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The Fund seeks to track the investment results of the S&P Global 1200 Information Technology 4.5/22.5/45 Capped Index; the Underlying Index, which is designed to measure the performance of global equities in the information technology sector.

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El desplome de Nvidia y otras acciones de IA en 2025 despierta dudas sobre una posible burbuja. ¿Qué advierte Howard Marks?

Inversores en IA en alerta: ¿Se repite la historia de la burbuja puntocom?

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Chipmaker Nvidia Corp., along with other artificial intelligence-linked stocks and exchange-traded funds, have plunged in 2025 despite the growing enthusiasm surrounding the sector. This expert who predicted the dot-com crash compares the AI-linked enthusiasm to instances that &#8220;sometimes leads to bubbles&#8221;.
What Happened: After the release of his latest memo, &#8216;On Bubble Watch,&#8217; in early January, Howard Marks, the co-founder and co-chairman of Oaktree Capital Management, spoke about how AI is poised to change the world in a <a href="https://www.oaktreecapital.com/insights/memo-podcast/behind-the-memo-on-bubble-watch">podcast</a> titled &#8216;Behind the Memo &#8211; On Bubble Watch&#8217; with Harry Whitelaw.
According to Marks, the novelty of AI places no limits on the potential and enthusiasm surrounding the sector. Having &#8220;no historical&#8221; base also aids to the unending enthusiasm for AI.
Highlighting these conditions, Marks said, &#8220;That's a great precursor for the kind of enthusiasm that sometimes leads to bubbles.&#8221;
&#8220;The thrill of the new thing and the fear of missing out is an incredibly powerful combination. I've seen it at work many times and it'll never stop, in my opinion,&#8221; he added.
These predictions came true as the AI-linked stocks and sectors have underperformed in 2025. Despite the emergence of <a href="https://www.benzinga.com/markets/equities/25/02/43995515/jensen-huang-says-deepseek-was-fantastic-next-gen-models-demand-100x-more-compute-as-nvidia-smashes-earnings-records">DeepSeek</a>, which according to many experts will only fuel the demand of AI, the weakness in the sector is evident after unbridled enthusiasm in 2024.
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>Stocks</td>
<td>YTD Performance</td>
<td>One Year Performance</td>
</tr>
<tr>
<td>Nvidia Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>)</td>
<td>-9.76%</td>
<td>46.42%</td>
</tr>
<tr>
<td>Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>)</td>
<td>-1.01%</td>
<td>37.86%</td>
</tr>
<tr>
<td>Microsoft Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>)</td>
<td>-5.16%</td>
<td>-4.32%</td>
</tr>
<tr>
<td>Amazon.com Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>)</td>
<td>-3.75%</td>
<td>19.36%</td>
</tr>
<tr>
<td>Alphabet Inc. Class C (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>)</td>
<td>-9.71%</td>
<td>28.26%</td>
</tr>
<tr>
<td>Meta Platforms Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>)</td>
<td>11.51%</td>
<td>34.13%</td>
</tr>
<tr>
<td>Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>)</td>
<td>-22.74%</td>
<td>55.76%</td>
</tr>
<tr>
<td>Palantir Technologies Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PLTR#NASDAQ">PLTR</a>)</td>
<td>12.92%</td>
<td>253.18%</td>
</tr>
<tr>
<td>Oracle Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/ORCL#NYSE">ORCL</a>)</td>
<td>0.02%</td>
<td>45.59%</td>
</tr>
</tbody>
</table>
</figure>
Broadly, the AI-linked ETFs have also largely underperformed in 2025.
