Tue, May 26, 7:34 PM
- "Today, we’re announcing a Cortana application for Android phones and for iPhones which works as a companion to Cortana on your Windows 10 PC," says Microsoft (NASDAQ:MSFT) exec Joe Belfiore. "The Cortana app can do most of the things Cortana does on your PC or on a Windows phone ... [the app] will help you complete tasks you begin on your PC wherever you are, on your phone."
- Reuters reported in March iOS/Android Cortana apps were on the way, and also that Microsoft is prepping a more advanced version of its personal assistant (codenamed Einstein) for Windows 10 that can read/analyze e-mail a la Google Now. Today's move is the latest in a long list of iOS/Android app launches to occur over the last two years.
- Also unveiled: Phone Companion, an app pre-installed with Windows 10 that helps users sync files and content between their PCs and phones; iOS, Android, and Windows Phones are supported.
- Meanwhile, Microsoft has added Sony, LG, and 18 other Android OEMs to the list of companies pre-installing Office, OneDrive, and Skype apps on their tablets. Pre-install deals with Samsung, Dell, and 9 others were announced in March.
Mon, May 25, 4:08 PM
- Bowing to regulatory pressure, Amazon (NASDAQ:AMZN) has begun booking European revenue in the countries in which sales were recorded, rather than funneling it through the low-tax haven of Luxembourg. The change, which could have a big long-term effect on Amazon's EU income tax payments, went into effect on May 1, and has thus far covered U.K., German, Italian, and Spanish sales.
- Amazon already collects VAT on European sales, but its use of Luxembourg is one reason why its European income tax payments have been modest - the company paid just £4.2M in U.K. taxes in 2013 on revenue of £4.3B. The other reason, of course, is that Amazon's international ops (thanks partly to Asian investments) have been in the red - Amazon reported a $297M International segment op. loss for 2014, compared with a $2.11B North American op. profit.
- Amazon's move could be a sign of things to come: Apple, Google, Microsoft, Starbucks, and a slew of other U.S. multinationals have also come under fire for their use of tax havens to cut their EU tax bills.
- Separately, Gartner has given Amazon Web Services its highest rankings in its annual cloud infrastructure (IaaS) Magic Quadrant report in both the "Ability to Execute" and "Completeness of Vision" categories. Among the 15 IaaS providers reviewed, AWS and Microsoft's (NASDAQ:MSFT) Azure are the sole occupiers of Gartner's "Leaders" quadrant.
- Gartner: "[AWS] is the overwhelming market share leader, with over 10 times more cloud IaaS compute capacity in use than the aggregate total of the other 14 providers in this Magic Quadrant. This has enabled it to attract a very large technology partner ecosystem ... it is extraordinarily innovative, exceptionally agile, and very responsive to the market. It has the richest array of IaaS features and PaaS-like capabilities ... Although it is beginning to face more competition from Microsoft and Google, it retains a multiyear competitive advantage."
- Gartner does caution AWS "can be a complex vendor to manage," and that it's "spreading its efforts very broadly." Altogether, it expects global IaaS spend to grow 32.8% this year to nearly $16.5B, and post a 29.1% CAGR from 2014-2019.
Fri, May 22, 1:19 PM
- CNBC's David Faber reports Microsoft (MSFT -0.7%) held "significant talks" earlier this spring about acquiring Salesforce (CRM +2.4%), but the companies "remained far apart on a price." Microsoft was reportedly willing to offer $55B for Salesforce (current market cap of $49.3B); Salesforce CEO Marc Benioff is said to have wanted as much as $70B.
- Faber adds the talks aren't expected to restart anytime soon. Aside from the price difference, Satya Nadella was reportedly "somewhat reluctant to pull the trigger on a deal of such size and consequence for his company."
- Bloomberg reported on May 5 Microsoft is "evaluating a bid" for the cloud CRM software giant - Microsoft's name had already loomed large in speculation about a rumored suitor. Reuters reported soon afterwards Microsoft wasn't currently weighing an offer.
- Salesforce has spiked higher on the report. Shares are up 6.3% since the company posted an FQ1 beat and reported 31% Y/Y deferred revenue growth on Wednesday afternoon.
