Latest news with #Salt Lake City
Yahoo
6 days ago
- Business
- Yahoo
Alphabet Boosted by AI, Cloud Demand as Spending Needs Jump
(Bloomberg) -- Alphabet Inc. said demand for artificial intelligence products boosted quarterly sales, and now requires an extreme increase in capital spending — heightening pressure on the company to justify the cost of keeping up in the AI race. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Google's parent company said 2025 capital expenditures will be $85 billion, or $10 billion greater than an earlier forecast. Although Alphabet beat expectations for second-quarter revenue and profit, its stock initially sank in after-hours trading, then rebounded after Chief Executive Officer Sundar Pichai explained that the investments are necessary in order to keep up with customer needs. 'Our AI infrastructure investments are crucial to meeting the growth in demand from cloud customers,' he said on a call Wednesday following the report. As Microsoft Corp., startup OpenAI, Meta Platforms Inc. and others continue to pour money into AI, Alphabet has little choice but to follow suit, analysts said. The race is particularly urgent for Google: competitors are building chatbots that may eventually appeal to consumers more than its flagship search product. 'Google's hand is forced by OpenAI to spend tremendously on AI's infrastructure and applications,' said Nikhil Lai, an analyst at Forrester. Alphabet shares rose as much as 2.8% in premarket trading on Thursday. They'd closed 0.6% lower at $190.23 in New York trading on Wednesday and have gained about 10% in the last 12 months. The recent quarter was strong almost across the board for Alphabet. Sales, excluding partner payouts, climbed to $81.7 billion, Alphabet said in a statement, topping analysts' projections of $79.6 billion on average, according to data compiled by Bloomberg. Alphabet is counting on its core search advertising juggernaut and growing cloud computing business to support its spiraling spending on AI. Employees are under pressure to bring AI products to market faster, from new modes of search to tools for cloud customers. 'We are seeing significant demand for our comprehensive AI product portfolio,' Pichai said. Chief Financial Officer Anat Ashkenazi said capital expenditures will rise yet again next year, without providing details. The strain of the AI race could be spotted elsewhere in the company's results. Ashkenazi attributed the company's 16% jump in spending on research and development to increases in pay packages for key employees. Meta has been making unprecedented compensation offers as it seeks to woo researchers for its superintelligence lab, driving up the price for key employees across the industry. Earlier this month, Google struck a deal to pay about $2.4 billion for top talent and licensing rights from artificial intelligence coding startup Windsurf. Yet money isn't the only consideration for researchers when deciding where to work, Pichai said. Top talent in the field want 'to really be at the frontier driving progress,' in addition to craving access to computing power and talented peers, Pichai said. 'It's a combination of all of that and using it to drive impact. And I think we are pretty competitive on all those fronts.' Google's cloud-computing unit reported quarterly revenue of $13.6 billion and operating income of $2.83 billion, topping analysts' projections. Google remains in third place in this market, after Microsoft and Inc., but the company's prowess in AI has helped it score client wins. The unit is widely viewed as Alphabet's strongest source of growth as the main search business matures. The centerpiece of the cloud offensive is Gemini, the AI model that Google is rapidly weaving across its vast product portfolio, and pushing to enterprise clients. Many AI experts were impressed by the release of a new version of the Gemini model earlier this year, but it still trails OpenAI's ChatGPT in adoption by most estimates. As Google faces mounting competition, it's also facing penalties for being dominant. Google's primary businesses are under threat of a breakup after US federal judges ruled that the company is maintaining illegal monopolies in search and some ad technology. Next month, Judge Amit Mehta is expected to deliver an order on the measures Google must take to restore competition in online search, though Google has said it plans to appeal the ruling. YouTube, Google's video site, posted $9.8 billion in second-quarter ad revenue, exceeding analysts' estimates of $9.56 billion. The unit, which draws most of its revenue from advertising, was expected to perform well thanks to its lead in living-room streaming and heavy investments in podcasts. Alphabet's Other Bets, a collection of futuristic businesses that includes the self-driving car effort Waymo, generated $373 million in revenue, missing estimates for $429.1 million. Ashkenazi said Alphabet will continue devoting more resources to Waymo. Alphabet has been aggressively expanding the operations of Waymo, which may soon face increased competition as Tesla ramps up its robotaxi business. Earlier this month, Waymo more than doubled its service area in Austin, Tesla Inc.'s home base, and said it would start collecting data in New York City in pursuit of a permit for testing. 'The team is testing across more than 10 cities this year, including New York and Philadelphia,' Pichai said. 'We hope to serve riders in all 10 in the future.' Google isn't alone in feeling pressure to show success from AI investment. Shortly after Pichai's Waymo comments, on the Tesla earnings call, Chief Executive Officer Elon Musk started slamming Google's AI prowess. He said Tesla was 'actually much better than Google.' Investors might disagree; Tesla's shares fell. (Updates with premarket share move in fourth paragraph) Burning Man Is Burning Through Cash Elon Musk's Empire Is Creaking Under the Strain of Elon Musk It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan A Rebel Army Is Building a Rare-Earth Empire on China's Border What the Tough Job Market for New College Grads Says About the Economy ©2025 Bloomberg L.P.
