous vehicles unit. “B2C is a complex implementation for autonomy that will come with time, but B2B just makes it easier because you get volume and you can be more predictable.”The case for robots ferrying packages before people is becoming more compelling as robo-taxis struggle to gain traction. Consumers have grown wary of giving up the wheel, especially after a pedestrian was killed last year by an autonomous Uber Technologies Inc. test car. Waymo, Alphabet Inc.’s driverless unit, initiated limited automated ride-hailing in suburban Phoenix late last year with human “safety drivers” on board. General Motors Co. no longer says it will debut a similar service this year. Instead, CEO Mary Barra now says the rollout will be “gated by safety.”QuicktakeWhen the Driverless Cars Arrive, Will You Climb In?: QuickTakeDriverless delivery also has another big advantage over robo-taxis: no demanding human passengers. “People have more emotions than boxes,” Ford’s Marakby said.Meanwhile, driverless delivery is already hitting the road. Swedish startup Einride recently began low-speed robo-deliveries on public roads in its home country. It has signed up several Fortune 500 clients, like tire-maker Michelin, plus logistics service provider DB Schenker and German grocer Lidl.Looking like a Star Wars Imperial troop transport on wheels, Einride’s T-Pod trucks are 60% cheaper to build because they lack a passenger compartment. If they get into a jam, they can be remote controlled by humans from a command center. One human monitors the remote controls for 10 trucks. The T-Pods operate in self-driving mode 95% of the time, according to CEO and founder Robert Falck.Stuffed with payload and no human driver, a T-Pod can operate around the clock and cut shipping costs in half. That’s why Falck says his company is already profitable, though he declines to give specifics.“There are solid economics behind this and that’s also what the customer realizes,” Falck said. “If you break down the numbers, it’s the best business case out there.”TuSimple, a San Diego startup valued at $1.1 billion, leads a pack of tech outfits seeking to automate long-haul trucking. The company has a fleet of 50 robot Peterbilt and Navistar trucks that have been transporting commercial loads in Arizona for a year. And while it isn’t profitable yet, it expects to book revenue of more than $1 million a month in the second half of the year.“If you break down the numbers, it’s the best business case out there.”In the final two weeks of May, its self-driving big rigs—equipped with cameras that can see more than a half-mile down the road—completed 10 test runs for the U.S. Postal Service of an arduous 1,000-mile stretch from Phoenix to Dallas. Over Memorial Day weekend, the trucks faced howling crosswinds and “mud rain,” a blinding combination of dust, wind and rain. And yet the robo-rigs consistently beat human-driven trucks to the mail depot by as much as two hours. “We were approaching the edge of our operational design domain,” said Chuck Price, TuSimple’s chief product officer. “But we were able to demonstrate that we can do it much faster, with high consistency and high reliability. So bottom line, it’s more efficient.”By next year, TuSimple says it will pull the safety driver and engineer it currently has babysitting its rigs and go fully driverless—something no robo-taxi has committed to yet. By 2023 or 2024, the company plans to have “commercially ready” robo-rigs rolling out of a factory of a major truck maker.That kind of confidence is hard to come by these days among the purveyors of robo-taxis, still struggling to figure out how to navigate the pedestrians, cyclists and unpredictable traffic of chaotic urban environments. Increasingly, the call of the open road and the mundane middle miles between warehouses is proving to be the clearest path to the autonomous future. That’s why big players like Waymo and Tesla Inc.—still working on driverless people haulers—are also developing robo-rigs.“There’s absolutely a market for this sort of thing,” said Sam Abuelsamid, an analyst with Navigant Research. “People don’t really care much about what goes on behind the scenes to get them the products they want. But the value of all the goods being moved is far more than ride-hailing applications.”To contact the authors of this story: Keith Naughton in Southfield at firstname.lastname@example.orgMatthew Boyle in New York at email@example.comTo contact the editor responsible for this story: Anne Riley Moffat at firstname.lastname@example.org, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Subsidiaries of the parent of Google have invested in the cloud-based security software firm since 2015. After CrowdStrike’s IPO last week, Alphabet’s investment is now worth 13 times what it paid.