Thu, May 21, 9:17 AM
- New additions to Goldman's hedge fund hotels - 50 stocks which most frequently appear among the largest ten holdings of hedge funds: AerCap (NYSE:AER), Assured Guaranty (NYSE:AGO), Baker Hughes (NYSE:BHI), Citizens Financial (NYSE:CFG), Colony Capital (NYSE:CLNY), Dresser-Rand (NYSE:DRC), Family Dollar (NYSE:FDO), Hospira (NYSE:HSP), Netflix (NASDAQ:NFLX), NXP Semi (NASDAQ:NXPI), Pharmacyclics (NASDAQ:PCYC), Visa (NYSE:V), and Walgreens (NASDAQ:WBA).
- Since 2001, the basket has outperformed the S&P 500 in 66% of quarters by an average of 73 basis points. YTD, however, it has underperformed by nine bps. Goldman notes the current basket overweights Consumer Discretionary (22%) and underweights Consumer Staples (2%).
- Looking at the full list, Actavis (NYSE:ACT) leads the way, with 77 funds naming the stock as a top 10 holding. Next up is Apple (NASDAQ:AAPL) with 69, then Facebook (NASDAQ:FB) at 42. For the entire list of 50, the average is 26 funds making a stock a top 10 holding.
- The rest in order: Valeant (NYSE:VRX), Microsoft (NASDAQ:MSFT), DirecTV (NASDAQ:DTV), Citigroup (NYSE:C), Time Warner (NYSE:TWC), Delta (NYSE:DAL), Cheneire (NYSEMKT:LNG), Yahoo (NASDAQ:YHOO), Liberty Global (NASDAQ:LBTYK), AIG, SunEdison (NYSE:SUNE), Air Products (NYSE:APD), Amazon (NASDAQ:AMZN), GM, BofA (NYSE:BAC), JPMorgan (NYSE:JPM), Macquarie Infrastructure (NYSE:MIC), American Airlines (NASDAQ:AAL), Charter Communications (NASDAQ:CHTR), Google (GOOG, GOOGL), Ally Financial (NYSE:ALLY), NorthStar Realty (NYSE:NRF), Priceline (NASDAQ:PCLN), eBay (NASDAQ:EBAY), MasterCard (NYSE:MA), Alibaba (NYSE:BABA), Micron (NASDAQ:MU), Williams (NYSE:WMB), Gilead (NASDAQ:GILD), Berkshire Hathaway (BRK.A, BRK.B), Dolar General (NYSE:DG), NorthStar Asset (NYSE:NSAM), Brookdale Senior (NYSE:BKD), DISH Network (NASDAQ:DISH).
- See also: Goldman updates list of hedge funds most-shorted stocks (May 21)
Tue, May 19, 12:11 PM
- FBR's Chris Rolland, after talking with Intel (INTC -1.2%) IR chief Gary Willihganz: "While excess PC inventory dynamics were well known exiting 2014, we believe many investors did not expect additional PC inventory drain into the Win10 release. Intel was careful to explain these nuanced inventory dynamics, which we believe may have also been a contributor to the weaker-than-expected ODM shipments witnessed in April."
- Rolland adds that while Intel "expects inventory replenishment in 2H15 around the Win10 release, it was careful to temper expectations for a surged uptick in demand." A Q1 CC remark from AMD CEO Lisa Su suggested Windows 10 (NASDAQ:MSFT), whose Start menu and enterprise-friendly features could help boost industry demand, will launch in late July.
- Also: Morgan Stanley says it's cautious on PC names in the near-term (moreso on chipmakers than other firms) given soft Q2 PC/hard drive inventory builds and weak April sales from ODMs. It sees normal seasonal growth following a rough Q1, and doesn't expect a recovery occurring before Q3.
- Micron (MU -2.1%), Seagate (STX -3.3%), and Western Digital (WDC -1.5%) are lower on a day the Nasdaq is near breakeven. Micron, which is close to its 52-week low, fell on Friday after Nomura cut estimates on PC DRAM pricing fears. Microsoft is down 0.7% after factoring its dividend payment (shares are trading ex-dividend today).
Mon, May 18, 3:10 PM
- Bloomberg reports Baidu (BIDU -0.8%) is teaming with top ride-sharing platform Uber and P-E firm Apax Partners to jointly bid for Nokia's (NOK +0.7%) HERE mapping/navigation software unit. Sources state the business could fetch as much as $4B.