Yahoo
6 days ago
- Business
- Yahoo
Alphabet Boosted by AI, Cloud Demand as Spending Needs Skyrocket
(Bloomberg) -- Alphabet Inc. said demand for artificial intelligence products boosted quarterly sales, and now requires an extreme increase in capital spending — heightening pressure on the company to justify the cost of keeping up in the AI race. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Google's parent company said 2025 capital expenditures will be $85 billion, or $10 billion greater than an earlier forecast. Although Alphabet beat expectations for second-quarter revenue and profit, its stock initially sank in after-hours trading, then rebounded after Chief Executive Officer Sundar Pichai explained that the investments are necessary in order to keep up with customer needs. 'Our AI infrastructure investments are crucial to meeting the growth in demand from cloud customers,' he said on a call Wednesday following the report. As Microsoft Corp., startup OpenAI, Meta Platforms Inc. and others continue to pour money into AI, Alphabet has little choice but to follow suit, analysts said. The race is particularly urgent for Google: competitors are building chatbots that may eventually appeal to consumers more than its flagship search product. 'Google's hand is forced by OpenAI to spend tremendously on AI's infrastructure and applications,' said Nikhil Lai, an analyst at Forrester. The recent quarter was strong almost across the board for Alphabet. Sales, excluding partner payouts, climbed to $81.7 billion, Alphabet said in a statement, topping analysts' projections of $79.6 billion on average, according to data compiled by Bloomberg. Alphabet is counting on its core search advertising juggernaut and growing cloud computing business to support its spiraling spending on AI. Employees are under pressure to bring AI products to market faster, from new modes of search to tools for cloud customers. 'We are seeing significant demand for our comprehensive AI product portfolio,' Pichai said. Chief Financial Officer Anat Ashkenazi said capital expenditures will rise yet again next year, without providing details. The strain of the AI race could be spotted elsewhere in the company's results. Ashkenazi attributed the company's 16% jump in spending on research and development to increases in pay packages for key employees. Meta has been making unprecedented compensation offers as it seeks to woo researchers for its superintelligence lab, driving up the price for key employees across the industry. Earlier this month, Google struck a deal to pay about $2.4 billion for top talent and licensing rights from artificial intelligence coding startup Windsurf. Yet money isn't the only consideration for researchers when deciding where to work, Pichai said. Top talent in the field want 'to really be at the frontier driving progress,' in addition to craving access to computing power and talented peers, Pichai said. 'It's a combination of all of that and using it to drive impact. And I think we are pretty competitive on all those fronts.' Google's cloud-computing unit reported quarterly revenue of $13.6 billion and operating income of $2.83 billion, topping analysts' projections. Google remains in third place in this market, after Microsoft and Inc., but the company's prowess in AI has helped it score client wins. The unit is widely viewed as Alphabet's strongest source of growth as the main search business matures. The centerpiece of the cloud offensive is Gemini, the AI model that Google is rapidly weaving across its vast product portfolio, and pushing to enterprise clients. Many AI experts were impressed by the release of a new version of the Gemini model earlier this year, but it still trails OpenAI's ChatGPT in adoption by most estimates. As Google faces mounting competition, it's also facing penalties for being dominant. Google's primary businesses are under threat of a breakup after US federal judges ruled that the company is maintaining illegal monopolies in search and some ad technology. Next month, Judge Amit Mehta is expected to deliver an order on the measures Google must take to restore competition in online search, though Google has said it plans to appeal the ruling. YouTube, Google's video site, posted $9.8 billion in second-quarter ad revenue, exceeding analysts' estimates of $9.56 billion. The unit, which draws most of its revenue from advertising, was expected to perform well thanks to its lead in living-room streaming and heavy investments in podcasts. Alphabet's Other Bets, a collection of futuristic businesses that includes the self-driving car effort Waymo, generated $373 million in revenue, missing estimates for $429.1 million. Ashkenazi said Alphabet will continue devoting more resources to Waymo. Alphabet has been aggressively expanding the operations of Waymo, which may soon face increased competition as Tesla ramps up its robotaxi business. Earlier this month, Waymo more than doubled its service area in Austin, Tesla Inc.'s home base, and said it would start collecting data in New York City in pursuit of a permit for testing. 