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>ETF Name</td>
<td>YTD Performance</td>
<td>One Year Performance</td>
</tr>
<tr>
<td>iShares US Technology ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYW#NYSE">IYW</a>)</td>
<td>-3.06%</td>
<td>14.53%</td>
</tr>
<tr>
<td>Fidelity MSCI Information Technology Index ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FTEC#NYSE">FTEC</a>)</td>
<td>-3.80%</td>
<td>13.40%</td>
</tr>
<tr>
<td>First Trust Dow Jones Internet Index Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FDN#NYSE">FDN</a>)</td>
<td>1.09%</td>
<td>20.90%</td>
</tr>
<tr>
<td>iShares Expanded Tech Sector ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGM#NYSE">IGM</a>)</td>
<td>-2.19%</td>
<td>16.18%</td>
</tr>
<tr>
<td>iShares Global Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>)</td>
<td>-2.50%</td>
<td>9.97%</td>
</tr>
</tbody>
</table>
</figure>
See Also: <a href="https://www.benzinga.com/markets/equities/25/01/42995814/billionaire-investor-who-predicted-the-dot-com-crash-25-years-ago-warns-of-another-market-storm-brewing-in-the-us">Billionaire Investor Who Predicted The Dot-Com Crash 25 Years Ago Warns Of Another Market Storm Brewing In The US</a>
Why It Matters: Famed investor Marks, who foresaw the dot-com bubble, once again sounded an alarm on Jan. 7, with his latest memo, &#8216;<a href="https://www.benzinga.com/markets/equities/25/01/42995814/billionaire-investor-who-predicted-the-dot-com-crash-25-years-ago-warns-of-another-market-storm-brewing-in-the-us">On Bubble Watch</a>&#8216;. He points to several &#8220;cautionary signs&#8221; in the current market, including soaring valuations, AI hype, and heavy reliance on mega-cap tech stocks. 
Marks also highlights research from JP Morgan Asset Management showing that high valuations like today&#8217;s often precede lackluster returns over the following decade. He cautions that investors should not ignore these warning signs, especially the elevated market valuations. Essentially asking to proceed with caution.
Price Action: The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), which track the S&amp;P 500 index and Nasdaq 100 index, respectively, rose on Friday. The SPY was up 1.56% to $594.18, and the QQQ also advanced 1.56% to $508.10, according to <a href="https://pro.benzinga.com/dashboard">Benzinga Pro</a> data.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/25/02/43622036/warren-buffett-indicator-tops-205-amid-skyrocketing-sp-500-valuations-as-this-billionaire-dot-com-crash-predictor-sounds-alarm">Warren Buffett Indicator Tops 205% Amid Skyrocketing S&amp;P 500 Valuations As Billionaire Who Predicted Dot-Com Crash 25 Years Ago Warns Of Brewing Trouble</a></li>
</ul>
Photo courtesy: Oaktree Capital Management

Billionaire Investor Howard Marks Warns Against AI's 'Powerful' Novelty And FOMO As Nvidia, Other AI-Linked Stocks Tumble In 2025: Says This Enthusiasm 'Sometimes Leads To Bubbles'

Billionaire Ray Dalio cautioned investors in a recent podcast interview with Tucker Carlson saying that the development of artificial intelligence could risk totalitarian social control or even anarchy in the coming years.
Highlighting the unpredictability in the direction of AI's growth, Dalio anticipated a radically different world over the next five years.
What Happened: Dalio recently appeared on a podcast with Carlson on the latter's YouTube channel discussing the trends in the U.S. economy, debt crisis, stock market, and AI.
Discussing the various possibilities of using AI at a "molecular level," from solving medical issues to problems like inflation within an economy, Dalio said that AI was a "two-edged sword". The future could be shaped depending on who has access to and control of such AI tools, he said.
When asked if there was a way to avoid totalitarian social control through AI, Dalio said, "I think there&#8217;s a question of whether you can have social and totalitarian controls or maybe you just have anarchy."
Dalio believes that humanity will undergo an AI technology-induced "time warp," which will radically change the world in the next five years. He also added that quantum computing will be another innovation to look at.
"So the world five years from now is going to be a radically different world. And I don&#8217;t know what that&#8217;s going to look like when you go into the world of quantum computing and what quantum is like in so many different ways. It raises questions of, you know, what is that like?" said Dalio.
