Latest news with #monetization
Yahoo
3 days ago
- Business
- Yahoo
'It's more likely they'll lose money': One strategist on why he's bearish on the AI trade
The AI hype is strong in markets, but BCA Research's Peter Berezin has his doubts. AI's high costs and competition hinder monetization despite potential productivity gains. AI could mirror the progression of other industries that produce economically useful but low-margin businesses. Nearly three years after the launch of ChatGPT, the AI hype is still in full force as the biggest tech companies continue to shell out billions to build out their AI infrastructure. Nvidia, meanwhile, hit a fresh all-time high this week, and some analysts see the gains piling up to push the premier AI chipmaker to a $6 trillion valuation. But will investors see the billions in AI capex pay off? Peter Berezin, chief global strategist at BCA Research, thinks not. "It's more likely they'll lose money," Berezin told Business Insider, referring to Big Tech companies spending big on the technology. It's been hard to bet against the biggest trade in the stock market and its promise to turbocharge economic productivity. Investors quickly shook off the DeepSeek disruption earlier this year, and Big Tech companies plan to spend over $300 billion on AI investment. The rally in tech powered the Nasdaq 100 to record highs this week. Still, Berezin thinks the market is missing the bigger picture. AI technology is tremendously expensive, and he sees monetization opportunities as slim. While AI certainly could boost productivity, that's no guarantee that higher profits will follow. Venture capitalist Peter Thiel famously said "competition is for losers," and Berezin agrees with this sentiment. "You don't make money in a competitive market. You make money as an investor in a monopolistic market. AI, so far, is very, very competitive, and that's a problem for investors in that area," Berezin said. "If everybody can do it, then how do you charge money for it? OpenAI was bragging a few months ago about how they're actually losing more money than expected on their latest model, but to them that was a good thing because people were using it so much. The presumption here, of course, is that if they're using it, they're eventually going to pay for it," Berezin added. "But why would they pay for it if Anthropic, if X, if DeepSeek, and many other companies now are offering similar products like this?" It's not just the AI startups that are engaged in an AI arms race. Berezin points to the Magnificent Seven's capex spend as another example of fierce competition threatening profits. He sees Big Tech's billion-dollar checks as a defensive investment to maintain market share, not an offensive strategy to expand it. At best, Berezin thinks these companies are investing in AI to maintain their current competitive standing, but there's a real possibility that some could lose their market dominance. Undeniably, many Nvidia investors have already made a lot of money, but that's more of a testament to the chipmaker's near-monopoly on GPUs and less so a reflection of sustainable, broad-based AI monetization. Unless there's more consolidation in other parts of the AI ecosystem, Berezin isn't optimistic that the AI trade will pay off. Another key part of the AI bull thesis hinges on the possibility that AI could unlock massive efficiencies across every sector of the economy. While Berezin doesn't deny this potential, this outcome might not be a boon for shareholders, either. Big-box retailers adopted IT technologies in the 1990s that led to productivity gains, but since these technologies were widely adopted, the competitive advantage was neutralized, resulting in lower prices for the consumer without a corresponding increase in profit margins, according to Berezin. "You can increase productivity from using AI, but if everybody else is also increasing productivity from using AI and competing in the same market, then what you end up with is lower prices, but not higher margins," Berezin said. In his opinion, the AI industry is likely on track to become something that looks like the airline industry: capital intensive, critical for the economy, but very low margin. "I think that's the risk with AI, that the benefits of AI filter down more to the users of AI rather than the producers, which historically has been the case for most technological innovations," Berezin said. Read the original article on Business Insider 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
Globe and Mail
4 days ago
- Business
- Globe and Mail
Bull of the Day: AppLovin (APP)
AppLovin ( APP ), a leading ad-tech platform powering mobile app monetization and user acquisition, has emerged as one of the most explosive growth stories in the tech sector over the past few years. Fueled by surging demand for performance-based advertising and advanced machine learning capabilities, the company has carved out a highly profitable position in a rapidly growing industry. The stock has delivered a staggering return of over 1,300% in just two years, rewarding early believers with outsized gains. And notably, the Zacks Rank was ahead of the curve, as APP held a top Zacks Rank for much of that historic run, flagging strong earnings momentum well before the broader market caught on. Following such a meteoric rise, shares have traded sideways over the past eight months as the valuation cooled and profit-taking set in. But now, with the stock consolidating and fundamentals continuing to strengthen, the setup is once again turning bullish. Earnings growth remains robust, and analysts have issued substantial upward revisions to estimates, indicating strong turn higher in sentiment. With momentum building, AppLovin looks ready for its next leg higher. Can Earnings Upgrades Propel AppLovin Stock Higher Again? Over the past two months, AppLovin has received some of the most significant upward revisions that I have seen in a tech stock. Analysts have raised their forecasts