'The team is testing across more than 10 cities this year, including New York and Philadelphia,' Pichai said. 'We hope to serve riders in all 10 in the future.' Google isn't alone in feeling pressure to show success from AI investment. Shortly after Pichai's Waymo comments, on the Tesla earnings call, Chief Executive Officer Elon Musk started slamming Google's AI prowess. He said Tesla was 'actually much better than Google.' Investors might disagree; Tesla's shares fell. Burning Man Is Burning Through Cash Elon Musk's Empire Is Creaking Under the Strain of Elon Musk It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan A Rebel Army Is Building a Rare-Earth Empire on China's Border What the Tough Job Market for New College Grads Says About the Economy ©2025 Bloomberg L.P. 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
23-07-2025
- Business
- Yahoo
Meme-Stock Doubters Eye Hedge-Fund Strategy to Bet on Reversal
(Bloomberg) -- Barclays Plc says that it's about time to pump the brakes on a meme stock craze that's driven sharp rallies in companies like Kohl's Corp. and Opendoor Technologies Inc. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Milan Corruption Probe Casts Shadow Over Property Boom How San Jose's Mayor Is Working to Build an AI Capital Retail traders have been piling into these unlikely names and sending their shares soaring, showing a kind of fervor that harkens back to the mania around GameStop Corp. shares during the Covid-19 pandemic. But these stocks can fall as suddenly as they rise, which is why Stefano Pascale at Barclays says one potential tactic is a popular hedge-fund strategy known as the dispersion trade. It involves a combination of options in single stocks and contracts on a broad index like the S&P 500 Index. In this case, investors could use options to bet that a basket of meme stocks will continue to be far more volatile than the S&P 500. For traders wanting to take a more directional bet on the frothiest companies, they can buy puts that would benefit if these shares reverse course. 'There are certain corners of the market where it does feel very bubbly,' said Pascale, head of US equity derivatives strategy at Barclays. He and his colleague Anshul Gupta have been warning about untethered market exuberance since the start of July. They point to a rush of companies going public by merging with blank-check companies, as well as the rally in Cathie Wood's ARK Innovation ETF. The fund is bullish on a swath of tech stocks and is up 73% in the last three months. These are 'signs that we typically associate with a frothy market,' they wrote in July 1 note. Social media buzz has spurred an outsized rally in retailer Kohl's, which rose as much as 105% on Tuesday. Shares of Opendoor, a platform for buying and selling real estate, are up more than 440% since the start of the month. Mounting Euphoria Last week, the Barclays Equity Euphoria Indicator, which uses options data to quantify investors' giddiness, jumped to its highest level since late December. 'A lot of people may recognize that there is a bubble and they may recognize that in the end, they will have to unwind in some form or another,' Pascale said. The challenge facing traders is how to pick the losers. In a Monday note, Piper Sandler Cos. identified two stocks up significantly this year that could be dispersion-trade candidates. It's bearish on beverage maker Celsius Holdings Inc., which is up 68% in 2025 and trades at a lofty price-to-earnings ratio of 77.6. Another is NRG Energy Inc., up 71% this year. 'To me, the activity is starting to have much more of a 2021 feel to it,' said Interactive Brokers' chief strategist Steve Sosnick, referring to the peak of the GameStop frenzy. But Sosnick isn't convinced the dispersion trade is the right way to play the meme stock resurgence, because the companies involved aren't big components of gauges like the S&P 500. In the case of Opendoor, it's not a member of the benchmark index. That makes it harder to bet on divergences between individual names and the wider market. 