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Online retailer Amazon is set to create more than 5,000 jobs in Britain this year, the company said on Monday, boosting its investment in the country once more even as it prepares to leave the European Union.

Amazon, along with other tech giants such as Google and Apple, has increased its commitment to Britain in the last year, saying Britain’s referendum decision to leave the EU last June did not affect its investment plans.

The plans to add over 5,000 jobs in 2017 is a record for Amazon in Britain, although at least 2,000 of the jobs had been previously announced. The moves would take its permanent workforce in the country to 24,000.

Source: Amazon to create over 5,000 jobs in Britain in 2017 | Reuters

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Some things, even huge piles of money can’t buy.

One of those things might be the ability to unseat Amazon.com Inc.’s [stckqut]AMZN[/stckqut] AWS as the king of the cloud computing market. Not that others haven’t made a game effort. The two largest challengers— Microsoft Corp.[stckqut]MSFT[/stckqut] and Google parent Alphabet Inc.[stckqut]GOOGL[/stckqut]—have dropped about $52 billion combined in capital expenditures over the past three years, much of which goes toward their massive networks of data centers and related equipment. That’s double what the two spent over the previous three-year period.

It’s not been without results. Microsoft’s Azure cloud service more than doubled its revenue in 2016 to about $2.7 billion, according to estimates from J.P. Morgan. Google’s Cloud Platform surpassed $1 billion in revenue in 2016, estimates Aaron Kessler of Raymond James.

The latter is particularly of note, given that it’s been barely a year since Google brought in former VMware chief Diane Greene to run the cloud division and focus on enterprise customers. It took AWS at least five years to hit the $1 billion mark, judging from Amazon’s limited disclosures at the time.

Source: Amazon Rivals Have Big Clouds to Fill – WSJ

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Tech investors are a discerning bunch these days—a harsh reality that is pressuring Apple Inc. [stckqut]AAPL[/stckqut] more than it deserves.

In this yield-starved environment, stock investors are attracted to steady income. This would benefit Apple, except that like other former highfliers, it has been tossed out by investors. The iPhone giant’s shares have slid 6% this year and 21% over the past 12 months. While some of that is justified as iPhone sales have slowed, the selloff also looks overdone.

Much of the bearish thesis is due to weakening iPhone sales, which account for more than half of revenue. The iPad isn’t selling as well as it used to and the jury is out on the Apple Watch. Tech investors are allergic to anemic growth, which explains why the tech-heavy Nasdaq has lagged behind the Dow industrials and S&P 500.

Still, Apple has been punished more than enough. The iPhone slump appears priced in. And while the next iPhone, expected later this year, likely won’t be a significant upgrade, there is optimism that sales growth will soon bounce back. Analysts forecast iPhone unit sales will rise 5% for fiscal 2017, which ends next September.

Apple is the sort of stock that investors love these days. It plans to spend $250 billion on dividends and buybacks by March 2018, which would boost earnings per share and yield. Already, Apple’s 2.3% dividend yield is well above the 10-year Treasury yield.

Apple remains wildly profitable, too. Its $10.52 billion profit in the March quarter easily surpassed combined profits of Alphabet Inc. [stckqut]GOOGL[/stckqut], Amazon.com Inc. [stckqut]AMZN[/stckqut] and Facebook Inc. [stckqut]FB[/stckqut]

Source: Apple Is Ripe for a Rally

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Company name Alphabet Inc
Stock ticker GOOGL
Live stock price [stckqut]GOOGL[/stckqut]
P/E compared to competitors Good

MANAGEMENT EXECUTION

Employee productivity Good
Sales growth Good
EPS growth Fair
P/E growth Fair
EBIT growth Good

ANALYSIS

Confident Investor Rating Good
Target stock price (TWCA growth scenario) $877.92
Target stock price (averages with growth) $927.89
Target stock price (averages with no growth) $480.21
Target stock price (manual assumptions) $869.08

The following company description is from Google Finance: http://www.google.com/finance?q=googl

Alphabet Inc. is a holding company. The Company holds interests in Google Inc. (Google). The Company’s segments include Google and Other Bets. Google segment includes Internet products, such as Search, Ads, Commerce, Maps, YouTube, Apps, Cloud, Android, Chrome, Google Play, and hardware products, including Chromecast, Chromebooks and Nexus, which are sold by the Company. Its technical infrastructure and Virtual Reality are also included in Google segment. Google segment is engaged in advertising, sales of digital content, applications and cloud services, as well as sale of Google branded hardware. The Other Bets segment consists of various operating segments and includes businesses, such as Access/Google Fiber, Calico, Nest, Verily, GV, Google Capital, X and other initiatives. Other Bets segment is engaged in the sale of Nest hardware products, Internet and television services through Google Fiber, and licensing and research and development (R&D) services through Verily.

 

Confident Investor comments: At this price and at this time, I think that a Confident Investor can confidently invest in Alphabet Inc.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.

How was this analysis of Alphabet Inc calculated?

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
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In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

  • Stock price at the time of the calculation: $765.84
  • Growth: 0.13
  • Current EPS (TTM): $23.74
  • P/E: 32
  • Future EPS Calc: $43.73
  • Future Stock Price Calc: $1399.66
  • Target stock price: $869.07

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I hope that this makes you a Confident Investor.

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Two years ago, Google spent over half a billion dollars for the tiny artificial intelligence startup DeepMind. Since then, the unit has walloped Atari video games and beaten an impossible board game.

Impressive stuff, that. But those AI demonstrations have yet to spell actual revenue. Until now — although the efforts are helping Google save money on its most expensive part.

DeepMind chief Demis Hassabis told Bloomberg that his unit recently began applying its advanced AI to Google’s data centers, finding ways to reduce the company’s sizable energy bill.

Google started using machine learning for its data centers two years ago, searching for ways to reduce costs for one of the company’s top expenses. A month ago, it aimed the more specialized AI tools from DeepMind at the problem of cooling these server farms. That cut the energy needed for cooling by 40 percent, the company said.

It didn’t offer a dollar figure for that, but it’s safe to assume that it means hundreds of millions in savings over the long haul.

Source: Google has found a business model for its most advanced artificial intelligence – Recode