Umer's avatar

follower assets

Looking to invest in companies that have potential to become more valuable overtime.
$AMD and $INTC Have More Upside on Rebound of PC Sales, Analyst Predicts -- Barrons.com
By Tae Kim

Advanced Micro Devices and Intel are being tagged for an imminent business turnaround by Raymond James.

On Monday, the two major PC chip makers received recommendations from the investment bank's Srini Pajjuri. The analyst raised his price targets for AMD stock (ticker: AMD) to $115 from $100 and Intel stock (INTC) to $33 from $30. Pajjuri has a Strong Buy rating for AMD and an Outperform rating for Intel.

AMD and Intel use the x86 chip architecture in making processors that act as the main computing brains for PCs and servers.

PC industry sales have deteriorated over the last few quarters. Worldwide shipments of PCs fell 28% in the December quarter from a year earlier after a 15% year-over-year decline in the September quarter, according to research firm IDC, which cited a continued unwinding of the pandemic-era boom.

But Pajjuri believes computer sales will soon rebound after visits with more than 20 PC component companies in Asia over the past week. The firms "we met [in Taiwan and Korea] with are seeing early signs of recovery in commercial and gaming notebook/monitor orders while consumer PC demand remains subdued," he wrote.

In midday trading, AMD stock fell 3.6% to $94.32, while Intel declined 3.3% to $28.83.

The analyst expects AMD's PC chip revenue to improve after the March quarter as PC demand gets better. He said Intel should also benefit from rising corporate demand later this year.

"We believe the worst is behind for most of our coverage," he wrote. We "see further outperformance" for semiconductor stocks.

AMD and Intel shares have fallen by 16% and 39%, respectively, over the last 12 months.
Do you think demand has normalised from the COVID duration and work from home?
Add a comment…
YouTube TV Raises Base Subscription Price By 12% -- Barrons.com
YouTube TV Raises Base Subscription Price By 12% -- Barrons.com
By Eric J. Savitz

The virtual cable service YouTube TV has said Thursday it will boost its base subscription price by 12% to $72.99 a month, from $64.99.

Part of the Google arm of Alphabet (ticker: GOOGL), YouTube TV said that new users will see the increased pricing effective immediately. Existing members will see the higher price starting April 18.

YouTube TV said it is reducing the price of its "4K Plus" add-on service, which includes higher quality video on some content and unlimited concurrent streams at home, to $9.99 a month from $19.99 previously.

YouTube said the higher base price is a reflection of higher costs.

Pricing varies for other similar services, all with a slightly different set of channels.

Hulu with Live TV is $69.99 a month if you bundle ad-supported versions of Hulu and Disney+, or $82.99 for the ad-free versions of those services. Sling is $60 a month for the combined Sling Orange (which has more sports content) and Sling Blue (which has more news and entertainment content.) Fubo TV charges $74.99 for a "Pro" plan, $84.99 for an "Elite" plan, which adds more channels, and $94.99 for its "Premier Plan," which includes Showtime in the bundle.

YouTube TV last raised prices for the service in June 2020, when it lifted the base price by $15 to $64.99.

Write to Eric J. Savitz at eric.savitz@barrons.com
This was a big raise I forgot it was already so high at $64.99. At $72.99 it feels like we are in cable territory.
U.S. Companies Are Sitting on $3.6 Trillion in Cash. SVB Has Added New Risk to It All. -- Barrons.com
U.S. Companies Are Sitting on $3.6 Trillion in Cash. SVB Has Added New Risk to It All. -- Barrons.com
By Eric J. Savitz

As Silicon Valley Bank slid into receivership this month, one of the most unsettling disclosures was the large number of companies with bank deposits in excess of the $250,000 covered by federal deposit insurance. In the most startling example, the streaming video company Roku revealed that it had $487 million parked there, about 26% of its total corporate cash. "At this time, the Company does not know to what extent the Company will be able to recover its cash on deposit at SVB," Roku said in a securities filing.