(Bloomberg Opinion) -- Slack Technologies Inc. couldn’t have picked a better time to go public. Investors have lost their minds about software companies.Earlier this year, I wrote about how stock buyers were willing to pay handsomely to own shares of fast-growing companies that sell cloud software to businesses. As investors had grown antsy about the FAANGs — the elite technology superpowers such as Apple Inc. and Google parent company Alphabet Inc. — the software PUTIN stocks, as I semi-apologetically called them,(1)were ascendant. Since then, investors have warmly greeted new stock listings by even more business software firms including Zoom Video Communications Inc., Pagerduty Inc. and CrowdStrike Holdings Inc.I went back to my self-selected cohort of 17 business software firms that included Salesforce, Adobe, Atlassian and ServiceNow. The median stock multiple of my cohort, which I had to adjust slightly because of acquisitions, didn’t budge much since the February analysis.The median market value adjusted for cash and debt was about 10.3 times a blend of revenue estimated in the next year, compared with 9.8 times in February. The price-to-earnings multiple of the S&P 500 index has also increased since then.(5) What really stood out was the top-tier companies in my PUTIN index have grown even more bubbly.Look behind the velvet rope to find the 20x Club, the most popular hot spot in stock markets. More than half a dozen software firms now have enterprise values that are more than 20 times expected revenue in the next year, according to Bloomberg data.That is — to put it mildly — not normal. Relative to revenue, buying a share of pharmaceutical software firm Veeva Systems Inc., a member of the 20x Club, is four times the price of Alphabet, one of the dominant companies of this generation. Some of the members of the 20x Club are newly public, and it’s not unusual to see young companies with stock market values that are a bit out of whack. But 20x Club members also include Veeva, Atlassian Corp., Okta Inc., MongoDB and other companies that have been public for 18 months or more. As corporate-messaging service Slack plans to list its shares Thursday in a not-IPO,(2)it may join this elite crew. A valuation for Slack of $17 billion or so would work out to an enterprise value to forward revenue in the ballpark of the 20x Club.There are understandable reasons these business software firms, which are relatively unknown by normal humans, have become darlings of the stock market and technology investing. Something real and seemingly permanent is changing in how companies large and small buy technology. Companies are desperate to modernize their technology so they don’t get left behind and can take advantage of growth opportunities, and that has made them open their wallets to buy new types of internet-friendly, easy-to-use software that promises to help make their marketing spending more efficient, catch cyberattacks before they cripple systems or enable seamless communications among far-flung employees.I’m not yet convinced that these young cloud software companies can ever grow as large as their investors believe, particularly if an economic downturn forces companies to rationalize their technology budgets. But software truly is eating the world, and that has accrued to the benefit of both titans such as Microsoft and relative newcomers like the members of the 20x Club.At the same time, investors are desperate for growth, and business software firms are delivering it in spades. They can also be relatively easy to understand — they sell software in exchange for cash — and businesses have proved to be relatively reliable consumers, unlike people and their tendency to flit from one hot internet thing to the next. And now that superstar tech companies have run into regulatory problems, been hit with tariffs or otherwise have more question marks than before, a bet on a company selling software that an antitrust lawyer would never notice suddenly looks like a good idea. The question is what that promise costs. As stock buyers pay more relative to a company’s revenue, any wobble in growth can result in a crash, and investors’ room for error narrows when stock prices are already high relative to a company’s financial prospects. High stock valuations may also deter some needed consolidation in business software. It has become fashionable not to care about valuation, but there can be a high price to bubbles in share prices. Of course, I could have called a bubble in business software stocks at multiple points in the last decade and it would have been accurate in the moment yet completely wrong. An index of mostly business software companies, the BVP Nasdaq Emerging Cloud Index, has more than quintupled since 2013, compared with a 74% gain for the S&P 500 over the same period. It’s true that 10 years into an unprecedented bull market in stocks, unusual valuations are par for the course. Maybe the bubble for business software firms will never end, or stock prices of these highflying software firms will deflate slowly rather than blow up. Maybe. Or there may be a high price to pay for software companies in an unprecedented stratosphere. (1) No, I am not sorry at all. I will say, however, that the "U" in PUTINs, Ultimate Software Group Inc., was sold in May to an investor group. My acronym is broken.(2) Yes, these software companies tend to be valued as a multiple of revenue rather than profits. In many cases they don't have profits.(3) Bloomberg Beta, the venture capital arm of Bloomberg Opinion parent Bloomberg LP, is an investor in Slack.To contact the author of this story: Shira Ovide at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The specter of antitrust action against four of the largest tech companies in the world has evolved into a parlor game among some in Silicon Valley: What antitrust suspect is the most vulnerable?