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Dear readers, As we approach yet another weekend, here are some key developments across various sectors. Nvidia has surpassed Apple to become the world’s largest company, driven by the AI boom. Meanwhile, the US Federal Reserve cut interest rates, by 25 basis points to 4.75%, the second such reduction in 2024. In the workplace, Gen Z’s approach to mental health got attention, with one employee taking a week off after a breakup. Additionally, Indian banks are expecting steady growth, despite challenges in unsecured lending. Read on for all the details! <h2>Top stories from the week </h2> Indian banks to have steady growth in earnings over next 3-4 years, fees from unsecured lending may dip, notes Jefferies report Jefferies forecasts steady earnings growth for Indian banks over the next 3–4 years, with a 13% annual loan growth rate. However, a decline in unsecured lending could reduce fee income. While net interest income is expected to grow at 12%, challenges such as rising defaults and a potential dip in rate cuts could affect profitability. Despite this, banks’ return on equity and assets remain promising. <a href="https://www.businessinsider.in/finance/news/indian-banks-to-have-steady-growth-in-earning-over-next-3-4-years-fees-from-unsecured-lending-may-dip-notes-jefferies-report/articleshow/115048179.cms" data-type="tilCustomLink" target="_blank">Read more</a> Nvidia becomes world’s largest company amid AI boom, surpasses Apple in the race Nvidia has surpassed Apple to become the world’s largest company by market capitalization, driven by the AI boom. The company’s strong performance is fueled by surging demand for its chips used in AI technologies. With a market cap hitting $3.43 trillion, Nvidia continues to dominate the AI hardware sector, powering data centres and AI research. The company’s revenue growth of 122% YoY further cements its leadership in the AI space. <a href="https://www.businessinsider.in/business/news/nvidia-becomes-worlds-largest-company-amid-ai-boom-surpasses-apple-in-the-race/articleshow/115003223.cms" data-type="tilCustomLink" target="_blank">Read more</a> ‘He had a breakup and took a one-week leave’: Manager shares about his Gen-Z employee, internet reacts A manager’s tweet about granting a Gen Z employee a week off for a breakup sparked widespread debate. While the manager expressed frustration over project delays, internet users defended the employee’s mental health needs, criticizing the manager’s lack of empathy. Some supported the manager’s view, pointing out generational differences in work culture. The incident went viral, furthering discussions about Gen Z’s unique workplace expectations. <a href="https://www.businessinsider.in/careers/news/he-had-a-breakup-and-took-a-one-week-leave-manager-shares-about-his-gen-z-employee-internet-reacts/articleshow/115041747.cms" data-type="tilCustomLink" target="_blank">Read more</a> US Fed cuts interest rates by 25 bps, Powell notes Trump’s victory to have no impact on policy decisions The US Federal Reserve has cut interest rates by 25 basis points to 4.75%, the second such reduction in 2024. Fed Chairman Jerome Powell emphasized the Fed’s independence despite Trump’s criticism and suggested that the economic outlook remains uncertain, though the Fed is focused on inflation targets. Trump’s policies may lead to higher inflation, adding complexity to the Fed’s efforts to stabilize prices. Experts anticipate that bond yields will stabilize, benefiting emerging markets like India. <a href="https://www.businessinsider.in/finance/news/us-fed-cuts-interest-rates-by-25-bps-powell-notes-trumps-victory-to-have-no-impact-on-policy-decisions/articleshow/115070690.cms" data-type="tilCustomLink" target="_blank">Read more</a> Big Tech’s winners and losers from Donald Trump’s win, according to the market After Donald Trump’s election victory, tech stocks surged, with companies like Tesla seeing significant gains. Tesla’s rise was fueled by Trump’s public support for CEO Elon Musk. Conversely, companies like Apple faced challenges due to fears over potential tariffs on China. While some, like Google, might benefit from lighter regulations, others like Meta could face political challenges. Overall, the election results reshaped market expectations for Big Tech’s future. <a href="https://www.businessinsider.in/tech/news/here-are-big-techs-winners-and-losers-from-donald-trumps-win-according-to-the-market/articleshow/115067798.cms" data-type="tilCustomLink" target="_blank">Read more</a> <h2>Top web stories</h2> <a href="https://www.businessinsider.in/entertainment/webstories/donald-trump-on-screen-a-look-at-his-iconic-cameos/slidelist/115045250.cms" data-type="tilCustomLink" target="_blank">Donald Trump on screen: A look at his iconic cameos</a> <a href="https://www.businessinsider.in/india/webstories/8-lifestyle-mistakes-contributing-to-health-problems-in-india/slidelist/115051791.cms" data-type="tilCustomLink" target="_blank">8 lifestyle mistakes contributing to health problems in India</a> <a href="https://www.businessinsider.in/travel/india/webstories/10-magical-indian-experiences-every-traveller-should-try/slidelist/115052527.cms" data-type="tilCustomLink" target="_blank">10 magical Indian experiences every traveller should try</a>

Weekend wrap: Nvidia’s AI-driven surge, Indian banks’ steady growth and more

Indian financial services firm <keyword id="19913826" type="General" weightage="100" keywordseo="Zerodha" source="keywords" meta.keywordsubtype="org" meta.entityname="Zerodha" meta.hostid="261" meta.entityid="Zerodha">Zerodha</keyword> made headlines recently for hitting ₹8,320 crore revenue in FY24. However, its CEO and co-founder <keyword id="19923447" type="General" weightage="20" keywordseo="Nithin-Kamath" source="keywords">Nithin Kamath</keyword> says that the company is preparing for a decline in revenue as several regulatory changes are expected to take effect later this year. Kamath, in a blog post, outlined the challenges ahead, which could result in a <keyword id="20168027" type="General" weightage="20" keywordseo="revenue-drop" source="keywords">revenue drop</keyword> of up to 50% as Zerodha faces a combination of stricter regulations and shifting market conditions. <h2>Zerodha braces for revenue drop</h2>One of the main concerns for Zerodha is the new Securities and Exchange Board of India (SEBI) regulation, which will be implemented on October 1, 2024. Kamath expects a 10% dip in revenue as the "true-to-label" circular is enforced. This change will impose stricter guidelines on brokers like Zerodha regarding the kind of financial products they offer, potentially limiting some of their key revenue-generating activities. Another significant factor affecting Zerodha’s future revenue is the ongoing review of index derivatives regulations. Index derivatives, which are a crucial part of Zerodha's business model, could soon face changes that might severely impact the company’s earnings. Kamath estimates that such modifications could reduce earnings by 30-50%. Additionally, with the <keyword id="20930760" type="General" weightage="20" keywordseo="Securities-Transaction-Tax" source="keywords">Securities Transaction Tax</keyword> (STT) set to rise in October 2024, the costs of futures trading could further impact Zerodha’s profitability, though the effect on options trading may be limited. Zerodha is also set to face revenue pressures due to changes in Annual Maintenance Charges (AMC) under the new Basic Services Demat Account (BSDA) thresholds. From October 2024, brokers will only be able to charge full AMC fees from customers with holdings of ₹10 lakhs or more, up from ₹4 lakhs currently. Combined with Zerodha's removal of account opening fees, this is expected to significantly impact their revenue. Yet another challenge comes from Zerodha’s decision to halt payouts from its referral program. The program, which incentivised customers to refer others to the platform, will now only allow payouts to Authorised Persons (AP) registered with exchanges. This new regulation limits the number of people who can refer customers, slowing the firm's growth. <h2>Zerodha's financial results</h2>Despite these looming challenges, Zerodha posted strong financial results for the fiscal year 2024. The firm recorded a 62% increase in profits, reaching ₹4,700 crore, with revenue climbing by 21% to ₹8,320 crore. Traders using Zerodha's platform are also sitting on over ₹1 lakh crore in unrealised profits, largely driven by strong market performance and increased retail participation. However, Kamath also cautioned that the profitability boost in recent years has been fuelled by a bull market, which could reverse at any time. If the market turns, Zerodha, like many other financial service providers, may face significant challenges. To prepare for such an eventuality, the company has built up a strong financial position, with Kamath stating that their net worth now stands at nearly 40% of the customer funds they manage.