See Also: <a href="https://www.benzinga.com/25/02/43932776/mark-cuban-slams-fd-up-healthcare-system-blames-insurance-designed-deductibles-for-patient-bankruptcy">Mark Cuban Calls Deductibles &#8216;The Biggest Problem&#8217; in Healthcare: &#8216;System…Needs To Be Redesigned&#8217;</a>
Why It Matters: Microsoft Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) launched ‘Majorana 1,' last week which is one of its kind quantum computing chip operating in a topological phase of matter. While Satya Nadella termed it a "physics breakthrough," he added that the launch of this chip could shorten the timeline of a possible quantum computing breakthrough.
Similarly, with DeepSeek's emergence, the competition in the AI industry has also intensified. Here is a list of AI and quantum computing-linked exchange-traded funds that investors could consider over the long term.
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>ETF Name</td>
<td>YTD Performnace</td>
<td>One Year Performance</td>
</tr>
<tr>
<td>iShares US Technology ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYW#NYSE">IYW</a>)</td>
<td>7.55%</td>
<td>0.90%</td>
</tr>
<tr>
<td>Fidelity MSCI Information Technology Index ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FTEC#NYSE">FTEC</a>)</td>
<td>-2.57%</td>
<td>17.89%</td>
</tr>
<tr>
<td>First Trust Dow Jones Internet Index Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FDN#NYSE">FDN</a>)</td>
<td>0.80%</td>
<td>22.78%</td>
</tr>
<tr>
<td>iShares Expanded Tech Sector ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGM#NYSE">IGM</a>)</td>
<td>-1.14%</td>
<td>20.91%</td>
</tr>
<tr>
<td>iShares Global Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>)</td>
<td>-0.66%</td>
<td>14.81%</td>
</tr>
<tr>
<td>Defiance Quantum ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QTUM#NASDAQ">QTUM</a>)</td>
<td>-1.93%</td>
<td>37.08%</td>
</tr>
</tbody>
</table>
</figure>
Price Action: The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), which track the S&amp;P 500 index and Nasdaq 100 index, respectively, rose in premarket on Wednesday. SPY was up 0.45% to $596.94, and QQQ advanced 0.75% to $517.16, according to <a href="https://pro.benzinga.com/dashboard">Benzinga Pro</a> data.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/25/02/43936887/amazon-exceeds-walmart-q4-revenue-which-was-77x-lower-in-2000-took-25-years-contrary-to-jeff-bezos-10-year-overnight-success-statement-in-2018">Jeff Bezos Once Said &#8216;Overnight Success&#8217; Takes 10 Years. It Took Amazon 25 Years To Surpass Walmart&#8217;s Revenue</a></li>
</ul>
Photo courtesy: Shutterstock

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Billionaire Ray Dalio Says AI Risks 'Totalitarian Control Or Anarchy' As It Could Reshape World In Next 5 Years: Here Are AI-Linked ETFs For Investors To Consider

As artificial intelligence continues to reshape industries, Savart&#8217;s AI engine, APART, is identifying promising investment opportunities beyond the expensive and overvalued &#8220;AI poster boys&#8221; in both the listed and unlisted space.
What Happened: APART AI is currently favoring the automotive sector, companies providing the &#8220;shovels&#8221; for the AI gold rush, and capital goods industries as top picks for 2025, suggesting that the real value might lie in the supporting infrastructure rather than the most visible AI players.
&#8220;Our APART AI is currently heavy on automobiles, AI-shovel businesses, and capital goods industries,&#8221; said Sankarsh Chanda, founder and CEO of Savart which owns the AI-driven investment research engine, APART AI.
