Tech Daily: NVIDIA & Intel Earnings, JEDI Stay Order, Facebook App, More

NVIDIA Earnings

NVIDIA’s reported revenue and earnings of $3.10 billion and $1.54 were better than the Zacks Consensus Estimates of $2.96 billion and $1.34, respectively.

Results were driven by a strong data center business as hyperscalers that had curtailed spending through the year, stepped up purchases in the fourth quarter. There were also some vertical-specific GPU deployments for AI/deep learning workloads. NVIDIA expects this business to grow sequentially in the current quarter, indicating that increased data center spending is not a one-off thing.” data-reactid=”18″>Earnings reports from NVIDIA NVDA and Cisco CSCO, a stay order on the JEDI contract in Amazon’s AMZN favor, Facebook’s FB app to compete with Pinterest and other stories are covered in this daily.

NVIDIA Earnings

NVIDIA’s reported revenue and earnings of $3.10 billion and $1.54 were better than the Zacks Consensus Estimates of $2.96 billion and $1.34, respectively.

Results were driven by a strong data center business as hyperscalers that had curtailed spending through the year, stepped up purchases in the fourth quarter. There were also some vertical-specific GPU deployments for AI/deep learning workloads. NVIDIA expects this business to grow sequentially in the current quarter, indicating that increased data center spending is not a one-off thing.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="New device builds hit gaming GPUs for consoles, but NVIDIA products gained ground in gaming PCs and notebooks. The guidance for this segment was disappointing because of a $100 million impact from the coronavirus that the company thinks is in its early phases.

Cisco Earnings

But while NVIDIA, and Intel before it, saw renewed demand in the data center as a positive for their future business, Cisco continued to see softness for the second straight quarter. The company reported in-line revenue and a 3 cent beat on earnings in its fiscal second quarter, largely supported by a strong subscription service business that was offset by continued weakness on the product side.

Management called out 5G cellular networks, 400-gigabit Ethernet, WiFi 6 and the cloud as its primary growth drivers. Cisco remains greatly enthused by 5G and expects it to play a major role in 2021. But of course tech transitions are difficult, particularly given coronavirus concerns that are limiting global travel and spurring plant shutdowns.

Management said that Brexit and trade with China were negatively impacting its business, but results would improve with stabilization in the macroeconomic environment. Cisco’s China exposure is very small (like 2%), so coronavirus has a limited impact on it. But it continues to guide conservatively indicating that uncertainties persist.

Cisco also announced a $300 million restructuring charge including severance and other cost, about half of which will be recognized in the current quarter.

Stay on JEDI Contract

Judge Patricia Campbell-Smith issued a preliminary injunction temporarily barring Microsoft MSFT and the DoD from proceeding with the $10 billion contract until she has had time to look into the details. Amazon was asked to submit $42 million in case the injunction wasn’t justified. Work on the contract was supposed to start today.

Amazon claims that President Trump, because of his personal vendetta against Amazon CEO Bezos, instructed the selection committee not to award the contract to Amazon. The concerned people have all denied any such meddling by the White House. Microsoft said it is confident that the DoD’s decision was without bias.

Facebook Rival for Pinterest

The Information reports that Facebook has launched an app in Colombia, Belgium, Spain and Ukraine, according to CNBC. The app is called Hobbi and appears to compete with Pinterest. The app allows users to organize their photos into “visual collections”. The app was created by Facebook’s "New Product Experimentation" team that was formed last year to develop useful consumer-facing applications.

A Pinterest spokesman Told CNBC, "Upon first look, Hobbi appears to be a photo saving app that lacks the discoverability, search, and recommendations of Pinterest." "As described in the App Store, it’s meant to help you document and remember the things you do, which is about the past, while Pinterest is about discovering ideas and inspiring action for the future."

Nonetheless, Pinterest shares dropped in reaction to the news.

Google Fights EU Fine

The EU has imposed three fines on Google, the first in 2017 involving the Google Shopping price comparison service for $2.6 billion, the second in 2018 for bundling its apps with Android for $5 billion and the third in 2019 for blocking its online advertising rivals. Hearing on the first case started yesterday, with the company defending its position using the age-old argument that regulation couldn’t stifle innovation.

"Competition law does not require Google to hold back innovation or compromise its quality to accommodate rivals. Otherwise, competition would be restricted and innovation would be stifled," its lawyer Thomas Graf told a panel of five judges on the first of a three-day hearing at the EU General Court.