Zerodha co-founder Nithin Kamath says bracing for a huge revenue hit even as the company hits ₹8,320 crore revenue in FY24

The generative AI provides more <keyword id="20069513" type="General" weightage="20" keywordseo="opportunity" source="keywords">opportunity</keyword> to the Indian IT sector contrary to the believe of being a threat, highlighted a report by Nuvama Wealth Management. The report noted that although AI <keyword id="19901571" type="General" weightage="20" keywordseo="technology" source="keywords">technology</keyword> may initially disrupt the sector, especially in terms of business operations and billing models, the long-term benefits far outweigh the risks. "We, on the contrary, expect the Indian IT industry to come out stronger from the <keyword id="19906101" type="General" weightage="100" keywordseo="Gen-AI" source="keywords">Gen AI</keyword>-led disruption. We dig deep into various facets of Gen <keyword id="20037918" type="General" weightage="20" keywordseo="AI-adoption" source="keywords">AI adoption</keyword> for enterprises and find that Gen AI would create a mammoth incremental opportunity for <keyword id="20617562" type="General" weightage="20" keywordseo="Indian-IT-services" source="keywords">Indian IT services</keyword>," said the report. The report noted that as more enterprises adopt AI, the need for services such as upgradation of legacy code and data readiness for AI integration will increase, offering Indian IT firms new streams of revenue. The report mentioned one of the most significant opportunities lies in the modernization of <keyword id="21835113" type="General" weightage="20" keywordseo="legacy-systems" source="keywords">legacy systems</keyword>, particularly core banking systems (CBS). It stated that many <keyword id="19912054" type="General" weightage="20" keywordseo="financial-institutions" source="keywords">financial institutions</keyword> still use mainframe systems and outdated programming languages like COBOL. Gen AI enables automated code modernization, which will drive a major demand for Indian IT services to upgrade these systems, creating a long-term revenue stream. "Since most non-Indian (read European) do not have the scale to hire and deploy employees with the ability to code in COBOL (not to mention supply crunch)--they have ceded this opportunity to <keyword id="21817095" type="General" weightage="20" keywordseo="Indian-IT-Services-companies" source="keywords" meta.keywordsubtype="org" meta.entityname="Indian IT Services companies" meta.hostid="261" meta.entityid="Indian IT Services companies">Indian IT Services companies</keyword>" said the report. The report specifically highlighted the "upgradation of legacy code" as a key area of opportunity for IT companies as businesses prepare their systems for AI integration. Gen AI is expected to create new service lines for Indian IT companies, including AI-based <keyword id="19945906" type="General" weightage="20" keywordseo="customer-service" source="keywords">customer service</keyword>, fraud detection, predictive maintenance, and knowledge processing. These AI-driven solutions will allow IT firms to offer higher-value services to clients, boosting revenue and profit margins. "Indian IT companies have always repositioned themselves to continue to do what they do best--service customers. That has provided them with the longevity they have commanded for multiple decades now. We do not see that changing this time as well" the report added. Comparing Gen AI to "a hammer looking for a nail," the report suggested that the technology's applications are still being discovered, but its potential is undeniable. Looking ahead, the report forecasts a strong start to FY25 for Indian IT companies, with growth driven by an optimistic outlook for the Banking, Financial Services, and Insurance (BFSI) sector, increasing technology spending, and large deal ramp-ups.

Gen AI to unlock a "mammoth incremental opportunity" for Indian IT services: Report