Highlighting a pattern of stock-picking by APART AI among the AI-linked stocks, Chanda added &#8220;We have noticed is that our system is focused on picking those selling shovels rather than the gold sellers in this AI gold rush. This is also likely because of the over valuation of the AI poster boys in both the listed and unlisted space.&#8221;
Unlike traditional asset management and even robo-advisors, APART&#8217;s data-driven approach eliminates human bias and emotional decision-making, focusing on long-term wealth creation, explained Chanda in a conversation with <a href="https://www.benzinga.com">Benzinga</a>.
See Also: <a href="https://www.benzinga.com/general/market-summary/25/02/43764573/strategys-preferred-shares-outpace-peers-by-19-offer-7x-higher-liquidity-over-first-two-weeks-analysis-highlights-very-high-yields">Strategy&#8217;s Preferred Shares Outpace Peers By 19%, Offer 7x Higher Liquidity Over First Two Weeks: Analysis Highlights &#8216;Very High Yields&#8217;</a>
Why It Matters: Talking about the unpredictability surrounding Donald Trump&#8216;s new policies on trade and tax, and its impact on the stock market Chanda said that &#8220;volatility presents a lot of opportunities especially for long term investors and more so for foreign capital looking to enter the American market.&#8221;
&#8220;While the road may be rocky over the next few years, the American story seems stronger than ever,&#8221; he adds.
Addressing the future of AI amid the emergence of DeepSeek's modestly priced models, Chanda said, &#8220;AI is going to be more accessible, affordable and omni-present over the coming years.&#8221;
Price Action: Some exchange-traded funds consisting of AI-linked stocks have given a handsome year-to-date and annual return. Here is a list:
<figure class="wp-block-table is-style-stripes"> 
<table>
<tbody>
<tr>
<td>ETF Name</td>
<td>YTD Performance</td>
<td>One Year Performance</td>
</tr>
<tr>
<td>iShares US Technology ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYW#NYSE">IYW</a>)</td>
<td>3.96%</td>
<td>27.95%</td>
</tr>
<tr>
<td>Fidelity MSCI Information Technology Index ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FTEC#NYSE">FTEC</a>)</td>
<td>2.86%</td>
<td>27.30%</td>
</tr>
<tr>
<td>First Trust Dow Jones Internet Index Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FDN#NYSE">FDN</a>)</td>
<td>9.56%</td>
<td>35.81%</td>
</tr>
<tr>
<td>iShares Expanded Tech Sector ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGM#NYSE">IGM</a>)</td>
<td>5.72%</td>
<td>33.32%</td>
</tr>
<tr>
<td>iShares Global Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>)</td>
<td>3.83%</td>
<td>23.30%</td>
</tr>
</tbody>
</table>
</figure>
On Friday, the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and Invesco QQQ Trust ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) which track the S&amp;P 500 and Nasdaq 100 indices, closed mixed. SPY fell 0.0049% to a value of $609.7, and QQQ was up by 0.42% to end at a value of $538.15, according to <a href="https://pro.benzinga.com/dashboard">Benzinga Pro</a> data.
Read Next:
<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/25/02/43763438/trump-acting-like-a-mafia-don-says-this-economist-as-uncertainty-mounts-businesses-hold-back-in-fear-of-unforeseen-economic-shifts" target="_blank" rel="noreferrer noopener">Trump ‘Acting Like A Mafia Don,' Says This Economist As Uncertainty Mounts, Businesses Hold Back In Fear Of Unforeseen Economic Shifts</a></li>
</ul>
Photo courtesy: Shutterstock

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Hidden Gems? AI Engine APART Highlights Automotive, Undervalued AI, Capital Goods As Top Sectors

International Data Corp cites preliminary data showing that <a target="_blank" href="https://www.benzinga.com/topic/smartphones" rel="noreferrer noopener">global smartphone shipments</a> increased 2.4% to 331.7 million units in the fourth quarter of 2024.
This marks the sixth consecutive quarter of shipment growth, and after two years of decline, the year closed with 6.4% growth and 1.24 billion shipments.
