 | Nov 01, 2024 | | | | Supported by  | | | | | TGIF! Apple's revenue grew 6% on stronger iPhone sales. OpenAI added more web search capabilities to ChatGPT, putting it in greater competition with Google. Amazon Web Services reported steady revenue growth.
| | | | Apple lifted revenue 6% to $94.9 billion in the September quarter, its strongest growth in two years. Operating profit rose 10% to $29.6 billion, while after-tax profit dipped sharply reflecting a big tax penalty levied against Apple in Europe. Apple stock fell slightly in after-hours trading. The tech giant said iPhone revenue rose 5.5% to $46.2 billion, nearly double the growth rate of the year-ago quarter, countering the widespread perception that the iPhone 16 line of phones had underperformed past releases. The quarter also showed marginal growth in sales of Macs and iPads, while wearable sales dipped slightly. Apple's services revenue rose 12% to $24.9 billion. | | | | OpenAI said Thursday it added more web search capabilities to ChatGPT, putting it in greater competition with Google as consumers increasingly use chatbots as a partial replacement for traditional searches. ChatGPT's conversational answers will now include more links to relevant websites that can provide additional information, and they will include more real-time information on topics such as the weather, sports and the stock market. Google shares fell about 1.5% on Thursday but that was in line with broader stock indices, suggesting the OpenAI announcement didn't make an impact. Meta Platforms, meanwhile, is developing its own search engine so it can provide real-time information in its artificial intelligence chatbot, rather than rely on Google and Microsoft's Bing, The Information reported this week. The move comes several months after OpenAI announced a prototype of SearchGPT, an AI-powered search engine that's separate from ChatGPT. However, the company said Thursday that, based on feedback from the SearchGPT prototype, it decided to incorporate the search features into ChatGPT instead. Paying ChatGPT users will have access to the new search capabilities starting on Thursday, and free users will receive access in the coming months, the company said. | | | | Amazon Web Services revenue grew 19% to $27.5 billion in the third quarter, the same rate as the previous quarter, Amazon said Thursday. Meanwhile, the cloud computing unit's operating margins ticked up to 38.1% from 35.5% over the same period of time. Amazon shares rose 5% in after-hours trading on Thursday. The steady AWS growth comes after Google reported accelerated cloud growth and Microsoft reported a slight decrease in Azure growth earlier this week. Both rival cloud services are smaller than AWS but growing faster. Amazon's revenue from online retail sales and physical stores grew 8% and 5%, respectively, slightly higher than their growth rates during the previous quarter. But third-party seller services, which include the fulfillment fees and commissions Amazon charges merchants who sell on its site, rose 10% to $37.9 billion, the segment's slowest growth rate since the first quarter of 2022. | | | | Amazon expects to boost capital expenditures in 2025, exceeding this year's spending of roughly $75 billion, driven primarily by new infrastructure to support the company's artificial intelligence and cloud business, executives said Thursday. The company reported a record $22.6 billion in capital expenditures in the third quarter, up more than 80% year-over-year. That puts Amazon on track to spend about $75 billion this year, chief financial officer Brian Olsavsky said on a call with analysts. Amazon CEO Andy Jassy then said the company is on track to spend more than that next year. That figure also includes expenses for Amazon's retail business like warehouse construction in addition to data centers. Google spent $13.1 billion on capital expenditures in the second quarter, up 62% year-over-year. Microsoft's capital expenditures were $20 billion, up 79% from the previous year. | | | | Chinese research institutions with ties to the People's Liberation Army used Meta's open-source Llama artificial intelligence model to develop an AI tool with potential military applications, Reuters reported. In an academic paper published in June, Chinese researchers including those at the PLA's research body, talked about how they used Llama to build an AI model called ChatBIT, the report said. The researchers said in the paper that ChatBIT could be used for intelligence analysis as well as other possible applications such as strategic planning and command decision-making, according to Reuters. How China's government could use open-source AI models from U.S. companies has become a sensitive topic amid growing concerns in Washington about U.S. technologies helping China expand its military and intelligence capabilities. In May, a bipartisan group of U.S. lawmakers proposed a bill that would make it easier for the U.S. government to regulate the export of open-source AI models. | | | | Microsoft said Thursday it hired Jay