<ul class="summary-list"><li>This post originally appeared in the Insider Today newsletter.</li></ul>Welcome back! The fast-moving, big business of weight-loss drugs is already shifting to its next stage. Here's a rundown of <a target="_blank" href="https://www.businessinsider.com/upcoming-glp1-weight-loss-drugs-to-watch-2024-11">five upcoming pills and injections</a> to keep an eye on.In today's big story, Microsoft's massive bet on AI with Copilot <a target="_blank" href="https://businessinsider.com/microsoft-ai-artificial-intelligence-bet-doubts-marc-benioff-satya-nadella-2024-11">has yet to live up to the hype</a>, potentially raising alarms for everyone else investing in the space.What's on deck:<ul><li>Markets: You can still bet on politics <a target="_blank" href="https://www.businessinsider.com/top-political-prediction-bets-trump-2028-nominees-election-kalshi-polymarket-2024-11">even though the election is over</a>.</li><li>Tech: Why the Trump-Musk relationship is unlike anything <a target="_blank" href="https://www.businessinsider.com/elon-musk-donald-trump-elected-shadow-president-2024-11">we've ever seen in US politics</a>.</li><li>Business: Spirit Airlines has filed for Chapter 11 bankruptcy protection, but <a target="_blank" rel="noopener" href="https://www.businessinsider.com/spirit-airlines-chapter-11-bankruptcy-restructure-low-cost-airlines-2024-11">tells customers it'll keep flying</a>.</li></ul>But first, is this thing even worth it?If this was forwarded to you, <a target="_blank" href="https://www.businessinsider.com/subscription/newsletter/insider-today">sign up here.</a><h3 id="7fa5f018-5b05-4a37-a8dc-d3f89138bcb3">The big story</h3><h2 id="5fd547b9-ec52-41fc-8e08-4f4b27dd8097">A Copilot conundrum</h2><div type="image" title="Microsoft logo glitching" height="1000" width="1334" msid="115423174" hostid="261" sizebytes="160900"></div>Microsoft's challenges with its flagship AI product could be another red flag for an industry with high hopes for the tech.Business Insider's Ashley Stewart, our resident Microsoft expert, has a deep dive on Copilot <a target="_blank" href="https://www.businessinsider.com/microsoft-ai-artificial-intelligence-bet-doubts-marc-benioff-satya-nadella-2024-11">coming up short on the big expectations laid out for it</a> when it launched over a year ago.CEO Satya Nadella didn't hold back initially, describing Copilot as something that would "fundamentally transform our relationship with technology" when it was unveiled.But internally and among clients, that doesn't always feel like the case. One Microsoft executive told Ashley that Copilot offers useful results about 10% of the time."The rest of the time it's: Why do we even try?" they said.It's an unsettling realization considering the stakes of AI. Many companies — and arguably the entire US stock market — are banking on generative AI being revolutionary. And while Microsoft's bet on AI dwarfs almost everyone else's, its hangup with the tech is something a company of any size can relate to: Is this stuff worth it?It's also not the only challenge the generative AI space is navigating.Reports about OpenAI's newest AI model struggling to show big improvements raised questions about the <a target="_blank" href="https://www.businessinsider.com/openai-orion-model-scaling-law-silicon-valley-chatgpt-2024-11">tech hitting a performance wall</a>. CEO Sam Altman appeared to address it with a cryptic tweet: "<a target="_blank" href="https://www.businessinsider.com/sam-altman-ai-wall-slowdown-openai-2024-11">there is no wall</a>."Still, it's feeding concerns about the timeline for artificial general intelligence. AGI is the concept that autonomous computer systems outperform humans at most economically valuable work, but it appears <a target="_blank" href="https://www.businessinsider.com/agi-predictions-looking-stretched-openai-sam-altman-google-ai-2024-11">harder to achieve than previously anticipated</a>, writes BI's Alistair Barr.<div type="image" title="AI robot hand gripping a time bomb, displaying a countdown timer set to expire in 2025" height="1500" width="2000" msid="115423171" hostid="261" sizebytes="122298"></div>The counterargument is straightforward: It's still the early innings.Microsoft is adamant its Copilot investment is already paying off. Jared Spataro, a vice president of marketing for Microsoft 365, pointed Ashley to Copilot success stories like Lumen Technologies, which projects $50 million in annual savings from its sales team's use of Copilot.Some customers aren't necessarily worried either, as they continue to plow money into AI. A Flexera survey found OpenAI ranked fourth among vendors that IT leaders plan to <a target="_blank" href="https://www.businessinsider.com/openai-top-vendor-it-leaders-2024-11">spend the most with next year</a>.But tech players won't have forever to figure things out. Earlier this year, analysts at Barclays highlighted an under-the-radar risk to AI bets: <a target="_blank" href="https://markets.businessinsider.com/news/stocks/ai-stocks-risk-nvidia-gpus-blackwell-tech-outlook-depreciation-accounting-2024-8">the depreciation costs related to AI chips</a>. As firms look to stock up on GPUs, they run the risk of the tech no longer being relevant as new iterations emerge.And then there's the possibility of internal drama. Ashley previously reported on <a target="_blank" href="https://www.businessinsider.com/microsoft-pay-data-shows-how-much-more-ai-workers-make-2024-8">the pay disparity at Microsoft</a> between AI-focused employees and everyone else."AI is great and it might be the future, but when are you going to focus on your billpayers?" one employee told Ashley.<h3 id="77f31a4c-8462-4e3d-a71f-838cb79493fb">News brief</h3><h2 id="1fcd294b-3f53-425f-9f20-4093e8623b59">Top headlines</h2><ul><li>Meet the top four candidates Trump is <a target="_blank" rel="noopener" href="https://www.businessinsider.com/trump-treasury-kevin-warsh-marc-rowan-howard-lutnick-scott-bessent-2024-11">considering for Secretary of the Treasury</a>.</li><li>Biden authorizes Ukraine to use powerful ATACMS to strike inside Russia. The move is a <a target="_blank" rel="noopener" href="https://www.businessinsider.com/biden-ukraine-russia-atacms-authorization-2024-11">significant shift in US policy</a>.</li><li>Trump, Musk, and new cabinet picks celebrate election victory with <a target="_blank" rel="noopener" href="https://www.businessinsider.com/trump-musk-celebrate-election-victory-ufc-309-cabinet-picks-2024-11">surprise appearance at UFC</a>.</li></ul><h2 id="8120060b-ae66-48dc-b149-f0489a30ffa2">3 things in markets</h2><div type="image" title="Photo illustration of judge's gavel on colorfulbackground" height="960" width="1920" msid="115423175" hostid="261" sizebytes="501366"></div><ol><li>A lawsuit about trade secrets has a corner of Wall Street's data industry enthralled. Yipit, a Carlyle-backed provider of credit-card data, filed a lawsuit accusing two former salespeople of <a target="_blank" href="https://www.businessinsider.com/inside-yipits-lawsuit-against-2-former-employees-who-joined-mscience-2024-11">stealing intellectual property to use in their new roles at rival MScience</a>. The suit has the attention of the young, fiercely competitive industry that sells non-traditional data to investors looking for an edge.</li><li>Just because the election is over doesn't mean you need to stop betting on politics. Who will be the Republican nominee in 2028? Will Matt Gaetz be confirmed as attorney general? Will Trump create a national Bitcoin reserve? The prediction markets <a target="_blank" href="https://www.businessinsider.com/top-political-prediction-bets-trump-2028-nominees-election-kalshi-polymarket-2024-11">have plenty of political outcomes</a> to scratch your gambling itch.</li><li>It's giving the year 2000 for one legendary investor. Rob Arnott compared the current market to the dot-com peak in 2000. Arnott told BI <a target="_blank" href="https://www.businessinsider.com/stock-market-crash-rob-arnott-warns-bear-market-tech-bubble-2024-11">why a bear market could be forthcoming in the next couple of years</a> thanks to high valuations and AI optimism that is largely priced in.</li></ol><h2 id="f4b54806-7f81-450c-ba32-92560d4fae9b">3 things in tech</h2><div type="image" title="Elon Musk" height="900" width="1200" msid="115423177" hostid="261" sizebytes="159876"></div><ol><li>Elon Musk's incredible hold on US politics. Politics and money have always been intertwined, but the current relationship between the world's richest man and the president-elect is unprecedented. The result is Musk <a target="_blank" href="https://www.businessinsider.com/elon-musk-donald-trump-elected-shadow-president-2024-11">acting almost as a shadow president</a>.</li><li>A potential Trump trade plan beneficiary: US semiconductor jobs. If Trump's proposed trade plan is enacted, the American semiconductor industry could see hiring growth. Industry experts told BI that tariffs on foreign-made chips <a target="_blank" href="https://www.businessinsider.com/trumps-tariffs-chips-could-create-more-american-jobs-increase-prices-2024-11">could help level the playing field for US chipmakers</a>, which have faced tough competition from their global counterparts.</li><li>The OpenAI mafia swells its ranks. Nearly two dozen former employees have left the AI juggernaut and founded startups of their own. The latest defectors include OpenAI cofounder and former chief scientist Ilya Sutskever and former chief technology officer Mira Murati. <a target="_blank" href="https://www.businessinsider.com/former-openai-employees-who-left-launch-vc-backed-ai-startups-2024-1">See what they're up to now</a>.</li></ol><h2 id="9260fa45-d397-4b3c-b4f8-4bb193976216">3 things in business</h2><div type="image" title="A $100 bill on top of a house" height="1500" width="1992" msid="115423179" hostid="261" sizebytes="339688"></div><ol><li>Four ways Trump's housing plans could hurt homebuyers and three ways it could help. Trump promised to make housing more affordable in part by deporting millions of immigrants, slashing construction regulations, and building houses on federal land. <a target="_blank" href="https://www.businessinsider.com/trump-high-home-prices-housing-mortgage-rates-deregulation-tariffs-immigration-2024-11">Here's how experts think that would actually pan out</a>.</li><li>Spirit Airlines has filed for Chapter 11 bankruptcy protection. The budget airline has struggled since a planned merger with JetBlue was called off in March. In an open letter to customers, it said people can continue to book tickets and fly as normal as it <a target="_blank" rel="noopener" href="https://www.businessinsider.com/spirit-airlines-chapter-11-bankruptcy-restructure-low-cost-airlines-2024-11">undergoes financial restructuring</a>.</li><li>Walmart might be just fine under Trump's proposed trade plan. Target, not so much. As America's grocery king, Walmart US makes nearly 60% of its revenue from groceries, which are predominantly domestic. But Target often relies on imported merchandise, such as apparel and beauty. <a target="_blank" href="https://www.businessinsider.com/target-walmart-trump-tariffs-exposure-analysts-2024-11">Walmart also has another key advantage: scale</a>.</li></ol><h2 id="1ad7b482-3f4b-44b4-81b6-a864aa386478">In other news</h2><ul><li>Disney CEO Bob Iger is moving to cement his legacy <a target="_blank" href="https://www.businessinsider.com/bob-iger-disney-earnings-guidance-succession-legacy-chapek-media-analysis-2024-11">by undoing his biggest mistake</a>.</li><li>Shoppers and businesses are <a target="_blank" rel="noopener" href="https://l.businessinsider.com/a/click?_t=c8e10479a20f45bba5aad6c5f6fbb009&amp;_m=c30b8703d160410398dd34e9584c94a3&amp;_e=i25E5ONB4tMiXtE06VeSaaFdC9RBeKEf6Am3QwaEcB2E4JdSqnDqmYr-387ig-ruhUxPoPCaat-voaDbfD_6S9r_lRX7w-hriYUuLZLf0oBVVklUgTGSC4rQQEsaV2VrmBmyEJBbhb5t_4ii9kzf5mGNs24JHBU4kD2t77qvgLde0_hccfFyZJGyX-HSEOcVt3hm2j3fy4fJUboGG4PKvgV09z0iPgS9Sd9YYBa5vfJF0tPkg6nqTPSf_-4F-a8aB1csTjQJYq2n-O1Ho511puOlxNeZs4WzL5ZST0WJkZqjescVMWVojaLY68-GnLbrAONhAtYwR4sRYyo_gVAswrtOyO2OjgTQ7GPu_kEO5SvlrvfmHChZsIOFVxvPWR7cGcH5q-QsclhVCpi1tyVirT8OKMZUsBjylVY0fJJZOSkOO4NwglFhyDOfQDrbf0_ErXhpUTPhEJeNs9bRlNwOVGxCBs2oCYN7T81FPiuSVJw%3D">stockpiling to avoid potential price hikes</a> before Trump takes office.</li></ul><h2 id="9f5d80ac-3466-429f-a50a-2ffbb70c65ff">What's happening today</h2><ul><li>G20 summit begins in Rio de Janeiro.</li></ul>The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Grace Lett, editor, in Chicago. Ella Hopkins, associate editor, in London. Hallam Bullock, senior editor, in London. Amanda Yen, fellow, in New York.Milan Sehmbi, fellow, in London.