It also disputed other aspects of the case: "It is wrong on the law, the facts, and the economics. Shopping ads have always helped people find the products they are looking for quickly and easily, and helped merchants to reach potential customers," said a company statement.

Google’s statement that it was only in 2017 that the EU decided to fix the penalty “at a level sufficient to ensure deterrence” further illustrates its argument. Moreover, the company contends that since it neither hid the practice nor obstructed the course of justice and instead cooperated with the investigation, the exemplary punishment was unjustified. The fine was based on Google’s 2016 revenue, on which the multiplier applied was higher than the highest possible in anti-competitive cases.” data-reactid=”19″>New device builds hit gaming GPUs for consoles, but NVIDIA products gained ground in gaming PCs and notebooks. The guidance for this segment was disappointing because of a $100 million impact from the coronavirus that the company thinks is in its early phases.

Cisco Earnings

But while NVIDIA, and Intel before it, saw renewed demand in the data center as a positive for their future business, Cisco continued to see softness for the second straight quarter. The company reported in-line revenue and a 3 cent beat on earnings in its fiscal second quarter, largely supported by a strong subscription service business that was offset by continued weakness on the product side.

Management called out 5G cellular networks, 400-gigabit Ethernet, WiFi 6 and the cloud as its primary growth drivers. Cisco remains greatly enthused by 5G and expects it to play a major role in 2021. But of course tech transitions are difficult, particularly given coronavirus concerns that are limiting global travel and spurring plant shutdowns.

Management said that Brexit and trade with China were negatively impacting its business, but results would improve with stabilization in the macroeconomic environment. Cisco’s China exposure is very small (like 2%), so coronavirus has a limited impact on it. But it continues to guide conservatively indicating that uncertainties persist.

Cisco also announced a $300 million restructuring charge including severance and other cost, about half of which will be recognized in the current quarter.

Stay on JEDI Contract

Judge Patricia Campbell-Smith issued a preliminary injunction temporarily barring Microsoft MSFT and the DoD from proceeding with the $10 billion contract until she has had time to look into the details. Amazon was asked to submit $42 million in case the injunction wasn’t justified. Work on the contract was supposed to start today.

Amazon claims that President Trump, because of his personal vendetta against Amazon CEO Bezos, instructed the selection committee not to award the contract to Amazon. The concerned people have all denied any such meddling by the White House. Microsoft said it is confident that the DoD’s decision was without bias.

Facebook Rival for Pinterest

The Information reports that Facebook has launched an app in Colombia, Belgium, Spain and Ukraine, according to CNBC. The app is called Hobbi and appears to compete with Pinterest. The app allows users to organize their photos into “visual collections”. The app was created by Facebook’s “New Product Experimentation” team that was formed last year to develop useful consumer-facing applications.

A Pinterest spokesman Told CNBC, “Upon first look, Hobbi appears to be a photo saving app that lacks the discoverability, search, and recommendations of Pinterest.” “As described in the App Store, it’s meant to help you document and remember the things you do, which is about the past, while Pinterest is about discovering ideas and inspiring action for the future.”

Nonetheless, Pinterest shares dropped in reaction to the news.

Google Fights EU Fine

The EU has imposed three fines on Google, the first in 2017 involving the Google Shopping price comparison service for $2.6 billion, the second in 2018 for bundling its apps with Android for $5 billion and the third in 2019 for blocking its online advertising rivals. Hearing on the first case started yesterday, with the company defending its position using the age-old argument that regulation couldn’t stifle innovation.

“Competition law does not require Google to hold back innovation or compromise its quality to accommodate rivals. Otherwise, competition would be restricted and innovation would be stifled,” its lawyer Thomas Graf told a panel of five judges on the first of a three-day hearing at the EU General Court.

It also disputed other aspects of the case: “It is wrong on the law, the facts, and the economics. Shopping ads have always helped people find the products they are looking for quickly and easily, and helped merchants to reach potential customers,” said a company statement.

Google’s statement that it was only in 2017 that the EU decided to fix the penalty “at a level sufficient to ensure deterrence” further illustrates its argument. Moreover, the company contends that since it neither hid the practice nor obstructed the course of justice and instead cooperated with the investigation, the exemplary punishment was unjustified. The fine was based on Google’s 2016 revenue, on which the multiplier applied was higher than the highest possible in anti-competitive cases.