Those were scary words until the government came to the rescue of Roku (ticker: ROKU) and hundreds of other SVB depositors with accounts in excess of $250,000, vowing to make them whole. But the disclosures raise questions, not least of which is what other large companies are doing with all their cash.

Before we get to that, a few more words on Roku. The company declined a request to discuss the situation, but there are some hints. For one thing, Roku and SVB have a long history. Roku's 2017 initial-public-offering prospectus contains the phrase "Silicon Valley Bank" 22 times, with Roku indicating that it had been borrowing from the bank at least since 2014.

At the time of the IPO, those borrowings were secured by all of the company's assets. While the borrowings have been paid off for some time now, the point is that Roku, like many companies in the Valley, were deeply entwined with the bank and its parent SVB Financial. (I should note here that I worked at Roku for a year before rejoining Barron's in 2019 and before that served as a consultant on their IPO while I was a partner at the communications firm Brunswick Group.)

SVB also had a substantial business making loans to early stage unprofitable companies. That's a category of the credit market known as venture debt -- loans to pre-IPO companies. SVB was offering the debt equivalent of Series A financing. The terms sometimes required that companies keep their cash inside the bank.

While none of this excuses the risks taken by Roku and other tech firms, it does help explain why it happened.

I spoke with chief financial officers and treasurers at multiple public tech companies this past week to get a grasp on the mundane but critical question of how best to manage corporate cash.

It's no small market. According to Carfang Group, a treasury management consulting firm, U.S. companies currently hold about $3.6 trillion in cash on their balance sheets, soaring over the last two decades, from about $1 trillion in 2000.

Just the five megacap tech companies alone -- Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon.com (AMZN), and Meta Platforms (META) -- hold more than $500 million worth of cash and marketable securities.

The financial tech execs I spoke with, asked not to be identified, noted that it's not unusual for larger companies to have hundreds or even thousands of bank accounts. Companies with geographically vast footprints and large daily cash deposits -- think of large retailers like Walmart or Costco Wholesale -- require a vast network of banks, often in places where larger banks don't have operations. Countries with far-flung international operations need local banks in every market, with multiple banks in China and other large countries.

Anthony Carfang, founder of the Cargang Group, said in a recent webinar that corporate treasurers face at least a half dozen types of risk. There's liquidity risk, which became crystal clear with the SVB collapse -- what he calls "the ability to pay today's bills today."

There's interest rate risk -- that's the one that triggered SVB's demise. There's concentration risk (hello, Roku!). There's duration risk, which also contributed to the troubles at SVB. There's credit risk. And there is relationship risk -- that one bit many of the companies that were tied to the SVB collapse.

Here are some takeaways on how tech companies approach managing cash, according to senior execs I spoke with.
-- The wisest course of action, they say, is to invest the cash in money-market funds banked by government securities -- or through direct purchases of short-term Treasuries, either through intermediaries or through the government's TreasuryDirect program. This generally cuts out the banks, and reduces several of the risks cited by Carfang. One thing that's clear is that the Valley's largest companies aren't generally turning to SVB for capital -- and it is unlikely they kept keep much cash at SVB or other regional banks. -- Managing cash at a large company can be mind-numbingly complex, sometimes covering hundreds or even thousands of accounts. Acquisitions can add hundreds of additional accounts that can take long periods to wind down, in particular those used for accounts receivable and accounts payable. One corporate treasurer told me it can take years to shut down accounts in some foreign jurisdictions. In some places, the treasurer added, there are strict rules on commingling revenue from products and services. In China, arcane banking rules can vary by province. Another corporate treasurer said he uses at least two banks in every region where his company operates to address the risks of relying on a single bank in any location. -- Several treasurers I spoke with said they use the money management portal from a company called Institutional Cash Distributors to access money-market funds from larger issuers like BlackRock, BNY Mellon, State Street, and others. They note that ICD provides a dashboard that makes it easy to invest in multiple money funds, spreading the risks, while getting detailed information on the combined nature of their holdings, in terms of duration, geography, credit ratings, returns, and issuers. They also noted that issuers pay a fee to ICD, but investors pay ICD nothing, with very low management fees on the funds. -- The primary goal for any corporate CFO or treasurer is capital preservation. A year ago, when rates were close to zero, there was no opportunity to generate a return on corporate cash. In the current environment, that cash can now generate a return that can be a useful addition to net income. But investors aren't buying tech stocks for their ability to squeeze extra dollars from cash balances, and there is little reason to take on additional risk to do it, despite the temptation to reach for yield.