Microsoft Copilot's underperformance is the latest red flag for investments in AI

<ul class="summary-list"><li>Costco's membership crackdown may bring in <a target="_blank" class="" href="https://www.businessinsider.com/costco-cracking-down-on-card-sharing-at-self-checkout-2023-6">a Netflix-style revenue lift</a>.</li><li>Morgan Stanley analysts say they've seen "surprising conversion rates" of shoppers paying the fee.</li></ul>The largest wholesale club retailer and the world's biggest streaming giant continue to have <a target="_blank" class="" href="https://www.businessinsider.com/costco-membership-fee-business-model-more-like-netflix-than-walmart-2023-6">some similarities</a>.A year after Costco initiated its Netflix-style membership crackdown, including increasing the number of ID scanners at front entrances, analysts say the company could see a similar revenue lift."Costco's ongoing roll-out of membership <a target="_blank" class="" href="https://www.businessinsider.com/costco-leaning-into-netflix-style-membership-crackdown-2024-8">card scanners at its US clubs</a> could soon deliver a Netflix moment," Morgan Stanley's retail team, led by analyst Simeon Gutman, said in a note this week. The bank has an "overweight" rating on Netflix's stock.Business Insider was first to report on the <a target="_blank" href="https://www.businessinsider.com/costco-may-start-requiring-members-scan-id-enter-us-warehouses-2024-1">testing of the ID scanners</a> at a warehouse near the company's headquarters in Issaquah, Washington, earlier this year.Morgan Stanley said they've observed "surprising conversion rates" at selected stores that implemented the new tech, with membership counts rising by as much as low double-digits due to previously non-member shoppers electing to pay the fee.While Morgan Stanley estimates Netflix's subscribers jumped 13% after its password-sharing crackdown, Gutman's team said its base scenario is that Costco could grow its US membership by 8%, or about 4 million new members. In terms of revenue, even if just one of five of those new signups were the higher-priced Executive membership, Costco would pull in an extra $324 million in fees, the analysts said.The actual ratio of existing Gold Star and Executive members is closer to 50/50, which would boost fee revenue by closer to $400 million if the new signups followed suit, they estimated.While Costco is the third-largest retailer in the world in terms of revenue — following Walmart and Amazon — the company makes most of its profit from membership fees.Costco and other warehouse clubs don't make much money from the products they sell, which are sold at such low markups that they are <a target="_blank" href="https://www.businessinsider.com/costco-membership-deals-low-prices-2018-4">nearly at cost</a>.In other words, like Netflix, the key to profitability is charging members for exclusive access to its products and services.The Morgan Stanley analysts said, "Our analysis is theoretical and we are not changing our estimates."If you are a Costco worker who wants to share your perspective, please <a target="_blank" href="mailto:dreuter@businessinsider.com">contact Dominick via email</a> or text/call/Signal at 646.768.4750. Responses will be kept confidential, and Business Insider strongly recommends using a personal email and a non-work device when reaching out.

