Will Your Gen AI Strategy Shape Your Future or Derail It?
By studying 100 brand implementations of gen AI, researchers have discovered four archetypes for how companies are using the technology strategically. Bold innovators seek to reshape their markets with gen AI. Disciplined integratorsfocus on trust,...more
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Yahoo
22 minutes ago
- Yahoo
Spotify set to report earnings as investor optimism meets cautious guidance
Spotify (SPOT) is set to report second quarter earnings on Tuesday before the bell as investors weigh the music streamer's long-term monetization potential against softer near-term guidance. Shares have climbed roughly 120% over the past 12 months — a sharp rebound from record lows of 2022, driven by price hikes, a leaner cost structure, and growing investor enthusiasm around artificial intelligence and advertising. The stock hit a record high of $738.45 earlier this month, though it has since come off those levels ahead of Tuesday's report. Spotify's massive rally has followed a sweeping business overhaul, including layoffs, leadership changes, and a pullback from costly podcast exclusivity. After spending $1 billion to build out its podcast business, the company has since scaled back and narrowed its focus. Still, it remains committed to the medium, paying over $100 million to creators in Q1 alone, including high-profile names like Joe Rogan and Alex Cooper. Here's what Wall Street expects from the upcoming results, according to Bloomberg consensus estimates: Revenue: €4.27 billion versus €3.81 billion in Q2 2024 Adjusted earnings per share: €1.97 versus €1.33 in Q2 2024 Total monthly active users (MAUs): 689 million versus 626 million in Q2 2024 Premium subscribers: 273 million versus 246 million in Q2 2024 Ad-supported users: 428 million versus 393 million in Q2 2024 Gross margin: 31.5%, in line with Spotify's guidance In April, Spotify reported first quarter MAUs of 678 million, narrowly missing consensus estimates. Premium subscribers rose 12% to 268 million, the strongest Q1 increase since 2020. However, its second quarter guidance for MAUs, operating income, and gross margins fell short of analyst expectations. 'The short term may bring some noise," Spotify CEO Daniel Ek said in the earnings release. "But we remain confident in the long-term story, and the direction we're heading in feels clearer than ever." At the company's 2022 Investor Day, Spotify set seemingly lofty objectives that included long-term gross margin targets between 30% and 35%. At the time, the company had been struggling to turn a profit, with its gross margin stuck at around 25%. Those trends began to reverse in 2024 as the company raised prices for the second time in less than a year and introduced a higher-priced audio "bundle" that includes music, podcasts, and audiobooks. It also rolled out an audiobooks-only plan and a music-only streaming tier in an effort to cater to a variety of consumers. Margins hit a record 32.2% in Q4 but slipped to 31.6% in Q1, with the company guiding to 31.5% for Q2 due to ad seasonality and higher content costs. Analysts have cautioned that margin expansion may slow this year following a 500-plus basis point gain in 2024. Additionally, the company's recently renewed deals with several of the largest music labels are expected to slightly weigh on future results. Citi analyst Jason Bazinet maintained a Neutral rating heading into the print, cautioning that third quarter guidance may disappoint after the stock's massive 30% run since Q1. Bazinet did raise his price target from $690 to $780 "to better align with streaming peers." Others on the Street are more optimistic. Oppenheimer analyst Jason Helfstein upgraded Spotify to Outperform ahead of the report and established an $800 price target, citing "many tailwinds ahead." He pointed to a long runway for user growth, improved free-tier monetization, App Store-driven conversion gains, a potential Superfan tier, and stronger free cash flow. Morgan Stanley analyst Ben Swinburne echoed the bullish tone, naming Spotify among his top AI beneficiaries alongside Netflix (NFLX) and YouTube (GOOGL, GOOG). 'Gen AI's long-term impact on the creation, distribution, and monetization of content is likely profound,' Swinburne wrote in a July 10 client note. 'AI and machine learning have left Spotify a leader in music discovery. Gen AI could help it take discovery to new levels and across new content verticals.' He maintained his Overweight rating and raised his base case price target to $850 and bull case to $1,200. Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
22 minutes ago
- Yahoo
Analyst Think Rtx (RTX) Among Top Beneficiaries of Increasing Defense Budgets
Rtx Corp (NYSE:RTX) is one of the . Citi's Jason Gursky said in a recent program on CNBC that increasing defense budgets in the US and Europe are likely to help several major defense companies, including Rtx Corp (NYSE:RTX). 'It's hard not to like both defense and aerospace. Heading into earnings next week, we're particularly constructive on defense names. Rising budgets in the U.S. and Europe are providing strong visibility for these companies.' Asked which companies stand to benefit the most from Congress's defense policy bill, the analyst named Rtx Corp (NYSE:RTX) among the companies positioned to benefit 'front and center.' 'Honestly, I think it's a rising tide for everyone. But if you look at the president's priorities—air and missile defense, Iron Dome, etc.—the key beneficiaries are the missile makers. RTX and Northrop are front and center.' Photo by Somchai Kongkamsri from Pexels ClearBridge Large Cap Value Strategy stated the following regarding RTX Corporation (NYSE:RTX) in its Q1 2025 investor letter: 'In industrials, defense names RTX Corporation (NYSE:RTX) and Northrop Grumman led performance as geopolitical tensions remained elevated. Both companies have moved away from fixed-price contracts, and as those contracts have diminished as parts of their business, should see margin expansion over the next few years. European countries have also pledged to increase their spending on defense, which, given the lack of capacity available for European defense companies, should benefit U.S. defense primes.' While we acknowledge the potential of RTX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey.
Android Authority
24 minutes ago
- Android Authority
Miss the Xperia Play? A new Android gaming phone is coming, and it slides like it's 2011
Nick Fernandez / Android Authority TL;DR AYANEO announced it's making a gaming phone with a physical sliding design, similar to the Xperia Play. The phone was teased during a livestream, but no specs, images, or release date were revealed. The move follows the expiration of the sliding phone patent and comes amid several other AYANEO hardware announcements. AYANEO is branching out in an exciting way. At the end of a four-hour livestream packed with announcements, the company revealed it's working on its first smartphone, which will have a physical slider in a similar concept to the old Xperia Play. There's no release date, no specs, and no images of the actual device yet, but AYANEO teased the gaming phone concept with a few slides and slogans like 'you'll feel the difference' and 'the magic lies in the slide.' The announcement came in a segment called 'One more thing III,' which pretty much tells you how packed the event already was. AYANEO The company didn't show anything beyond a silhouette, but the implication is that this will be a gaming phone with physical controls that slide out — something we've been waiting to see since the Xperia Play or, more recently, the ANBERNIC RG Slide. That device launched soon after the patent for sliding phones expired, and AYANEO now seems to be following suit. AYANEO has been busy lately. Earlier in the same livestream, it showed off the dual-screen Pocket DS Android handheld, as well as a Game Boy-style vertical console and a new budget sub-brand called KONKR. The new phone feels part of a broader push into different form factors. It's not a huge leap, considering AYANEO already makes high-end Android handhelds. For now, there's not much to go on besides that it exists and is in development. But if the final product delivers, it could be a big deal for mobile gamers. We'll watch for more details as they arrive, and it's worth keeping an eye out for a blog post about the livestream on the company's news center. Follow