- A rival group consisting of Chinese messaging/gaming giant Tencent (OTCPK:TCEHY), Chinese mapping firm/Tencent partner NavInfo, and Swedish P-E firm EQT Partners is also reportedly bidding. A group of German automakers (mentioned in past reports) and a trio of P-E firms are reportedly interested as well, and Microsoft (NASDAQ:MSFT) has offered to buy a minority stake.
- The next round of bids are reportedly due in 2 weeks. Baidu is said to be partnering with Uber to "avoid regulatory scrutiny." The NYT previously reported Uber has bid up to $3B for HERE, which has a dominant position in the in-car automotive market.
- Separately, Baidu has announced a "strategic investment" in content recommendation platform Taboola - readers may be familiar with the "Recommend for you" article boxes Taboola provides at the bottom of articles on partner sites. The WSJ reports Baidu, which plans to bring Taboola's platform to China, invested $20M-$30M.
Fri, May 15, 4:52 PM
- Video game spending was up slightly Y/Y in April, gaining 3% to $595.7M, paced by a 13% increase in physical software sales, according to industry trackers NPD Group.
- That's apart from mixed results in hardware sales -- which were up 12% in unit terms, but declined 4% on a dollar basis to $183.9M, after a round of console price cuts.
- Physical software rose to $256.7M. This month, violent games took the spotlight, with "Fatality"-friendly Mortal Kombat X (NYSE:TWX) the new game topping the chart. It was followed by Grand Theft Auto V (NASDAQ:TTWO) and Battlefield: Hardline (NASDAQ:EA). MLB 15: The Show (NYSE:SNE), another new game, came in at the fourth spot, just ahead of Minecraft.
- GTAV was one of three games that Take Two had in the top 10, along with NBA 2K15 and Borderlands: The Handsome Collection.
- At long last, the Xbox One (NASDAQ:MSFT) took over the top console spot from PlayStation 4 (SNE) despite no big game news to push it; Xbox One sales were up 63% Y/Y.
- Nintendo (OTCPK:NTDOY) says that the Wii U is up 15% for the first four months of 2015 vs. the year-ago period, and 3DS sales up 65% Y/Y for that same period.
Fri, May 8, 4:03 AM
- Microsoft (NASDAQ:MSFT) currently is not weighing an offer for Salesforce.com (NYSE:CRM), Reuters reports, saying that Microsoft sees the CRM software giant's market valuation as too expensive.
- Earlier this week, Bloomberg reported that Microsoft was evaluating a bid for Salesforce after the latter was approached by another unnamed would-be buyer.
Tue, May 5, 3:08 PM
- Bloomberg reports Microsoft (MSFT -1.2%) is "evaluating a bid" for Salesforce (CRM +4.8%) after Salesforce was approached by another potential suitor. Salesforce is reportedly working with two banks to determine a response.
- Bloomberg cautions Microsoft isn't currently in talks with the cloud CRM software giant, whose market cap stands at $49B. There was plenty of speculation Microsoft was the company that (per Bloomberg) recently approached Salesforce. SAP has denied being interested, and Oracle has suggested it isn't. A source says Microsoft has "long expected it might compete for Salesforce if it was for sale."
- Salesforce has jumped on the report. If Microsoft pursues a bid, activist ValueAct Capital (has a board seat) might raise objections.
- The report comes as Microsoft announces a partnership with cloud ERP/HR/e-commerce software vendor NetSuite (N +3%) to integrate NetSuite's apps with Office 365 apps and Azure services, and to make Azure NetSuite's "preferred cloud infrastructure platform." Microsoft struck an Office 365-focused partnership with Salesforce last year. NetSuite has received a lift from Bloomberg's report.
Mon, May 4, 2:55 PM
- Facing the challenge of giving cloud customers the reliable connections they're used to with local software, Equinix (NASDAQ:EQIX) is offering private connections to Microsoft's (NASDAQ:MSFT) cloud-based Office 365, via Azure ExpressRoute through the Equinix Cloud Exchange.
- Equinix formed its partnership to provide private conenctivity on Azure ExpressRoute in April 2014. Offering customers the ability to work on office away from the public Internet should be a selling point for both companies, as Office 365 is dependent on solid network latency.
- Equinix will make the new offering available in its 15 markets in Q3.
Sat, May 2, 2:58 PM
- Microsoft's (NASDAQ:MSFT) HoloLens augmented reality headset relies on an advanced optical projection system to "generate multi-dimensional full-color images with very low-latency so you can see holographic objects in the physical world," the software giant states in a blog post released amid its BUILD conference.