The latest sign Costco is having a 'Netflix moment'

<ul class="summary-list"><li><a target="_blank" class="" href="https://www.businessinsider.com/tsmc-making-apple-iphone-chips-helps-us-semiconductor-bet-2024-10">Apple has increasingly used its own silicon chips</a> in its devices in recent years.</li><li>Two Apple execs told The Indian Express that the company has a "tremendous strategic advantage" in doing so.</li></ul>Apple says it has a "secret weapon" in its approach to making the chips that power many of its devices.The iPhone giant has been increasingly relying on <a target="_blank" class="" href="https://www.businessinsider.com/apple-chip-testing-lab-video-iphone-mac-silicon-2023-12">its own chips</a> for new devices, and two of the company's execs recently explained why they feel that gives it an edge.Tim Millet, Apple's vice president of platform architecture at Apple, and Tom Boger, Apple's vice president of Mac product marketing, <a target="_blank" class="" href="https://indianexpress.com/article/technology/tech-news-technology/exclusive-top-execs-explain-apple-chip-philosophy-9670865/">spoke with</a> The Indian Express about the company's silicon chipmaking approach."We don't make a bunch of chips and then decide where we are going to put them," Boger said. "We design our chips from the ground up for our products, and that is a tremendous strategic advantage that we have."The company also benefits from making chips strictly for its own use rather than being a traditional chip-maker that sells to other companies, Millet said."Folks who do make money that way have the burden of adding margin on top of whatever they buy," he told The Indian Express.Apple began making its own chips in 2010, starting with the A4 chip, which was used in the first-generation iPad as well as the iPhone 4. The company has increasingly turned to its own semiconductors in subsequent years — a strategy that gave it more control. However, it also came with added R&amp;D costs and <a target="_blank" class="" href="https://www.businessinsider.com/apple-m1-chip-risk-moving-away-from-intel-macbook-pro-2020-11">impacted the nature of its contracts with chipmakers like Intel</a> and Imagination Technologies.<div type="image" title="Apple M4" height="1356" width="2396" msid="115428143" hostid="261" sizebytes="94872"></div>Apple's latest chips, the M4 Pro and M4 Max, were introduced last month for the Mac.Millet said Apple silicon takes advantage of "three major components, the architecture, the design, and the process technology.""Our fourth tool, really our secret weapon, I think, is our ability to co-design these amazing chips with the system teams and the product designers as they are imagining possibilities," he told The Indian Express.Apple CEO Tim Cook announced in 2022 that <a target="_blank" class="" href="https://www.businessinsider.com/apple-tim-cook-america-us-made-chips-first-time-decade-2022-12">the company would start using chips made in the US for the first time in nearly a decade</a>, sourcing chips from Taiwanese chipmaker TSMC's Arizona plant and becoming "the site's largest customer."The decision came amid President Biden's efforts to boost domestic chip production and lessen reliance on chips manufactured abroad. The <a target="_blank" rel="" href="https://www.businessinsider.com/chips-act-bill-to-boost-us-chipmaking-competition-with-china-2022-7">CHIPS Act</a> he signed into law in 2022 set aside $52.7 billion for American semiconductor research, development, manufacturing, and workforce development, including <a target="_blank" rel="" href="https://www.businessinsider.com/trump-taiwan-china-semiconductor-chips-us-economy-trade-biden-election-2024-7">$39 billion</a> in manufacturing incentives for chip production stateside.<a target="_blank" class="" href="https://www.businessinsider.com/tsmc-making-apple-iphone-chips-helps-us-semiconductor-bet-2024-10">TSMC began producing chips for Apple</a> at one of its Phoenix, Arizona, plants earlier this year, sources familiar with the matter confirmed to BI.

Apple exec explains the company's 'secret weapon' when making its own chips

<ul class="summary-list"><li>Apple Music has released a $450 coffee table book of its top 100 albums list.</li><li>The book, limited to 1,500 copies, includes album analyses and facts.</li></ul>Apple has turned its top 100 albums list into a coffee table book, and it's selling a limited batch for $450 each.When <a target="_blank" class="" href="https://www.businessinsider.com/apple-music-released-its-top-100-albums-list-sparking-debate-2024-5">Apple Music</a> released its ranking of the best albums of all time in May, it sparked debate among music fans. On Monday, it announced that the highly-discussed list is becoming a collector's item."Apple Music: 100 Best Albums" is available for preorder, and the book's description said it's a limited release of only 1,500 copies. Each entry of the 208-page book comes with an analysis of each album's significance and some facts.Apple Music's global creative director and cohead of artist relations, <a target="_blank" class="" href="https://www.businessinsider.com/beats-1-host-zane-lowe-has-2-motivational-quotes-in-his-office-2015-8">Zane Lowe</a>, wrote the foreword."If our list sparks more debate among fans outside of Apple Music and gets people talking passionately about the music they love, then we've done what we set out to do," Lowe previously said.<div type="image" title="Book open to a photo of the &quot;Miseducation of Lauryn Hill&quot; album" height="1297" width="1946" msid="115227638" hostid="261" sizebytes="167448"></div>Apple partnered with Assouline, a New York-based publishing company. Some of Assouline's bestsellers include coffee table books on former tennis star Roger Federer, Barbie, and fashion brand Chanel (its "Chanel: The Impossible Collection" is for sale for over $1,000)."Apple Music: 100 Best Albums" isn't the tech giant's first foray into publishing books. Apple came out with <a target="_blank" class="" href="https://www.businessinsider.com/apple-book-designed-by-apple-in-california-review-highlights-availability-price-2016-11">"Designed by Apple in California</a>" in 2016, which showed designs by former Apple design exec Jony Ive.The 300-page book retailed for $199 for the small size and $299 for the large until it was discontinued in 2019 and was criticized for its price at the time. Business Insider's own 2016 review decided against spending $300 on it.Years after it was pulled from shelves, the design book is going for over 10 times its original price, in some instances, on eBay. One seller had a brand new large book listed for $2,400 as of Tuesday morning.Neither Apple nor Assouline immediately responded to a request for comment from BI. According to the site, the estimated shipping date for the new Apple Music book is January.It's unclear if the profits from this drop will count toward revenue for <a target="_blank" class="" href="https://www.businessinsider.com/apple-earnings-service-growth-iphone-drop-antitrust-google-app-store-2024-5">Apple's Services</a> department. This department includes subscription-based services like Apple Music, and its sales have boomed in recent quarters.