Tech companies may have piles of cash, but they aren't banks. They should be using their capital to innovate. Not speculate.

Write to Eric J. Savitz at eric.savitz@barrons.com
$NVDA A 'Hard To Ignore' Stock As 'Arms Race' For AI Heats Up, Analyst Says $MS
Nvidia Corp.'s (NASDAQ: NVDA) recent stock gains are premised on the graphics chip maker's AI opportunity, which has prompted Morgan Stanley to turn bullish on the stock.

The Analyst: Joseph Moore upgraded Nvidia shares from Equal-Weight to Overweight and upped the price target from $255 to 304, suggesting roughly 19% upside potential.

The Thesis: Morgan Stanley's view of tactical numbers being challenged in both gaming and data centers has largely played out, Moore said in a note. 'The development of generational AI is too much of a megatrend to get distracted by tactical concerns,' he said.

See Also: Best Semiconductor Stocks

Nvidia stock will continue to be "hard to ignore' in an otherwise challenging semiconductor environment, the analyst said. AI has moved to be one of the most significant developments in technology.

It will likely replace human capital on a large scale, with cloud customers vying for leadership over the next three to five years, Moore said.Since the intensity of the AI workloads, particularly on training, increases, Nvidia is likely to be a big beneficiary, given its dominant position in the training market, the Moore said. He also noted a significant shift in cloud spending toward AI, potentially toward Nvidia.

Nvidia's valuation has spiked on near-term estimates but the overall semiconductor group has also rallied to an 'uncomfortable point' that there are few bargains in areas with long-term growth potential, especially as conditions are difficult, Morgan Stanley said.

'If we extrapolate growth trends for 5 years, NVIDIA valuation is high, but not dramatically out of line with peers,' Moore said. 'We have missed the bigger picture elements that NVIDIA is now the arms dealer for one of the technology races that matter most."

Expect high investment in Nvidia products. That's bad for the rest of computing as budget compression is met with high AI spending requirements, he explained.
SentinelOne $S Impresses Analysts With Q4 Beat
Needham analyst Alex Henderson reiterates SentinelOne Inc (NYSE: S) with a Buy and a $19 price target.

Sentinel posted strong Q4 results, with revenue up 92% Y/Y to $126.1 million, while ARR grew 88% Y/Y to $548.7 million, both above consensus.

Guidance was mixed with Q1 revenue ahead of the Street, while full-year revenue, operating margin, and ARR missed expectations.

FY24 Revenue guidance for 50.5% growth at the midpoint to $635.5 million came in below consensus, while ARR growth of 47% was a downtick from prior guidance for 50% plus.

At the same time as they offered conservative guidance, Sentinel noted no deterioration from Q3 to Q4, more robust win rates, a pipeline that has doubled Y/Y to record levels, a slight uptick in Gross Customer Retention, and strong customer Net Retention >130%.

SentinelOne still believes 50%+ ARR growth is achievable.

Guggenheim analyst Raymond McDonough reiterates SentinelOne with a Buy and a $18 price target.

Going into SentinelOne's Q4, the analyst saw little risk, and Q1 consensus estimates given implied New Business declines similar to that of Q3 (down approximately 65%), where rumblings of execution issues surfaced and the soft macro environment began to impact most, if not all, of security.

While 4Q did not prove to be a significant improvement to 3Q, there were enough improvements for revenue and ARR to beat Street expectations.

The analyst reserved concerns over preliminary FY24 ARR guidance of at least 50% Y/Y growth, as he believed it implied an outsized rebound in New Business growth in F2H24.

Despite a pipeline that has almost doubled Y/Y, win rates and gross retention improving sequentially, and cloud workload protection gaining momentum, management lowered FY24 ARR growth expectations to 47% Y/Y.