Parikh, a former Facebook engineering leader who was recently CEO of the cybersecurity startup Lacework, to report to CEO Satya Nadella in an unspecified role. Microsoft "will share more on his role and focus in the next few months," Nadella said in a blog post. Parikh led Lacework from 2021 until earlier this year, serving as its sixth CEO in as many years. Under Parikh, Lacework raised $1.2 billion at an $8.3 billion valuation in 2021 but struggled to grow in the years that followed. After deal talks to sell the startup to competitor Wiz fell apart during due diligence in April, Lacework ultimately sold to Fortinet for around $200 million in August. Before that, Parikh was global head of engineering at Facebook, now called Meta Platforms, from 2009 to 2021. | | | | Comcast is considering spinning off its cable channels into a new company owned by its existing shareholders, Comcast president Michael Cavanagh said on Thursday, as it considers "the best path forward" for the businesses given the transition of viewers from cable to streaming. Speaking on an analyst call relating to the company's third quarter earnings, Cavanagh also said the company would "consider partnerships in streaming." He emphasized that neither the Peacock streaming service nor the NBC broadcast network would be included in the company to be spun off. He also emphasized it was only an idea that was being studied. All big TV companies are grappling with declining cable subscribers, which is squeezing the cable channels which used to be their profit engines. In the third quarter, Comcast's NBCU reported that profits at its media unit fell 10%, partly because of the cost of broadcasting the Paris Olympics. Peacock's loss in the third quarter fell to $436 million from $565 million a year earlier, on revenue that almost doubled to $1.5 billion. Peacock's revenue growth partly reflected subscriber gains flowing from its carriage of Olympics programming. | | | | Peloton Interactive has appointed a former Apple and Time Warner Cable executive, Peter Stern, as its new CEO, effective Jan. 1. Stern succeeds Barry McCarthy, who stepped down in May after two year stint at the fitness firm. Stern has long experience in subscription businesses, which is now Peloton's focus. He worked for Apple from 2016 through early 2023, building up its bundled subscription offerings. Before that, he spent more than a decade at Time Warner Cable and its onetime parent, Time Warner. Stern is joining Peloton as its business has stabilized after a severe decline in the past few years, following a pandemic-era boom, when people couldn't leave their homes to go to the gym. Peloton's business has shrunk by a third since its peak in 2021. But revenue rose slightly in the July quarter, the first time since the December quarter of 2021 that the company has increased revenue. In the past couple of years, under McCarthy's direction, Peloton shifted to focus more on selling subscriptions, using its fitness classes as the draw. | | | | Uber lifted revenue 20% to $11.2 billion in the third quarter, as higher advertising revenues in its Uber Eats delivery service offset weakening gross bookings on its ride-hailing operation. Uber forecast a slightly higher rate of growth in its gross bookings in the fourth quarter. The company's cash generation is continuing to grow. In the third quarter, Uber's free cash flow—cash from operations less capital expenditures—more than doubled to $2.1 billion. Profit margins improved at both of its businesses, as Uber restrained costs even as volume of bookings grew. The quarter showed that growth in bookings at Uber's ride-hailing business continued to slow, to 17% in the thrd quarter from 23% in the second quarter. On the food delivery side, however, growth was stable at 16%. | | | | Investors in autonomous vehicle-maker Waymo's latest funding round, which was announced last week, valued its business at $45 billion, according to a Thursday report by Bloomberg. That's a surprisingly low number, given that Alphabet and other investors have committed at least $13 billion to Waymo to date, according to an estimate by The Information and disclosures by Waymo and Alphabet executives. Waymo's parent company, Alphabet, led the latest financing, investing $5.6 billion alongside investment firms including Andreessen Horowitz, Fidelity, and Tiger Global. The valuation also demonstrates that Waymo is tiny compared with Alphabet's overall worth. Alphabet currently has a market capitalization of $2.1 trillion. The valuation comes amid growing signs that Waymo's robotaxi business is gaining traction. It operates in San Francisco, Phoenix and Los Angeles, and is expanding to Atlanta and Austin in a partnership with Uber. On Uber's third-quarter earnings call on Thursday, Uber CEO Dara Khosrowshahi said that Waymo had a ride hailing market share in the "high single digits or low double digits" in the areas of San Francisco where it operates. | | | | | Popular articles
By Jon Victor and Aaron Holmes
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