Apple's latest coffee table book is aimed at music lovers and costs $450

The Indian IT services sector is staring at a second consecutive year of muted <keyword id="19965932" type="General" weightage="20" keywordseo="revenue-growth" source="keywords">revenue growth</keyword> due to modest increase in <keyword id="21414675" type="General" weightage="20" keywordseo="tech-spends" source="keywords">tech spends</keyword> in Europe and the US, a domestic rating agency said on Wednesday. Crisil Ratings said it expects the sector to grow at 5-7 per cent in FY25, after a growth of 6 per cent estimated to have been achieved in FY24. The overall industry size is pegged at USD 250 billion and it creates over 50 lakh direct jobs. "The slowdown in technology spend will continue this fiscal, weighing on the revenue growth of IT service providers," said Aditya Jhaver, director at Crisil. The industry is, however, expected to sustain in the key metric of profitability, as the operating profit margins will be stable at 22-23 per cent, the agency said, attributing it to prudent management of <keyword id="19999266" type="General" weightage="20" keywordseo="employee-costs" source="keywords">employee costs</keyword>. Crisil said the sectoral revenues achieved a compounded annual growth rate of 12 per cent for the decade through FY24. High interest rates and economic slowdown in client markets led to a modest single-digit growth in tech spends by companies in the banking, financial services and insurance (BFSI), retail, technology and communications sectors in FY24, the agency said. It said these four sectors account for nearly two-thirds of the industry's revenues. Jhaver said revenue from BFSI and retail segments will continue to be a drag with subdued growth of 4-5 per cent in FY25. Manufacturing and healthcare, which contribute a tenth of the revenue, were the only bright spots and continued double-digit growth in tech spend given the focus on process automation and research and development-based analytics, especially in healthcare. As revenue growth remained subdued, IT service companies pulled back on addition of fresh talent, resulting in headcount reductions by 4 per cent in 2023 by top 12 companies. This, along with the decline in attrition to 13 per cent as of December 2023 from the high of 20 per cent in FY23 provided a breather by limiting higher-cost replacement hiring during FY24, it said. Associate director Joanne Gonsalves said the ratings company expects IT service providers to remain "cautious" on fresh hiring in FY25 too, which will maintain employee utilisation at a healthy level of ~85 per cent. Continued healthy cash generation, strong balance sheets and sizeable cash surplus will keep the credit quality of IT service providers stable, the rating agency said. Players will continue to eye acquisitions, especially small and mid-sized opportunities that could enhance their product baskets and increase digital capabilities, it said. An appreciation in the rupee value or sustained delay in economic revival in key markets amid ongoing geopolitical conflicts could pose downside risks, it added. SEE ALSO:<a href="https://www.businessinsider.in/tech/mobile/news/realme-narzo-70-narzo-70x-5g-smartphones-launched-in-india-starting-at-11999/articleshow/109557895.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/realme-narzo-70-narzo-70x-5g-smartphones-launched-in-india-starting-at-11999/articleshow/109557895.cms" target="_blank">Realme Narzo 70, Narzo 70X 5G smartphones launched in India starting at ₹11,999</a> <a href="https://www.businessinsider.in/tech/news/apple-let-loose-event-scheduled-for-may-7-ipads-expected-to-be-launched/articleshow/109553148.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/news/apple-let-loose-event-scheduled-for-may-7-ipads-expected-to-be-launched/articleshow/109553148.cms" target="_blank">Apple Let Loose event scheduled for May 7 – New iPad models expected to be launched</a><a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8a-may-be-more-expensive-than-its-predecessor-as-per-a-new-leak/articleshow/109499394.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/google-pixel-8a-may-be-more-expensive-than-its-predecessor-as-per-a-new-leak/articleshow/109499394.cms" target="_blank">Google Pixel 8a may be more expensive than its predecessor, as per a new leak</a>

Indian IT sector staring at 2nd straight year of muted revenue growth: Crisil

In response to higher-than-expected tax revenue and a record surplus transfer from the Reserve Bank of India (RBI), the Indian government is considering an 8-10% increase in <keyword id="20018917" type="General" weightage="20" keywordseo="capital-expenditure" source="keywords">capital expenditure</keyword> (capex) for the fiscal year 2025, according to Pantomath Group's quarterly report, "Market Kaleidoscope: Quarterly Market Insights." This adjustment could raise the capex from the previously allocated Rs 11.11 lakh crore, aiming to bolster infrastructure and economic growth. This fiscal boost comes as India reaches a historic financial milestone. The total market capitalization of all stocks listed on the Bombay Stock Exchange (<keyword id="19895774" type="General" weightage="20" keywordseo="BSE" source="keywords">BSE</keyword>) briefly surpassed $5 trillion for the first time, placing India among global giants such as the US, China, Japan, and Hong Kong. India's primary market is set for a dynamic period, with 55 companies planning to raise over Rs 68,000 crore through Initial Public Offerings (IPOs). The first half of FY2025 has already seen 35 mainboard IPOs, collectively raising around Rs 32,000 crore with an average subscription rate of 61 times. The Indian market maintained a positive outlook in the first quarter of FY2025, driven by strong Q4FY24 earnings, favorable economic data, and positive global cues. Despite early June volatility following the 2024 <keyword id="19895394" type="General" weightage="20" keywordseo="lok-sabha" source="keywords">Lok Sabha</keyword> election results, market sentiment improved with the BJP securing 272 seats and a total of 292 seats for the NDA with allied support. This political stability under Prime Minister Narendra Modi's leadership is expected to promote long-term economic growth, with a focus on infrastructure, electric mobility, startup support, power distribution, digital privacy, and healthcare initiatives. Corporate India's performance in the March quarter of FY2024 met expectations, showing double-digit growth in net profit and single-digit revenue increases. Non-lending companies experienced moderate operating margin expansion due to favorable commodity prices and cost controls. The peaking interest rates and continuity of <keyword id="19978691" type="General" weightage="20" keywordseo="government-policies" source="keywords">government policies</keyword> are anticipated to support healthy corporate growth in FY2025. <h2>Growth to continue</h2>The government's push for increased <keyword id="20068449" type="General" weightage="20" keywordseo="ethanol-production" source="keywords">ethanol production</keyword> targets a 20% blending by 2026, benefiting ethanol-heavy sugar companies and promoting biofuel goals. The real estate market is projected to grow significantly, requiring Rs 14 lakh crore in debt financing from 2024 to 2026. This growth will positively impact the banking and financial sectors. Major telecom operators have raised tariffs post-election, potentially improving sector financials and paving the way for sector re-rating. Major cement players are expanding through acquisitions, with an expected 6-7% compounded growth and market dominance by the top five players by March 2025. FMCG Companies expect recovery in rural business due to factors like a normal monsoon, robust crop yields, and government measures, maintaining robust rural demand. The potential roll-out of the FAME 3 Scheme to support <keyword id="19963112" type="General" weightage="20" keywordseo="electric-vehicle-sales" source="keywords">electric vehicle sales</keyword> is anticipated, with a budgetary allocation of around Rs 10,000 crore. Sectors such as auto, cement, defence, railways, consumer durables, energy, and banking are expected to outperform. Lagging sectors like IT and specialty chemicals offer value-buying opportunities at lower levels. The structural bull market for Indian equity is supported by strong domestic fundamentals and government reforms, with a positive medium- to long-term market outlook. Globally, the US market showed resilience, except for the Dow Jones. The Federal Reserve maintained interest rates at 5.25-5.50%, awaiting inflation to move towards the 2% target before considering rate cuts. The US GDP grew at 1.4% annually in Q1 2024, with mixed economic indicators highlighting both strengths and challenges. The Indian <keyword id="19926041" type="General" weightage="20" keywordseo="IPO-market" source="keywords">IPO market</keyword> has seen significant growth, with a surge in companies seeking to list shares and a rise in capital raised. The first half of 2025 saw strong retail investor participation, reflecting confidence in India's growth prospects. Mahavir Lunawat, Managing Director, Pantomath Capital Advisors Private Limited, said, "Favourable market conditions, high liquidity, a conducive growth environment with stable interest rates, and benign inflation have facilitated a boom in the IPO market. The IPO market will experience a stronger pull post-budget. India is set to become the new equity funding frontier for global corporations." He further added. "We are on the brink of sustained, long-term momentum in the IPO market, with this year potentially becoming the best for IPOs. India's solid macroeconomic environment and promising growth prospects create an ideal backdrop for this vibrant IPO market. Additionally, there is robust participation from both domestic institutional investors and retail investors." With the Indian government's potential capex increase and the robust primary market activity, the <keyword id="19948184" type="General" weightage="100" keywordseo="Indian-economy" source="keywords">Indian economy</keyword> is poised for sustained growth. The upcoming period is expected to see heightened market activity, further IPOs, and economic stability, creating a conducive environment for investment and development.