FY24 revenue guidance also came in 170bps below Street expectations, with management underscoring multiple times that guidance was prudently considering a persistent challenging macro environment.

Ultimately, the analyst views FY24 guidance as reasonable with more potential upside to revenue than ARR, but it all comes down to execution.

JMP Securities analyst Trevor Walsh maintains SentinelOne with a Market Outperform, lowering the price target from $36 to $26.

The re-rating reflects multiple compression across JMP's peer group and a more conservative top-line outlook due to macroeconomic uncertainty heading into FY24 after the company reported 4Q results, marking the sixth consecutive quarter of over 25% Y/Y operating margin expansion, and further outlined a critical partnership with cloud security startup Wiz, all leading the stock to trade up ~5% during the after-hours session.
Dark Web Leaks: Over 721 Million Passwords Exposed in 2022
If you don’t have an ace password manager generating secure, impossible-to-guess credentials, it might be time to consider one.

Cybercrime analytics firm SpyCloud found 721.5 million exposed login credentials on the dark web in 2022, with nearly half coming from botnet logs.

Researchers also discovered a staggering number of users that had their credentials leaked in breaches last year were reusing the same compromised passwords — around 72% total.

These figures come from SpyCloud’s 4th Annual Identity Exposure Report, which the firm published on Monday.

“Our researchers combed through billions of recaptured data assets from the dark web over the course of 2022, and their analysis brought back a few familiar themes from past years, and also uncovered some alarming shifts in cybercriminal trends,” SpyCloud stated.

Malware-Infected Devices Just as Dangerous as Data Breaches

SpyCloud stated that, contrary to popular belief, data breaches are not the only way login credentials end up on the dark web. In fact, credential-stealing malware is just as big of a threat.

Additionally, malware-infected devices pose a more severe long-term threat to organizations. If they remain undetected, malicious actors operating the malware or botnet can maintain persistence and continue to steal data, even if the victim changes their passwords.

“Over the past few years, we’ve observed that malicious actors are more commonly using a multitude of malware-stolen data assets to impersonate identities,” the firm stated.

“They are gravitating to this tactic — rather than relying on combo lists (username and password pairs) that have been circulating for a while — because it’s more effective and has a greater return on investment,” it added.

Cybercriminals also rely on malware that collects browser session cookies which allows them to carry out further malicious activity. They can use session cookies to steal more sensitive information or use it to bypass multi-factor authentication.

Poor Password Hygiene Rampant in 2022

The report highlighted that password reuse numbers did not improve last year. SpyCloud found that nearly 72% of users exposed to two or more breaches used recycled passwords. Furthermore, it found that pop culture passwords remained a popular phenomenon.

“It appears that Swifties take their love of Taylor to the next level by using her name in their passwords, or at least 186K of them did. And another pop star, Bad Bunny, Spotify’s most streamed artist of the year, also showed up in 141K passwords we recaptured last year,” SpyCloud stated.

Ultimately, organizations cannot afford to overlook poor password hygiene, as it remains a major target for malicious actors for initial access to corporate networks. Once a criminal enters a victim’s IT environment, they could steal more sensitive company data or infect the network with ransomware.

Using a password manager is a good starting point to prevent some of the common mistakes that allow bad actors to easily enter networks. We also recommend that small business owners check out our beginner’s guide to cybersecurity for more useful tips.

I definitely need better passwords 🙈
$NET Cloudflare Takes On Online Fraud Detection Market
Cloudflare, Inc. (NYSE: NET), the security, performance, and reliability company helping to build a better Internet, today announced it is entering the fraud detection market to help businesses quickly identify and stop online fraud - including fraudulent transactions, fake account signups, account takeover attacks, and carding attacks - before it impacts their brand or their bottom line. Powered by sophisticated machine learning models and global threat intelligence, Cloudflare is developing Cloudflare Fraud Detection to quickly stop account and payment fraud while also blocking the bots and humans behind it - automatically, and at global scale.