- HoloLens also supports spatial (location-specific) sound recognition. Other features related to capturing real-world data include a depth sensor used to "spatially map your environment and interpret your hand gestures," head-tracking cameras, and an "internal measurement unit" (IMU) sporting an accelerometer, gyroscope, and magnetometer.
- Processing power is provided not only by a CPU and GPU, but also by a Microsoft-designed holographic processing unit (HPU). There's still no word on HoloLens' exact launch date or pricing; a Microsoft exec told the NYT the device will cost "significantly more" than a console.
- A slew of first-hand impressions have arrived from writers trying out HoloLens prototypes at BUILD. The consensus: HoloLens has tremendous potential, but its limited field of view for holograms is a major handicap for now.
- "Within carefully managed conditions, HoloLens is one of the most amazing pieces of tech I've seen," writes The Verge's Adi Robertson. "But HoloLens only feels natural when you're not handling anything much bigger than a basketball. It produces a magic square the size of a large TV screen, and the moment something slips outside, it disappears."
- Paul Thurrott, who tried out a bulkier demo unit in January, is a big fan of HoloLens' spatial sound support. But he adds the newer hardware prevents users from seeing holographic objects that aren't "right in the middle of your field of vision." Microsoft is relying on a feature called Gaze Control to keep a user's field of vision focused on holograms. Gesture and voice controls allow users to manipulate objects.
- Business Insider's Julie Bort and Matt Weinberger provided one of the more positive takes. "HoloLens is about getting specific tasks done ... Air-tapping to select and open holograms in the air felt surprisingly natural, as did talking into the microphone. Using it in conjunction with a standard mouse/PC setup felt very natural ... The HoloLens, or something like it, is the future." They also observe Minecraft can function as a "hologram-creation engine" for HoloLens.
- Separately, Microsoft has confirmed its acquisition of Surface stylus chip developer N-trig. The WSJ reports the purchase price is $30M, much less than the ~$200M reported in February.
Fri, May 1, 5:02 AM
- Just two weeks after launching its landmark competition case against Google, the European Commission is poised to widen its front against U.S. tech companies by initiating a separate investigation into a broader range of online platforms.
- The latest draft of the plan, seen by the FT, will encompass everything from online shopping to telecoms regulation and is set be approved by the commission next week.
- The "digital single market" probe could also bring in stricter rules to video services companies such as Netflix (NASDAQ:NFLX) and messaging apps like WhatsApp (NASDAQ:FB) and Skype (NASDAQ:MSFT) which have become big rivals to traditional European media and telecoms companies.
Wed, Apr. 29, 10:39 PM
- Following an afternoon Bloomberg report stating Salesforce (NYSE:CRM) has been approached by a potential acquirer, many have speculated archrival Oracle is the suitor. However, BuzzFeed's John Paczkowski (formerly with Re/code) reports Oracle (NYSE:ORCL) hasn't made such a move.
- Outside of Oracle, Microsoft (NASDAQ:MSFT) is the name that has popped up most often. The software giant (closed today with a $399B market cap) is large enough to swallow Salesforce, has relatively limited product overlap - its Dynamics CRM apps compete against Salesforce's apps, but generally with SMBs than enterprises - and has been hungry to grow its cloud exposure. It just set a target of nearly tripling its business cloud service revenue run rate by mid-2018.
- Also: Microsoft and Salesforce struck an Office 365-centered partnership last year. Salesforce CEO Marc Benioff showed up today at Microsoft's BUILD developer conference to trumpet the integration of additional Microsoft and Salesforce apps/services, and made a few tweets about the partnership along the way.
- Salesforce closed up 11.6% today thanks to Bloomberg's report, and then rose 1% in AH trading to $75.41. Many cloud software peers also got a lift.
Wed, Apr. 29, 7:16 PM
- Microsoft (NASDAQ:MSFT) is aiming for a $20B/year run rate for its Commercial Cloud reporting segment by FY18 (ends June '18), says Satya Nadella at an analyst meeting (webcast) held amid the company's BUILD conference. Microsoft announced last week Commercial Cloud, a term that covers Azure cloud infrastructure/app platform services, commercial Office 365 sales, and Dynamics Online business app sales, was on a $6.3B/year run rate.