India may boost FY25 capex by 8-10% amid surging revenues and record RBI surplus, says Market Kaleidoscope report

<ul class="summary-list"><li>Payouts to partners at the Big Four consultancies are falling.</li><li>Annual returns are being affected by a slowdown in sales and an increase in the number of partners.</li></ul>Partner payouts at the <a target="_blank" class="" href="https://www.businessinsider.com/big-four-consultancies-deloitte-ey-cut-staff-pwc-accenture-2024-10">Big Four consultancies</a> are falling as demand for professional services declines and firms increase the number of partners.At EY, partner payouts in the UK, where the global consulting and accountancy firm is headquartered, were down 5% this year. UK partners received an average of £723,000 ($938,000) compared to £761,000 ($987,000) the previous year.The firm said in <a target="_blank" class="" href="https://www.ey.com/en_uk/newsroom/2024/10/ey-uk-net-revenues-grew-3-percent-in-a-challenging-market">a press release</a> that the decrease in pay reflected a rise in the number of partners during the 2024 financial year. EY now has 903 partners as of June 2024, up from 866 at the same point in 2023, <a target="_blank" class="" href="https://www.ft.com/content/39095b58-5940-46f3-92e5-759a2923334d">the FT</a> reported.Revenue growth at EY fell from 16% in the previous financial year to just 3% in FY2024. The drop in performance was driven by declines in some of EY's key divisions, with its consulting and strategy business decreasing by 4% and transactions decreasing by 13%."With depressed UK and global deal activity and weak levels of corporate confidence during FY24, we have responded to the market to ensure we have the right platform for continued long-term growth and profitability," said Hywel Ball, EY's outgoing UK managing partner.Senior employees at the Big Four consultancies, which are all privately held, can be <a target="_blank" class="" href="https://www.businessinsider.com/how-to-get-onto-partner-track-make-millions-management-consulting-mckinsey">promoted to partner status</a>, and some are offered equity ownership in the business. In addition to salary and bonuses, equity partners traditionally receive a share of annual profits.At PwC and Deloitte, partners have also seen their payouts drop this year as growth slows.UK partners at PwC took home an average of £862,000 ($1.11 million) this financial year, 5% less than the same period in 2023. <a target="_blank" class="" href="https://www.pwc.co.uk/who-we-are/annual-report.html">PwC reported</a> that its total revenue growth was down to 9% compared to 16% growth in 2023.At Deloitte, partner payouts were down by 4.5% to around £1 million ($1.3 million), leaving equity partners taking home roughly £50,000 less than the previous year.The fall in pay comes as the Big Four — which consists of Deloitte, EY, KPMG, and PwC — attempt to balance operations following the end of the pandemic-era rush on advisory services.Many <a target="_blank" class="" href="https://www.businessinsider.com/consulting-firms-mckinsey-bcg-accenture-workers-leaving-2024-9">consultancies hired rapidly</a> to meet soaring demand in the early 2020s. As the workload slowed, revenues declined. The major firms have been making adjustments in order to balance operations, such as <a target="_blank" class="" href="https://www.businessinsider.com/ey-graduate-hires-start-dates-delayed-slowdown-strategy-consulting-2024-10">delaying start dates</a> for new hires and laying off employees. However, the impact of policies is not expected to be immediate.Despite the current slowdown in growth, many firms believe <a target="_blank" class="" href="https://www.businessinsider.com/ai-questions-consulting-firms-are-answering-for-clients-2024-6">AI</a> will provide a necessary boost to business as more companies look to consultants for advice on how best to get started and optimize their operations.

Partner pay at Big 4 firms is dropping, the latest sign of the consulting slowdown

