📈 AI Chat App Market: ChatGPT Surges But Rivals Pose Revenue Challenge

Good day, tech enthusiasts!

Today, October 31, 2023, we bring you the freshest bites from the world of technology. Dive in to get a quick peek at what's making waves:

• Meta's UK Challenge - Firm warns against 'Threads'.

• Musk's $19B Valuation - X Company's latest valuation.

• ChatGPT's Market Surge - Leading despite fierce rivals.

• AI Art Lawsuit - Copyright concerns hit platforms.

• Pinterest's 11% Jump - Revenue rises amidst industry shakeup.

• Safari's Innovative Feature - Websites now transformed into apps.

• Apple's M3 Power - Macs and iMacs get a performance boost.

• Zoom - An investment case write-up.

• and more..

Gear up for an informative ride. Read on to quench your tech thirst!

Tech Companies

UK Firm Challenges Meta: Cease 'Threads' in 30 Days or Face Legal Action (6-minute read)

Meta has been given a 30-day ultimatum by UK-based Threads Software Limited to stop using the name 'Threads' for its products in the UK. The British company, which has owned a trademark for 'Threads' since 2012, threatened to seek a court injunction if Meta fails to comply. Threads Software, which rejected Meta's four purchase offers for the domain "threads.app" uses the trademark for its intelligent messaging hub platform.

Elon Musk's X Now Valued at $19 Billion (3-minute read)

X, is now valued at $19 billion, based on its employee equity compensation strategy. Owned by Elon Musk, the company is granting RSUs to its employees at a $45 per share price, a decline from its March valuation of $20 billion. Staff received an email about the grants on Monday.

Walmart Canada, Klarna Unveil Buy Now Pay Later Service: A Future Game-Changer? (5-minute read)

Walmart Canada has partnered with Klarna, enabling customers to make online and mobile purchases with a new interest-free, Buy Now, Pay Later service.

AI Corner

AI Chat App Market: ChatGPT Surges But Rivals Pose Revenue Challenge (8-minute read)

Despite being a market leader in terms of downloads and revenue, ChatGPT is not the leading AI app by revenue. While its monthly active users skyrocketed from 1.34 million in May to 38.88 million in September, and consumer spending reached nearly $2.39 million in October, apps like ""Chat & Ask AI"" and ""ChatOn - AI Chat Bot Assistant"" outperformed it in September revenue. Surprisingly, several photo AI apps are generating more revenue, indicating a broader market for AI apps beyond OpenAI creations.

AI Art Platforms Face Lawsuit Over Copyright Infringement: Key Holdings (9-minute read)

Artists have lost a first round copyright infringement case against AI art generators Midjourney and DeviantArt, yet the claim against Stability AI proceeds. This high-stakes lawsuit pertains to the unauthorized use of online images to train AI systems. President Biden recently issued an executive order recommending AI safeguards, including watermarking, in parallel events.

Meta’s AI Chief Calls For Revamping Open Source Licensing (8-minute read)

Joelle Pineau, Meta's AI Research VP, advocates for changes in open-source licensing, citing that current schemas fall short for AI models. Despite releasing its language model, Llama 2, for free, Meta's license fails to meet Open Source Initiative's complete criteria.

50% Chance of Achieving Human-Level AI in 5 Years? DeepMind Co-founder Says Yes (7-minute read)

DeepMind's co-founder, Shane Legg, reaffirms his prediction of a 50% chance for achieving artificial general intelligence (AGI) by 2028. He acknowledges significant scaling of AI training models as a necessary caveat.

Markets & Money

Pinterest's Revenue Skyrockets 11% Despite Tech Industry Volatility (4-minute read)

Pinterest's Q3 earnings surpassed predictions with revenue at $763.2 million and earnings per share at 28 cents, causing a 6% stock increase. User engagement boosted 8%, achieving 482 million active users, and average revenue per user rose to $1.61. Despite broader market challenges from the Israel-Hamas conflict, Pinterest forecasts Q4 growth between 11% to 13%.