'It might be more appropriate if we were discussing Nvidia, or Microsoft,' he said. 'In this case I think it is purely idiosyncratic.' Another challenge is predicting when stocks might fall. 'Bubbles can persist for a very, very long time, especially if there's liquidity being provided to the market,' said Barclays' Pascale. Elon Musk's Empire Is Creaking Under the Strain of Elon Musk Burning Man Is Burning Through Cash A Rebel Army Is Building a Rare-Earth Empire on China's Border Thailand's Changing Cannabis Rules Leave Farmers in a Tough Spot How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All ©2025 Bloomberg L.P. Sign in to access your portfolio
Bloomberg
22-07-2025
- Business
- Bloomberg
Salt Lake City Bets on Olympics to Spur Economic Overhaul
Salt Lake City is betting on the 2034 Winter Olympics to jumpstart a lasting economic transformation. Local governments and agencies issued more than $4 billion of municipal bonds this year, fueling a surge of development across the city, including an overhaul of its sports and entertainment arena, the Delta Center, and the area surrounding it. Some economists, however, question the long-term benefits of hosting the games, decrying potential gains as 'exaggerated' or, worse, 'nonexistent.' While investment is rolling in to boost tourism, Utah's housing shortage stands to constrain the region's economic growth. There are just 30 affordable and available homes for every 100 'extremely low-income' renter households statewide, and in Salt Lake City, the median home price has surpassed half a million dollars, putting homeownership out of reach for most residents, Arvelisse Bonilla Ramos reports. Today on CityLab:
Yahoo
22-07-2025
- Business
- Yahoo
FDA Rejects Replimune's Skin Cancer Treatment, Shares Sink
(Bloomberg) -- Replimune Group Inc. shares sank to their lowest point ever after US regulators rejected a skin cancer treatment from the biotech company, another sign of the agency's new leadership taking a hard line on drug approvals. Why the Federal Reserve's Building Renovation Costs $2.5 Billion Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom Milan Corruption Probe Casts Shadow Over Property Boom How San Jose's Mayor Is Working to Build an AI Capital The US Food and Drug Administration denied the company's application to treat advanced melanoma with a combination of its immunotherapy and another cancer drug. The agency said the company's trial 'is not considered to be an adequate and well-controlled clinical investigation that provides substantial evidence of effectiveness,' Replimune wrote in a statement. The FDA also had issues with the company's trial design and patient population. The company's shares plunged as much as 78% in Tuesday trading in New York. Replimune submitted its application in November under the FDA's accelerated approval pathway, which allows drugs for serious or life-threatening conditions to be approved based on early evidence of benefit. The company said in January that the drug had received priority review and the agency hadn't identified any potential review issues. Replimune said in the statement that it plans to 'urgently interact with the FDA to find a path forward.' In a note, BMO Capital Markets analyst Evan Seigerman called the FDA rejection 'the worst case scenario' for Replimune and it appeared that the new FDA leadership had a late change of opinion. 'This potential last minute change points to a changing tone at the agency, which is placing a greater emphasis on randomized controlled trials regardless of the patient population and availability of alternative treatment options,' Seigerman wrote. Vinay Prasad, the FDA's new chief medical and scientific officer, has previously been critical of approving drugs based on uncontrolled data, he said. In recent days, the FDA has also rejected treatments from Capricor Therapeutics Inc. and Ultragenyx Pharmaceutical Inc. (Updates with shares trading and additional context in the fifth paragraph.) Elon Musk's Empire Is Creaking Under the Strain of Elon Musk A Rebel Army Is Building a Rare-Earth Empire on China's Border Thailand's Changing Cannabis Rules Leave Farmers in a Tough Spot How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All What the Tough Job Market for New College Grads Says About the Economy ©2025 Bloomberg L.P.