by nearly 30% across timeframes, an unusually sharp and unanimous upgrade that has propelled APP to a Zacks Rank #1 (Strong Buy). What makes these upgrades even more compelling is AppLovin's impressive track record of outperforming expectations. The company has surpassed earnings estimates in each of the last four quarters, with an average surprise of 23%. That history suggests that even after these aggressive revisions, current estimates may still be conservative. Looking ahead, earnings are projected to grow by a remarkable 88.5% in 2025, followed by another strong year of 41.1% growth in 2026. Revenue is also expected to expand at an accelerating pace, rising 16.6% this year and 20.4% next year. With both top- and bottom-line momentum and continued bullish analyst sentiment, AppLovin's next leg higher may already be taking shape. AppLovin Stock Breaks Out from Technical Pattern After experiencing a sharp correction between February and April, AppLovin stock has been quietly forming a classic cup and handle pattern, a bullish technical formation that often precedes significant upward moves. This pattern typically reflects a period of consolidation and accumulation following a strong prior uptrend. On Tuesday, the stock appeared to break out decisively above the handle's upper resistance level, signaling a potential resumption of its broader uptrend. This breakout is another encouraging sign that investor conviction is returning. As long as APP holds above this key breakout level, the technical setup suggests increasing momentum and the potential for continued buying pressure. If the pattern plays out in full, the measured move could imply substantial upside from current levels, reinforcing the bullish case already supported by earnings strength and analyst upgrades. AppLovin Shares Trade at a Premium Valuation AppLovin is not a cheap stock by any stretch. The shares currently trade at 40.6x forward earnings, which is above the industry average, but notably still below the company's three-year median valuation of 49.3x. This elevated multiple reflects the market's recognition of AppLovin's robust earnings growth, strong cash flow, and dominant position within the ad-tech ecosystem. While the valuation may give pause to traditional value investors, it remains within a reasonable range for high-growth, high-momentum tech names. For active traders and investors who focus on growth and momentum strategies, AppLovin's premium multiple may be justified by its consistent earnings beats, accelerating revenue growth, and recent bullish breakout on the charts. In this context, the stock's valuation, though rich, is not absurd, especially if the company continues to deliver on its aggressive growth trajectory. Should Investors Buy Shares in APP? With strong earnings momentum, bullish estimate revisions, and a breakout from a bullish technical pattern, AppLovin is showing all the right signals for a potential move higher. While the stock trades at a premium, its growth outlook and execution may justify the valuation. For investors focused on momentum and growth, AppLovin looks like a timely opportunity to ride the next leg of its rally. Research Chief Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months. Free: See Our Top Stock And 4 Runners Up AppLovin Corporation (APP): Free Stock Analysis Report
Globe and Mail
6 days ago
- Business
- Globe and Mail
Pinterest Remains Plagued by Margin Woes: Can it Buck the Trend?
Pinterest, Inc. PINS generates significant revenues by delivering ads on its website and mobile applications. The company is helping advertisers reach millennials and the Gen Z audience who are more active on immersive mobile platforms. However, despite healthy demand trends, net sales are often affected by seasonality, and despite signs of stabilization, the recovery of the digital ads market remains uneven. The company's global presence also exposes it to foreign exchange fluctuations. The company expects operating expenses to increase substantially in the near term as it expands operations both domestically and internationally, enhances its product offerings, broadens its user and advertiser base, expands marketing channels, hires additional staff and develops new technology. Increased infrastructure spending related to user and engagement growth is likely to result in higher costs of revenue. Total costs and expenses increased 12.1% year over year in the first quarter of 2025, owing to higher research and development expenses. Our estimate for total costs and expenses for the June quarter is pegged at $937.7 million, implying year-over-year growth of 7.1%. Pinterest is prioritizing investments to augment user engagement and monetization (such as improving the visual search capabilities), improve the technology that underpins the ad-serving efficiency (such as whole page optimization and Performance+) and accelerate employee productivity. The company has begun testing productivity tools to automate repetitive tasks and standardize content for the sales force, allowing sellers to spend more time with clients. Although these initiatives are likely to affect near-term profitability, it is expected to help reach its long-term margin goals. Other Tech Firms Hurt by Margin Issues Snap Inc. SNAP is affected by lackluster user growth as it primarily focuses on the younger demographic and fails to attract the older generation (above 35-year-olds). Moreover, lack of revenue diversification is a major concern for Snap. Advertising is its only source of revenues, which is suffering from continuous decline in price per ad impression. Moreover, decelerating growth in advertising revenues following the backlash on redesign remains an overhang on the stock. Snap's hardware product Spectacles has not yet been able to generate significant revenues. Meta Platforms, Inc. 