Samsung's Chip Division Suffers $2.78B Loss, Expects Recovery: Unforeseen Details (6-minute read)

Samsung Electronics' Q3 results indicate a 12% YoY decrease in revenue to around $50B, but the net income of $4.1B exceeded expectations, despite falling 40% YoY. The chip division suffered an operating loss of about $2.78B. However, significant increases in the mobile panel business's earnings and a predicted recovery in the semiconductor market next year offer glimmers of optimism.

Tech investment ideas

Zoom Video Communications (ZM): Navigating Market Challenges with Strong Upselling and Broadened Offerings (Seeking Alpha)

Zoom Video Communications, Inc. provides a video communication platform with its main product, Zoom Meetings, offering HD video, voice, chat, and content sharing. It's accessible from various devices, including productivity tool integration and screen-sharing features. Additionally, they have Zoom One, a comprehensive collaboration suite featuring Zoom Whiteboard, cloud phone systems, messaging, email, and calendars.

_{Ticker: $ZM | Price: $60.10 | Price Target: $100 (+67%) | Timeframe: 12 months}

_{🖥 SaaS | 📹 Video communications | 👇 Historical lows |} 📈 _{Bullish idea}

Latest Development

• ZM acquired a rapidly growing company earlier this year. They also recently gained Dollar General Corporation (DG) as a client for this new solution.

Financials

• For Q2:

  • Zoom witnessed a 7% YoY increase in enterprise customers to 218,100.

  • Customers paying over $100,000 rose nearly 18% YoY to 3,672, representing about 29% of total revenue.

  • Revenue increased by 3.6% to $1.14 billion, surpassing the analyst consensus of $1.11 billion.

  • Adjusted EPS stood at $1.34, beating the consensus by 28 cents.

  • Operating cash flow surged about 31% to $336.0 million.

Timing

• The stock is presently undervalued, making it an opportune moment to buy.

• The author foresees value realization in the near future, especially given the growth and strategic moves ZM is making.

Valuation

• ZM's valuation is based on an EV/S ratio of 2.6x for FY24 and 2.4x for FY25, significantly lower than many SaaS peers.

• The company is expected to grow its revenue by 2.2% this year and 3.9% next year.

• From an EBITDA viewpoint, it's trading at 6.4x for both FY24 and FY25, making it one of the most inexpensive SaaS companies, even though its current growth expectations are modest.

Risks

• The challenging macro environment and the possibility of weaker renewals.

• Concerns about the push for workers to return to the office, potentially impacting ZM's enterprise client growth and renewals.

• Some softness has been observed with smaller customers.

Counter Thesis

• Investors should monitor the macro environment, especially regarding work-from-home trends, enterprise client acquisition, and renewals.

• Any changes in the growth trajectory, especially in international markets like Europe and Asia.

• Watch for the company's ability to compete and stand out, especially with rivals like Microsoft adjusting their strategies.

Important note: This information is not to be considered as financial advice. Investors should conduct their own due diligence and exercise independent judgment before making any investment decisions. Business Edge and its affiliates may hold positions in securities discussed at the time of writing, but this should not influence your own decision-making process. The ratings and discussions are not intended to time a specific entry or exit point unless explicitly stated.

Apps & Gadgets

Turn Websites into Apps: Boost Mac Productivity with Safari's New Feature (8-minute read)

Apple's new feature in macOS Sonoma allows converting any website into a dedicated Dock app, encouraging a more focused approach to work. These web apps, devoid of browsing history, cookies, or site data, provide a boost to privacy. However, the efficiency of Google's apps and worskpace websites appear schema as in Safari, with better performance requiring paid Chromium-based tools or third-party apps up to $30.

Apple's New M3 Chips Skyrocket MacBooks and iMacs Performance: Key Reveals (4-minute read)

Apple unveiled its new M3-series chips incorporated in the MacBook Pro and iMac devices at the recent' Scary Fast' event. The new 14-inch and 16-inch MacBook Pros and M3 iMac offer improved battery life, brighter displays, and maximum memory. The MacBooks also come in a new Space Black color. Customers can now purchase the M3 and M3 Pro, while the M3 Max to follow later in November.