Apple, Accenture, Nvidia, and More!
Editor’s Note: Happy Friday, dear reader!
Let’s get to it!
Fisker Declares Bankruptcy… Again
Fisker Inc. (OTMCKTS: FSRN) became the latest electric vehicle (EV) maker to declare bankruptcy this week. The startup is looking to sell many of its assets and restructure its massive debt load.
According to the company’s Chapter 11 bankruptcy filing in Delaware, Fisker has estimated assets of $500 million to $1 billion and liabilities of $100 million to $500 million. The company took on a lot of debt in an effort to ramp up production of its electric Ocean SUV.
However, tepid demand for EVs, as well as lingering global supply-chain issues, have hurt Fisker’s bottom line.
Fisker’s creditors include Alphabet (NYSE: GOOGL) and Adobe (NSDQ: ADBE).
Earlier this year, Fisker announced that it would potentially receive a $350 million in funding from a major automaker — rumored to be Nissan (OTCMKTS: NSANY). However, the deal fell through.
Fisker was one of several startups that went public in 2020 thanks to a special purpose acquisition company (SPAC) deal. Back then, the EV maker was valued at $2.9 billion.
However, Fisker’s stock was delisted from the New York Stock Exchange (NYSE) back in March due to its “abnormally low” share price.
Last year, Fisker failed to deliver the more than 10,000 EVs that it produced. That led the company to switch from a direct-to-consumer model to working with dealers. However, 27 dealers around the world couldn’t sell the remaining inventory of 5,000 EVs.
It didn’t help sales that Fisker’s Ocean SUV received terrible reviews and complaints published by Consumer Reports — or that it’s under investigation by regulators for several mechanical issues.
Fisker’s CEO, Henrik Fisker, was formerly a design consultant for rival Tesla (NSDQ: TSLA). And this isn’t his first rode: Fisker’s earlier business, Fisker Automotive, filed for bankruptcy in 2013 after battery problems in its Karma hybrid sedan led to a massive recall.
The news that Fisker’s newest endeavor has declared bankruptcy surprised few on Wall Street.
“Fisker has been on life support for months now, so today’s announcement doesn’t come as a surprise,” CFRA Research analyst Garrett Nelson said.
“It wasn’t the first EV upstart to declare bankruptcy, and we don’t think it’ll be the last.”
Apple Cancels Its BNPL Service
Apple (NSDQ: AAPL) announced this week that it is ending its buy-now-pay-later program. The service, Apple Pay Later, offered customers the ability to pay off purchases of up to $1,000 in four interest-free installments.
The Cupertino Giant launched Apple Pay Later only last year. Sadly, this is evidence that not everything Apple touches turns to gold.
The cancellation of Apple Pay Later followed the announcement that the company would start offering installment loans for Apple Pay purchases through third-party finance companies such as Affirm (NSDQ: AFRM), as well as accepting credit and debit cards from certain issuers.
“Starting later this year, users across the globe will be able to access installment loans offered through credit and debit cards, as well as lenders, when checking out with Apple Pay,” an Apple spokesperson said.
“With the introduction of this new global installment loan offering, we will no longer offer Apple Pay Later in the U.S.”
Apple Pay Later was available only in the USA. According to Apple, third-party installment plans will now be available in more countries at Apply Pay checkout.
Unlike many of Apple’s other financial products, Apple Pay Later required the company to perform many of its own loan decisions, as well as credit checks. By comparison, these tasks were completed for the Apple Card program by intermediary companies.
Accenture Gets a Boost From AI Mention
Information technology (IT) services company Accenture (NYSE: ACN) reported earnings this week that fell below estimates.
Third-quarter revenue totaled $16.47 billion — below estimates of $16.53 billion. And the company’s adjusted profit per share reached $3.13 — again, below estimates of $3.15.
In the year-ago quarter, the Ireland-based company reported adjusted earnings of $3.19 per share on revenue of $16.57 billion.
However, the company’s shares rose after Accenture mentioned that interminable buzzword, artificial intelligence (AI), in its revenue forecast.
Accenture reported that, for the full year, it is expecting revenue growth to beat Wall Street’s estimates thanks to AI. Accenture provides services that help client companies save costs and increase productivity by replacing human workers with automated AI.
“[Generative AI] is acting as a catalyst for companies to more aggressively go after costs… which creates significant opportunity for us,” CEO Julie Sweet said on a conference call with analysts.
The company reported new bookings — which indicate how much clients with contracts have committed to spend — of $21.06 billion for the third quarter. That’s a significant increase from the year-ago quarter’s new bookings of $17.25 billion.
In addition, Accenture reported that $900 million worth of those books are for services related to generative AI. That brings the company’s year-to-date AI bookings to $2 billion.
“We achieved strong new bookings of over $21 billion, up 22% over last year, and continued to accelerate our strategy to be the reinvention partner of choice,” Sweet said in a statement.
Accenture is expecting annual revenue for the year to grow by 1.5% to 2.5%. According to LSEG data, Wall Street analysts expect revenue growth of 1.6%.
For the current quarter, the company is expecting sales of $16.05 billion to $16.65 billion. Analysts have been expecting sales of $16.53 for the quarter.
Accenture’s stock rose by roughly 7% in early morning trading yesterday. However, year to date, the IT firm’s stock is down by more than 12%. Accenture stock plunged following its previous earnings report, in which the company provided a worse-than-expected full-year forecast.
Nvidia Becomes Most Valuable Publicly Traded Company
This week, Nvidia (NSDQ: NVDA) overtook Microsoft (NSDQ: MSFT) as the world’s most valuable publicly traded company. A recent stock split helped push the chip designer’s market cap to $3.335 trillion on Tuesday.
Take a look:
You will find more infographics at Statista
Just a little over a year ago, the company’s market cap was around “just” $750 billion. But then Nvidia reported a forecast for its second fiscal quarter of 2024 — and all heck broke loose.
“The computer industry is going through two simultaneous transitions — accelerated computing and generative AI,” CEO Jensen Huang said. “A trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service, and business process.”
Those remarks kicked off the AI boom and sent Nvidia’s valuation up above $1 trillion for the first time.
It’s awfully hard to justify a market cap north of $3 trillion for any company. Is Nvidia a bloated bubble that’s waiting to burst?
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