Digital fraud threats are ever evolving, highly targeted, and can be committed by both humans and bots. According to PWC's Global Economic Crime and Fraud Survey, more than half of companies with at least $10 billion in revenue experienced some sort of digital fraud in the last two years - the highest level in decades. Today, businesses often employ resource-heavy teams or rely on multiple vendors to help fight fraud. However, both options can hinder the speed and experience of a customers' transaction. What's more, they inherently lack access to robust threat intelligence, making it harder for businesses to understand if fraud is coming from a bot or a human, and then stop it in real-time. As attacks increase in volume and attackers evolve their tactics, businesses need a faster, more comprehensive way to stop attacks the moment they are detected.

"Customers have long trusted us to help protect them online, and now we're taking that even further by tackling online fraud," said Matthew Prince, co-founder and CEO of Cloudflare. "With our massive global network, we can see more, and secure more. We believe we can use our network to stop online fraud faster than anyone else - so business leaders will no longer be kept up at night worrying that online fraud will hurt their brand, their customers' experience, or their revenue."

Cloudflare's global network spans more than 285 cities in over 100 countries to power millions of websites, APIs, and mobile applications - including major online retailers, global financial institutions and payment providers. That will allow Cloudflare to develop real-time advanced detection models that provide greater insights into online fraud threats, and run those models in near-real time to stop threats without any impact on performance. Cloudflare Fraud Detection will first synthesize different threat activity it sees across the globe and across many different Cloudflare products. For example, Cloudflare Fraud Detection will combine insights from Cloudflare's cloud email security - like phishing attacks - with information about emerging attacks from the Cloudforce One threat intelligence team to determine if a new user signup may be fake. Cloudflare Fraud Detection will then help businesses act immediately - such as to block fraudulent transactions in real time - because its machine learning platform runs across the entire Cloudflare network instantaneously. These architectural advantages will enable businesses to quickly and automatically block new threats that emerge - often before a single fraudulent transaction can be processed.

With Cloudflare Fraud Detection, businesses will have a consolidated fraud management solution with several threat-specific detection capabilities to:

Stop bots at global scale: With Cloudflare's existing expertise in bot management, businesses will be able to automatically block malicious bot traffic - no human intervention needed.Safeguard brand reputation and consumer trust: Brands should not have to choose between a seamless customer experience and security. Cloudflare will help prevent attackers from creating fake accounts, without adding complexity or extra steps to the customer journey.Protect consumers even if they've fallen victim to a past breach: Credential stuffing attacks take advantage of people using the same password across multiple websites by using login credentials that have been breached from one site to try to gain access to other websites' accounts. With Cloudflare Fraud Detection, brands will be able to detect and stop these attacks.Prevent the use of stolen credit cards: Hackers increasingly use large bot networks to exploit stolen credit card information to commit online fraud at massive scale, making purchases before consumers can even notice. Cloudflare Fraud Detection will have built-in detection capabilities to identify and stop these botnets.

To learn more about Cloudflare Fraud Detection, please check out the Cloudflare Blog.
Wolfe Research sees $ROKU account growth realistic
Roku's forecast for active account growth looks realistic despite growing competition from Google, Amazon and other companies coming for its top spot as a gatekeeper to streaming TV, Wolfe Research analysts say in a research note. Data supports the company's net add conversion cycle normalizing from lows in 1H, and Roku's shift into its own branded TVs should drive better active account penetration, the analysts say. They upgrade the stock to peer perform from underperform. Shares rise 4% to $61.92.
$S Sees Significant Rev Growth in 1Q, FY 2024
SentinelOne Inc. said Tuesday it expects to continue achieving revenue growth in the first quarter of fiscal 2024 and the year as a whole.

The cybersecurity company sees revenue of $137 million for the quarter ending April 30, up from reported revenue of $78.3 million for the year-earlier period.

For fiscal 2024, SentinelOne forecasts revenue of $631 to $640 million, representing growth of up to 52% when compared with fiscal 2023.

The company's outlook comes as it reports total customer count growth of about 50% to over 10,000 at the end of its financial year.
Already have an account?