<ul class="summary-list"><li>Micron has seized the limelight in the AI space after its latest earnings report.</li><li>The stock surged as much as 20% to $115 on the results.</li></ul><a target="_blank" class="" href="https://markets.businessinsider.com/stocks/mu-stock">Micron</a> is stealing the show in the AI space — at least for now — as investors bask in its latest earnings results.The chipmaker blew past expectations with its second-quarter financials, beating both revenue and earnings estimates on Wall Street. The firm pulled $7.75 billion worth of revenue, up 93% from last year, and above estimates of $7.65 billion. Earnings per share, meanwhile, came in at $1.18, above the expected $1.11.That sparked some major optimism for the firm on Thursday. Though its year-to-date gains have badly lagged other AI behemoths like Nvidia, Micron shares rose as much as 20%. Its results also led a rally in other chip stocks like Nvidia, Intel, and Super Micro Computer.Even with daily gains pared to 14% at 12:15 p.m. in New York, the company's year-to-date return now stands at 28%. Trading volume jumped to 42.5 million mid-day Thursday, outpacing interest in other firms in the AI space, like Intel, Tesla, and Palantir.Wall Street, meanwhile, has quickly scaled up its expectations for the chipmaker.Rosenblatt raised its price target on the stock to $250 a share, implying 123% upside from current levels. Analysts pointed to MU's "unambiguous" earnings beat, adding that it believed Micron was in the midst of one of the "biggest semi/memory cycles ever."Bank of America raised its price target for Micron to $125 a share, implying over 30% upside."Despite increasing macro (softer PC, phone demand) headwinds, MU was able to deliver beat/raise results on the back of solid data center demand, including continued growth in its AI-levered high-bandwidth memory (HBM) sales," the bank's strategists said in a note on Thursday."This is a long upcycle in the memory market benefitting Micron and its peers," William Kerwin, a Morningstar tech stock analyst said, speaking to <a target="_blank" href="https://www.youtube.com/watch?v=060CDkU4M-I">Bloomberg</a> shortly after the earnings results. "We expect this upcycle to continue through the next four quarters through calendar 2025. So it exceeded our expectations, and we think the momentum can keep on going."The stock's jump on Thursday seems to have strengthened the bull narrative for stocks. The Nasdaq Composite turned up 1%, eating back its losses from its selloff last week."Investors jumped on this briefest, and shallowest, of dips to load up on equities, with results from Micron Technology providing the trigger," David Morrison, a senior market analyst at Trade Nation, wrote in a note on Wednesday. "Risk appetite feels strong, with investors more concerned by their FOMO, than being the one that 'top-ticks' the market."

Why Micron is the latest AI darling — for today at least

<ul class="summary-list"><li>Apple is set to report fiscal fourth-quarter earnings results after the market close on Thursday.</li><li>Wall Street anticipates $94.36 billion in revenue and adjusted earnings per share of $1.60.</li></ul>All eyes are on <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/AAPL-stock">Apple</a>, the world's largest company by market value, as it prepares to report its fiscal fourth-quarter results after the market closes on Thursday.The quarter, which ended September 30, will encapsulate two weeks of Apple's iPhone 16 sales.The stock was trading at $230.40 at 1:50 p.m. ET, down by about 1.4%.Here's what Wall Street expects Apple to report for its fiscal fourth-quarter, according to Bloomberg data:<ul><li>Revenue: $94.36 billion</li><li>Adjusted earnings per share: $1.60</li></ul>Wall Street will largely be looking to the company's guidance for the upcoming holiday months, which has historically represented Apple's strongest quarter.Top of mind for analysts who cover the stock is whether Apple's AI efforts will pay off and fuel demand for the iPhone 16, or if consumers are taking a wait-and-see approach.The company <a target="_blank" class="" href="https://www.businessinsider.com/apple-intelligence-features-tested-on-iphone-16-pro-max-2024-10">released its first round of "Apple Intelligence" features</a> this week, about six weeks after the release of the iPhone 16. Meanwhile, Apple's core AI features aren't expected to be released for the iPhone until early next year.Here's what Wall Street is looking for in Apple's upcoming earnings report.<h3 id="ed1099ce-654e-4938-929c-540867493d06">Bank of America: 'Look past the iPhone 16 noise'</h3>With some <a target="_blank" class="" href="https://markets.businessinsider.com/news/stocks/apple-stock-price-tumbles-analyst-says-iphone-16-orders-slashed-2024-10">conflicting views on Wall Street</a> about iPhone 16 demand in recent weeks, Bank of America said investors should "look past the iPhone 16 noise to impact of Apple Intelligence.""Contrary to every cycle where all the hardware/software functionality is more or less static through the course of the cycle, we view the cycle as more dynamic with more material software updates that increases the value to the user," <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/bac-stock">Bank of America</a> analyst Wasmi Mohan said in a note last week.Mohan said iPhone demand to pick up over the next few months as Apple's AI features become more robust and expects the company to sell 80 million iPhone units during the holiday season.Mohan is encouraged by a slightly higher average selling price for iPhones as consumers overwhelmingly continue to gravitate towards the more expensive Pro models.Bank of America rates Apple at "Buy" with a $256 price target.<h3 id="401e4f18-6633-40cf-afc8-ee3bb450bbd5">JPMorgan: Expect a beat on results but a miss on guidance</h3>JPMorgan expects Apple to report a strong fourth-quarter earnings report that will likely beat revenue and profit estimates but that it will also disappoint with weaker-than-expected guidance for the holiday quarter."Sell-through for iPhone 16 series started off slower than iPhone 15, and while momentum has improved in recent weeks, the magnitude of the improvement is still putting volumes modestly below last year," <a target="_blank" class="" href="https://markets.businessinsider.com/stocks/jpm-stock">JPMorgan</a> analyst Samik Chatterjee said in a Monday note.Like many analysts on Wall Street, Chatterjee is looking for evidence that AI features will drive a bump in iPhone sales.JPMorgan rates Apple at "Overweight" with a $265 price target.<h3 id="8cc56af8-9576-4342-a49a-9c505626a6a6">Wedbush: Apple will be a $4 trillion company next year</h3>Wedbush analyst Dan Ives isn't budging from him bullish view on Apple heading into the company's financial results. He argues that the iPhone is on the verge of a supercycle as consumers upgrade their phones to get access to Apple Intelligence features."We expect a strong iPhone performance for the September quarter and expect a relatively bullish December iPhone demand commentary from Cook &amp; Co. despite many of the bears recently yelling fire in a crowded theater on the strength of iPhone 16 sales," Ives said in a note on Sunday.Ives says that bearish views on Apple fail to appreciate its installed base of 1.5 billion iPhones that will eventually need to be replaced, as well as the growing Services business that helps monetize the massive user base, and the potential for Apple to be the gatekeeper of AI technologies to a large group of people.Wedbush rates Apple at "Outperform" with a $300 price target.<h3 id="e4503694-e0ad-46c2-9f27-9244aa504759">Goldman Sachs: 'We see upside to consensus'</h3>Goldman Sachs said it sees "upside to consensus revenue and EPS driven by outperformance in iPhone and Services" in a note last week.Goldman analyst Michael Ng expects the company to report $1.61 in earnings per share and $94.5 billion in revenue, which would represent year-over-year growth of 6%.Like other analysts, Ng is focused on the impact of AI and all of the software features Apple is set to release in the next few months."Although Apple Intelligence has yet to be a demand driver, we're encouraged by the rollout of Apple Intelligence features with iOS 18.1 (Week of October 28, includes Writing Tools, notification summaries, Clean Up in Photos), iOS 18.2 (currently in beta for est. December release, includes Genmoji, Image Playground, ChatGPT), and iOS 18.4 (est. March 2025 release, more advanced Siri, personalization, on-screen awareness)," Ng said.<a target="_blank" class="" href="https://markets.businessinsider.com/stocks/gs-stock">Goldman Sachs</a> rates Apple at "Buy" with a $275 price target.

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