5 big analyst AI moves: Microsoft, Amazon rating cuts; Robotaxi day disappoints
A key issue raised by the firm’s analysts is potential losses stemming from Microsoft's AI partner, OpenAI, which is expected to post a loss of around $5 billion this year. With Microsoft holding a 49% stake, the company could face significant financial impact as a result.
Oppenheimer also expressed concerns over Microsoft’s gross and EBITDA margins, which are expected to decline due to rising depreciation and operational costs linked to AI investments. "We came away from the NDR with a better appreciation of the company's competitive moat and, importantly, the projected increase in Inference workload complexity as well as its implications for future compute demand," the bank noted.
Key concerns include Amazon's investments in Project Kuiper, pressure from Fulfillment by Amazon fees, and slowing growth from its advertising business. "Amazon remains a margin expansion story," according to the bank, but it noted that the rate of this expansion will likely be slower than what the market currently anticipates.Morgan Stanley analysts voiced disappointment following Tesla's much-anticipated"We, Robot" event this week, citing a lack of key information about Full Self-Driving technology, ride-sharing economics, and a clear go-to-market strategy for autonomous vehicles.
Furthermore, the event did not provide any meaningful discussion on Tesla’s collaboration with xAI or updates on Tesla’s"Master Plan 4," leaving Morgan Stanley analysts to conclude that the event failed to significantly move forward Tesla’s narrative as an AI-focused company.
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