Nabila Popal <a target="_blank" href="https://www.idc.com/getdoc.jsp?containerId=prUS53072325" rel="noreferrer noopener">of IDC</a> noted that vendors successfully adjusted their strategies to drive growth by focusing on promotions, launching devices in multiple price segments, offering interest-free financing plans, and aggressively trading in devices, fueling premiumization and boosting low-end devices, especially in China and emerging markets.
Also Read: <a target="_blank" href="https://www.benzinga.com/analyst-ratings/price-target/25/01/42958251/on-semi-sees-utilization-cuts-as-ev-demand-softens-analyst-warns" rel="noreferrer noopener">ON Semi Sees Utilization Cuts As EV Demand Softens, Analyst Warns</a>
Popal expressed optimism about continued growth in 2025 while flagging the threat of tariffs from the Donald Trump administration, which has triggered uncertainty in the industry.
IDC expects the market to continue growing at a slower pace in 2025 as refresh cycles continue to grow and pent-up demand is fulfilled.
While Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) and Samsung Electronics (OTC:<a class="ticker" href="https://www.benzinga.com/stock/SSNLF#OTC">SSNLF</a>) maintained the top two positions in the fourth quarter and for the year, both companies witnessed year-on-year declines and lost market share to the Chinese vendors this year who drove the overall market by focusing on affordable devices, rapid expansion, and development in China.
Outside of Apple and Samsung, Xiaomi (OTC:<a class="ticker" href="https://www.benzinga.com/stock/XIACF#OTC">XIACF</a>) (OTC:<a class="ticker" href="https://www.benzinga.com/stock/XIACY#OTC">XIACY</a>) came in third for the quarter and the year, with the highest year-on-year growth rate among the top five players. Transsion placed fourth but tied with Vivo for the quarter and Oppo for the year.
Francisco Jeronimo called out Xiaomi, Oppo, Vivo, Honor, Huawei, Lenovo, Realme, Transsion, TCL, and ZTE for their remarkable fourth quarter.
They shipped the highest combined volume ever in a quarter, representing 56% of the global smartphone shipments.
While their core markets remain China and Asia, Jeronimo noted that these brands are expanding their footprint in Europe and Africa thanks to their low-end and mid-range devices. Huawei stands apart, with most of its shipments in the high-end and premium segments.
Also this week, Counterpoint <a target="_blank" href="https://www.benzinga.com/markets/emerging-markets/25/01/42951487/apples-iphone-market-share-declines-in-china-huawei-and-xiaomi-gain-momentum-in-2024-counterpoint" rel="noreferrer noopener">pointed out how</a> iPhones, devoid of their Apple Intelligence features, failed to gain traction in China, making way for the domestic players in 2024.
As per Counterpoint, global smartphone sales grew 4% in 2024, led by Europe, China, and Latin America.
Counterpoint expects AI-capable smartphones to become a norm for mid-range devices. By 2028, Counterpoint expects 90% of smartphones priced above $250 to be Generative AI-capable.
Apple stock surged 28% in last 12 months. Investors can gain exposure to the stock through iShares Global Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>) and Fidelity MSCI Information Technology Index ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FTEC#NYSE">FTEC</a>).
Price Action: AAPL stock traded higher by 0.12% at $234.67 at the last check on Tuesday.
Also Read:
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<li><a href="http://Nvidia, Broadcom, Marvell Positioned For Growth As AI Demand Drives Semiconductor Momentum" target="_blank" rel="noreferrer noopener">Nvidia, Broadcom, Marvell Positioned For Growth As AI Demand Drives Semiconductor Momentum</a></li>
</ul>
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Apple Sees Market Share Decline in 2024 as Chinese Smartphone Brands Surge Globally: IDC

Apple Inc&#8217;s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) smartphone sales declined 0.3% year over year in the third quarter, though demand for the iPhone 16 series, launched in September, held steady compared to previous generations, according to the IDC <a target="_blank" href="https://www.idc.com/getdoc.jsp?containerId=prAP52680124" rel="noreferrer noopener">report</a>.
