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Amazon eyes layoffs in human resources as it spends big on AI. (0:15) Daily AI use rises. (1:16) Fund managers see AI bubble as the biggest risk. (3:09)
This is an abridged transcript of the podcast:
Our top story so far, the rise of the machines marches on.
Amazon (NASDAQ:AMZN) is prepping for layoffs as it spends big on AI.
Fortune says the company plans to lay off as much as 15% of its human resources division – while at the same time bolstering its AI resources.
Amazon also plans to spend more than $100 billion this year expanding its cloud and AI data centers. CEO Andy Jassy has signaled that automation and AI are likely to shrink some white-collar roles in the years ahead, calling on employees to adapt to the evolving landscape.
Also in the AI space, an investment consortium that includes BlackRock (BLK), Nvidia (NVDA), xAI (X.AI) and Microsoft (MSFT) is planning a $40 billion takeover of one of the world’s largest data center operators.
The FT says the consortium will acquire Texas-based Aligned Data Centers from Macquarie Asset Management in its first deal since the collaboration was formed a year ago. Funding will come from the group’s $100 billion data center pool.
Meanwhile, Intel (INTC) announced its new data center AI chip, Crescent Island, set to launch next year. The GPU is designed for energy efficiency and AI inference workloads.
Wedbush says U.S. consumers are now more open to generative AI tools, with daily use rising sharply. In its latest survey of about 1,000 people, about 39% now use generative AI tools every day, up from 32% in the second quarter.
Google’s (GOOG) (GOOGL) Gemini continues to gain traction, with 35% of those surveyed saying they had used it in the past three months. That’s ahead of OpenAI’s ChatGPT at 32% and Meta AI at 19%.
And Walmart (WMT) is having its ChatGPT moment.
Customers can now initiate a query, shop items and check out seamlessly, building on the Sparky AI shopping assistant.
Jefferies analyst Corey Tarlowe said the move enhances convenience while reinforcing its value proposition of assortment, price and speed.
On the earnings front, banks continue to report results that you can take – well – to the bank.
Bank of America (BAC) beat estimates as every line of business demonstrated top- and bottom-line improvement. The bank also forecast Q4 net interest income above expectations.
And Morgan Stanley (MS) posted a strong beat, bolstered by strong investment banking and equities activity.
Meanwhile, Abbott Labs (ABT) fell short of Street forecasts for revenue and the company narrowed its full-year earnings outlook.
Dollar Tree (DLTR) reaffirmed its near-term guidance, saying same-store sales growth is up 3.8% so far in fiscal Q3.
And HSBC upgraded Nvidia (NVDA) to Buy from Hold, expecting the AI GPU total addressable market to keep increasing beyond hyperscalers, leading to continuous earnings growth. Analyst Frank Lee bumped up his price target to $320 from $200.
In other news of Note, since 1865, London’s taxi drivers have had to pass a rigorous test of the quickest routes through the city – known as The Knowledge. But what happens when all that knowledge is in ones and zeroes?
Londoners will find out next year when Waymo launches its driverless ride-hailing service in the U.K. capital – its first foray into Europe.
The Google (GOOG) (GOOGL)-owned service will test a small fleet with safety drivers across a 100-square-mile area in the coming months.
Unlike in U.S. cities, where it partners with Uber (UBER) and Lyft (LYFT), Waymo intends to operate through its own app in London,
And in the Wall Street Research Corner, are fund managers hearing echoes from the dot-com era?
For the first time ever, fund managers responding to BofA’s monthly survey said an AI bubble is the largest market tail risk. A third of respondents said it’s their top concern — a sharp increase from just 11% in September.
In addition, 54% of respondents said AI stocks are in a bubble – a jump from 41% last month.
Other tail risks sparking concern are a second wave of inflation, the Fed losing independence and a U.S. dollar debasement, a disorderly rise in bond yields, geopolitical conflicts and a trade war that triggers a recession.
Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.