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Snap plummets 30% as earnings slide

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Snapchat announces new climate plan

Snap Inc saw its shares nosedive by 30% during Wednesday morning trading following its fiscal fourth-quarter earnings report, which missed revenue estimates and provided weak guidance.

The sharp decline comes as the social media giant faces challenges in rebounding from a tough advertising market in 2022, lagging behind competitors like Meta.

This downturn marks one of Snap’s worst days on the market since its debut in 2017, with previous significant drops of 43% in May 2022 and 39% two months later.

Despite reporting a quarterly revenue of $1.36 billion, slightly below analysts’ expectations of $1.38 billion, and an adjusted EPS of 8 cents versus the anticipated 6 cents, Snap continues to struggle with sluggish growth, marking its sixth consecutive quarter of either single-digit growth or sales declines.

Remain cautious

While Snap forecasts an uptick in growth for the first quarter, analysts remain cautious, with Morgan Stanley maintaining an underweight rating and lowering their price target to $11.

They cited Snap’s slower-than-expected ad turnaround and weak engagement, especially in comparison to the robust ad improvements observed at Meta and Amazon.

Snap attributed some of its challenges to external factors, noting that the conflict in the Middle East had a negative impact on year-over-year growth in the fourth quarter.

Despite these setbacks, Barclays analysts expressed optimism, maintaining an overweight rating and a $15 price target, likening Snap’s current state to Meta’s position five quarters ago, on the cusp of a recovery.

Underweight rating

JPMorgan analysts reiterated their underweight rating but raised the price target to $11, emphasizing the need for Snap to demonstrate stronger growth in engagement and its ad platform amidst the choppy recovery evident in its latest earnings and outlook.

In an interview on CNBC’s “Money Movers,” Snap CEO Evan Spiegel acknowledged the challenges but expressed confidence in the company’s trajectory, citing improved advertiser performance and increased revenue expectations. Spiegel also addressed Snap’s recent decision to reduce its workforce by around 10%, stating that the move aims to streamline operations and facilitate faster decision-making.

The market’s response to Snap’s earnings underscores investors’ concerns about the company’s ability to navigate the competitive landscape and deliver sustainable growth amid evolving advertising dynamics.

Ahron Young is an award winning journalist who has covered major news events around the world. Ahron is the Managing Editor and Founder of TICKER NEWS.

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Google CEO condemns AI blunders in staff memo

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In response to recent controversies surrounding Google’s artificial intelligence blunders, CEO Sundar Pichai issued a memo to employees, addressing the company’s missteps and outlining plans for improvement.

The memo comes after Google faced criticism for flaws in its Gemini image-generation feature, leading to the tool being taken offline for further testing. Pichai described the issues as “problematic” and acknowledged that they “have offended our users and shown bias,” according to reports first surfaced by Semafor.

The Gemini image generator, introduced earlier this month as part of Google’s main group of AI models, allows users to input prompts to create images.

However, users discovered historical inaccuracies in the generated images, prompting widespread backlash online.

Consequently, Google removed the feature last week, stating its intention to relaunch it after addressing the issues.

Google Gemini

Pichai expressed regret over the offensive responses produced by the AI system, emphasising that such behavior is “completely unacceptable.”

He emphasised the challenges of developing AI technology, acknowledging that perfection is elusive, particularly in the nascent stages of the industry’s evolution.

Nevertheless, Pichai stressed that Google recognizes the high standards expected of them.

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Slack CEO has advice for turning off work notifications

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In an era dominated by constant connectivity, Slack CEO Denise Dresser emphasises the importance of setting boundaries to maintain a healthy work-life balance.

As leaders grapple with the challenges of an always-on culture, Dresser suggests that modeling certain behaviors can help alleviate the pressures faced by employees in today’s hyper-connected workplace.

Dresser, who assumed the CEO role last November, advocates for leaders to establish clear boundaries to prevent employees from feeling overwhelmed by the demands of modern work.

Rather than implementing new company policies, she believes that leaders can effectively shape the organisational culture by exemplifying healthy work practices.

Proactive measures

Victoria Mills, CEO of Hello Coach, echoes Dresser’s sentiments, emphasising the need for proactive measures to foster work-life balance.

Mills encourages her staff to disconnect by turning off notifications after 5pm and questions the necessity of installing work apps on personal devices.

Recognising the pervasive nature of technology, Mills underscores the importance of individuals taking control of their digital interactions. She advises employees to manage notifications and settings to prevent technology from dictating their lives.

In addition to individual efforts, Hello Coach implements company-wide initiatives to promote well-being, such as mandatory lunch breaks devoid of meetings or messages.

Mills believes that frequent breaks are essential for maintaining energy levels and productivity, particularly for employees spending prolonged hours in front of screens.

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Apple CEO Tim Cook announces AI timeframe

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In a recent announcement during Apple’s annual shareholder meeting, CEO Tim Cook revealed that the tech giant intends to provide more insight into its utilization of generative artificial intelligence later in the year.

Cook expressed Apple’s enthusiasm for the potential of generative AI, highlighting its capacity for breakthroughs in productivity and problem-solving.

Despite lagging behind competitors like Microsoft and Google in incorporating generative AI into products, Cook assured shareholders of Apple’s ongoing investment in this area.

“While AI is already integrated into Apple’s products behind the scenes, we are committed to unveiling more explicit AI features in the near future,” Cook stated.

Enhanced search

Apple’s plans reportedly include utilising AI to enhance data search capabilities across its devices, a move previously hinted at by Bloomberg.

Cook emphasised the prowess of Apple silicon-powered Macs as leading AI machines in today’s market.

However, shareholders voted against a proposal urging Apple to disclose further details about its AI practices and ethical guidelines.

The proposal, presented by the pension trust of AFL-CIO, America’s largest labor union federation, sought transparency regarding AI usage and ethical considerations within Apple’s operations.

Similar propositions have been raised at other tech firms, indicating growing concerns over AI ethics and transparency. AFL-CIO’s request specifically called for disclosures on AI training procedures and guidelines for utilizing copyrighted materials and personal likenesses.

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