's META focus on Reels, which generates lower revenues than Stories and News Feed, has affected profitability to some extent. As the company continues to ramp up investments in products (Video, AR/VR and AI) as well as security, costs are on the rise, hurting margins. Meta plans to spend $60–65 billion in AI infrastructure investments in 2025 — up nearly 50% year over year — which places significant pressure on gross and operating margins. Moreover, a lion's share of Meta's revenues is generated from advertising, making it highly susceptible to economic slowdowns. In addition, tariffs and digital services taxes could reduce ad spending by advertisers who rely heavily on Meta platforms. PINS' Price Performance, Valuation and Estimates Pinterest has declined 24.4% over the past year against the industry 's growth of 35.1% From a valuation standpoint, Pinterest trades at a forward price-to-sales ratio of 5.2, below the industry. The Zacks Consensus Estimate for Pinterest's earnings for 2025 has increased over the past 60 days. Pinterest currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Snap Inc. (SNAP): Free Stock Analysis Report Pinterest, Inc. (PINS): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis Report
Japan Times
7 days ago
- Business
- Japan Times
Japan aims to regulate social media monetization in disasters
An internal affairs ministry working group Monday unveiled a draft interim report underlining the need for the government to consider a legal system aimed at regulating social media monetization during natural disasters. The report calls on social medial service providers to introduce voluntary regulations designed to suspend monetization in the event of a disaster, to curb the spread of disinformation. The working group plans to ask industry groups to draw up a code of conduct by the end of the year to prevent the spread of disinformation in such situations. It also urged businesses to take measures such as attaching labels to images created by generative artificial intelligence. Social media posts are rewarded based on the number of viewers. For this reason, it has been regarded as a problem in recent years that even false information can become a source of revenue.
Yahoo
7 days ago
- Business
- Yahoo
From Shopify To Polar: Birk Jernström Raises $10M To Help Devs Build AI-Driven One-Person Unicorns, Backed By Startup Giants
Birk Jernström, the founder of Polar and former head of product at Shopify's (NASDAQ:SHOP) Shop app, has raised a $10 million seed round to fuel a platform built for solo developers aiming to scale globally. Polar announced the round on Thursday, which was led by Accel and joined by prominent angels including Shopify CEO Tobi Lütke, Shopify President Harley Finkelstein, and leaders from Vercel, Supabase, Raycast, Resend, and WorkOS, among others. Polar launched publicly in September and now reports more than 17,000 users, 5,300 GitHub stars, and a Discord community of 1,500 active contributors. "There is a new generation of AI-native, early-stage businesses that want to grow without distractions," Accel partner Andrei Brasoveanu, who led the funding, told TechCrunch. Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — Peter Thiel turned $1,700 into $5 billion—now accredited investors are eyeing this software company with similar breakout potential. Learn how you can Polar describes its platform as a complete monetization engine tailored to AI-era software startups, particularly those launched by solo developers, saying that it acts as the merchant of record, handling taxes, compliance, fraud, and global checkout infrastructure, allowing founders to focus on their product. Polar is open-source and designed to be implemented with just four lines of code, appealing to developers seeking low-lift infrastructure solutions. According to the statement, Polar supports usage-based billing, automatic event ingestion from OpenAI and Vercel SDKs, and automates license management for SaaS entitlements. TechCrunch says that the rise of AI-first tools has made it increasingly possible for solo developers to build and scale companies that once required full teams and large budgets. One-person startups, once seen as a rarity, are now emerging across the tech industry with serious momentum. Trending: Maximize saving for your retirement and cut down on taxes: . Jernström told TechCrunch that Polar is a "monetization platform to empower one-person unicorns," offering infrastructure that supports billing, compliance, and global sales from day one. Polar's monthly revenue growth reportedly exceeds 120%, fueled by rising demand from developers using platforms like Supabase and Vercel to build AI-first applications. Jernström is no stranger to product-led growth. He co-founded Tictail, a platform for indie merchants that was acquired by Shopify in 2018 for $17 million. TechCrunch says that he later helped lead the development of the Shop Pay ecosystem within Shopify, eventually stepping away in 2021 to start Polar. "In 2011, we started Tictail with the mission of empowering anyone to start an online store. We launched in 2012 and it quickly took off," Jernström told TechCrunch. "In a couple of years, we were home to 100,000+ merchants on the platform, very much on the long tail."His hands-on approach hasn't changed. "I answer more than 50 or 60 support tickets a day. I know every single customer that we work with," Jernström told the outlet. According to Polar, the new funding will be used to expand the startup's remote-first team across Europe, with new hires focused on developer relations, product engineering, and platform partnerships. With strong early adoption and support from high-profile investors, Polar is targeting a future where billion-dollar businesses can be built by a single developer. Read Next: Here's what Americans think you need to be considered wealthy. Image: Shutterstock UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? This article From Shopify To Polar: Birk Jernström Raises $10M To Help Devs Build AI-Driven One-Person Unicorns, Backed By Startup Giants originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