- Assuming the target is hit, some of that growth will come from the migration of traditional Office and Dynamics licensees to cloud subscriptions. But Nadella promises there will be plenty of other growth as well. "This is not a one-for-one shift. There is actually a pretty significant expansion of the value we can deliver.”
- M&A, of course, could also expand the division. Bloomberg reported earlier today cloud CRM software giant Salesforce (current market cap of $47B) was approached by a potential acquirer. Much of the speculation about the rumored suitor revolves around Microsoft and Oracle.
- Also: With Windows users now getting free upgrades and Microsoft increasingly looking to monetize the OS via services, the company says it will recognize Windows 10 license revenue over a 3-year period. Windows license revenue has traditionally been recognized up-front.
- Earlier: Microsoft launches new developer tools, Azure services
Wed, Apr. 29, 2:25 PM
- Furthering its efforts to win over iOS/Android developers (many of whom have been historically wary of the company), Microsoft (MSFT -0.4%) has used the first day of its 2015 BUILD developer conference to launch Islandwood and Astoria, projects that respectively allow iOS apps to be ported to Windows 10 and Android apps to run within Windows unmodified.
- The efforts follow the December acquisition of HockeyApp (a provider of iOS/Android app crash analytics tools), and a promise that the next version of its core Visual Studio developer suite (Visual Studio 2015) would be "built from the ground up with support for iOS, Android and Windows."
- Also launching: 1) Visual Studio Code, a free cross-platform code editor for writing Web/cloud apps. Microsoft has already made Visual Studio 2013 free to non-enterprise users in an attempt to win new developers. 2) Tools for presenting sites as apps, and for quickly modifying Windows apps so that they can be offered through the Windows Store.
- Meanwhile, Microsoft has continued its barrage of Azure cloud service launches; its newest services are aimed at big data/analytics projects. One new service in preview mode (Azure SQL Data Warehouse) covers the building of structured data repositories, and the other (Azure Data Lake) unstructured repositories (prior analytics launches).
- Microsoft states it's selling over 90K new Azure subscriptions per month, and that over 40% of its Azure revenue comes from startups and independent software firms. Synergy Research estimates Azure's revenue rose 96% Y/Y in Q1, and that its IaaS/PaaS share is around 10% (#2 behind Amazon's 29%).
- Others news: 1) Microsoft has named its anticipated Spartan browser (ships with Windows 10) Edge. 2) The company predicts Windows 10 will be installed on 1B devices (inc. smartphones/tablets and the Xbox One) in 2-3 years. 3) Windows Holographic, Microsoft's platform for building HoloLens headset apps, has officially launched.
Fri, Apr. 24, 2:32 PM
- "By calendar 2016, we believe organic [constant currency] growth returns to low single digits with growing cloud business and earnings growth can potentially be restored to 10% or so with the leverage of share repurchase, and continued strong cash flow generation," writes Nomura's Rick Sherlund, upgrading Microsoft (NASDAQ:MSFT) to Buy following its FQ3 beat. His target remains at $50.
- Sherlund, who downgraded in January on account of Microsoft's FQ2 numbers, still thinks the company will be in a transition period for a few quarters, and notes certain core businesses (e.g. Windows, traditional Office licenses) were soft. However, he thinks total Office revenue (traditional + 365) could start rising again in 2016 "given high interest and migrations among business users to Office 365 and new cross platform productivity tools for Windows, iOS and Android."
- "In our view, Microsoft is well ahead of its large cap value peer group in the transition to the cloud," says UBS' Brent Thill (Buy, $50 target). Pac Crest's Brendan Barnicle (Outperform, $50 target) observes Office 365 still covers less than 10% of the Office installed base, leaving plenty of room for growth. He estimates Azure is on a $1.5B/year revenue rate (compares with $5.16B in trailing revenue for AWS and a $6.3B/year run rate for Microsoft's broader commercial cloud ops).
- On the CC (transcript), CFO Amy Hood stated Microsoft's FY15 (ends in June) opex guidance ($32.4B-$32.5B) is now $2B lower than where it initially was. Adjusting for forex and the Nokia deal, opex rose just 1% Y/Y in FQ3 thanks to job cuts. Meanwhile, Satya Nadella mentioned Office iOS/Android app downloads have topped 100M.
- Prior Microsoft earnings coverage
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Microsoft Corp is engaged in designing, manufacturing, selling devices, and online advertising to a global customer audience. Its products include operating systems for computing devices, servers, phones, and other intelligent devices.
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