© Reuters.
Written by Louis Jurich and Sarina Isaac
Investing.com — Here’s your weekly Pro Recap on the tech headlines everyone’s been buzzing about from this past week: Netflix subscriber numbers; Elon Musk’s position on advertising; Accelerate merger talks between Western Digital and Kioxia Holdings; alarming OpenAI head testimony in the Senate; And Ali Baba Earnings below average.
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Netflix reports strong ad-supported subscriber numbers
Netflix (NASDAQ:) said Wednesday that its new $7 per month ad-supported tier has reached nearly 5 million monthly active users, which is a significant increase from the ~1 million users reported by third parties.
The announcement was part of a larger presentation by management that made analysts more positive about the company. Oppenheimer praised the “advancement of the ad-tier”, and Evercore affirmed its superior rating as new updates showed that the ad-supported tier was “steadily gaining traction”.
Netflix also said that the ad tier now accounts for 25% of new subscribers in the respective geographies. The company’s management has told advertisers that its viewers are 4 times more likely to interact with an ad on Netflix than on other streaming platforms.
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Shares jumped 7.2% for the week, to $365.36.
Elon Musk of Tesla to look at the ad
During Tesla’s (NASDAQ:) annual shareholder meeting, Musk appeared to decide in real time to try to go public with its cars after years of resisting the idea. An investor at the meeting asked about a potential advertising campaign to teach more about TSLA’s full story, and Musk replied that Tesla would try “a little advertising.”
In response, Wadbush said:
We view this as a major positive for Tesla as many parts of the Tesla product line are undervalued by the street… Not many of the general public know about the affordability and capabilities of TSLA products. … We were very pleased to see the change in attitude towards advertising with Musk and in general.
Tesla shares gained 7.5% for the week to $180.14.
Western Digital intensifies merger talks
Western Digital (NASDAQ:) and Kioxia Holdings Corp. are speeding up merger talks and discussing the structure of the deal as the two companies continue to be pressured by sluggish demand for memory products, Reuters reports.
Excess inventory amid weak demand in the memory market hit both companies hard, and they believed that one entity would be better positioned to compete against competitors such as Samsung Electronics (OTC:).
Reuters added that the merged entity will be 43 percent owned by Kioxia, 37 percent by Western Digital, and the rest by existing shareholders.
Benchmark reiterated the Hold rating on Western Digital, stating that “While the devil will be in the details, given the currently depressed memory market, in the short term we see a modest uptick from such a deal as most of the value comes from an HDD unit losing grip.”
Shares rose 7.3 percent during the week to $38.32.
The head of OpenAI is ‘nervous’ about AI meddling in elections
The CEO of Microsoft (NASDAQ) — which is backed by OpenAI Sam Altman — said he was “concerned” about the possibility of AI meddling in elections at a Senate committee on Tuesday — and said the US should study the rules, licensing and testing requirements for developing the intelligence. artificial.
Sen. Cory Booker (D) said of AI, “There’s no way to put this genie in a bottle. Globally, this is exploding.”
In response to Sen. Mazie Hirono (D)’s reference to an AI-generated video of former President Trump’s arrest, Altman said creators should make it clear when the image is being created rather than being realistic.
Altman also said companies should be able to protect their data from being used for AI training — but public online materials should be left open for these purposes.
Shares of Microsoft rose 3% for the week, to $318.34.
Alibaba posts disappointing earnings
Shares of Hong Kong-listed e-commerce giant Alibaba Group (NYSE:) (HK:) sank on Friday as the economic recovery slowed and competition intensified in China, its largest market.
The company reported revenue of CNY20,820 billion ($1 = CNY7.04) for the three months to March 31, lower than analyst estimates of CNY210.3 billion. Its revenue for the year ending March 31 also rose just 2% to CNY868.69 billion, the worst pace of growth since the company listed in 2014.
Direct sales to China’s Alibaba, which make up the bulk of its revenue, fell 1% in the quarter, as consumer spending in China continued to suffer despite the lifting of anti-COVID measures.
Alibaba’s New York-traded ADRs fell 3.7% for the week, to $83.98. Its shares traded in Hong Kong fell 1.6%.
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Sinad Karahemtović, Michael Elkins, and Ambar Warrick contributed to this report.