This performance helped Apple regain its No. 2 position in China&#8217;s smartphone market, achieving a 15.6% market share—just behind Vivo, which led the market with an 18.6% share, boosted by 21.5% growth in shipments.
In a strong comeback, Huawei Technologies Co grew its shipments by 42% yearly to capture 15.3% of the market, following four consecutive quarters of double-digit growth.
Also Read: <a target="_blank" href="https://www.benzinga.com/news/24/10/41526650/apples-ai-powered-future-iphone-growth-surge-by-2026-with-new-iphone-17-ai-integration-analyst-says" rel="noreferrer noopener">Apple&#8217;s AI-Powered Future: iPhone Growth Surge By 2026 With New iPhone 17, AI Integration, Analyst Says</a>
Huawei&#8217;s advanced China-made processor, which stoked patriotic support amid the tense geopolitical backdrop, has driven the brand&#8217;s premium segment success despite U.S. sanctions.
Xiaomi Corp (OTC:<a class="ticker" href="https://www.benzinga.com/stock/XIACF#OTC">XIACF</a>) (OTC:<a class="ticker" href="https://www.benzinga.com/stock/XIACY#OTC">XIACY</a>) also saw gains, ranking fourth with a 14.8% market share as its shipments increased by 12.8%, fueled by a push in both budget-friendly and high-end segments.
Honor, the former Huawei sub-brand, took fifth place with a 14.6% share, though its shipments declined by 22.5% during the quarter.
The overall Chinese smartphone market, the world&#8217;s largest, grew 3.2% year on year to 68.8 million units in the third quarter, marking a fourth straight quarter of growth. IDC analyst Arthur Guo attributed this rise to a &#8220;significant wave of device upgrades&#8221; driving China&#8217;s smartphone recovery.
The performance coincides with China&#8217;s stimulus plans and the upcoming holiday season.
Meanwhile, Apple offered <a target="_blank" href="https://www.benzinga.com/government/24/10/41399541/apple-iphone-16-sees-20-sales-surge-in-china-but-ai-absence-prompts-early-price-cuts" rel="noreferrer noopener">notable promotions for</a> the iPhone 16 in China, with pre-release discounts on platforms like PDD Holdings Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PDD#NASDAQ">PDD</a>) Pinduoduo and Alibaba Group Holding (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) Taobao. Ahead of Singles&#8217; Day, Apple added further price reductions to attract more buyers.
Apple chief Tim Cook <a target="_blank" href="https://www.benzinga.com/markets/equities/24/10/41478952/tim-cook-engages-with-chinas-it-minister-as-iphone-maker-aims-to-enhance-local-user-experience-w" rel="noreferrer noopener">recently met with</a> Jin Zhuanglong, China&#8217;s Minister for Industry and Information Technology. The minister reportedly expressed hopes that Apple will grow its presence in China and collaborate with local firms.
The visit marks Cook&#8217;s second visit to China in 2024. He showcased his visits to an organic farm and historic neighborhoods during his trip.
Needham&nbsp;analyst Laura Martin&nbsp;expects iPhone sales <a target="_blank" href="https://www.benzinga.com/news/24/09/41005053/apple-iphone-to-fuel-96-of-2025-revenue-analyst-says-a-safer-bet-than-ai-heavy-amazon-alphabet-micro" rel="noreferrer noopener">to account for</a> 89%-96% of Apple&#8217;s 2025 revenue.
Apple stock gained 35% in the last 12 months. Investors can gain exposure to the stock through iShares Global Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>) and Vanguard Information Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGT#NYSE">VGT</a>).
Price Action: AAPL stock is up 0.85% at $232.52 at the last check on Friday.
Also Read:
<ul>
<li><a href="https://www.benzinga.com/government/24/10/41522973/intel-triumphs-in-15-year-legal-battle-eu-court-rejects-record-antitrust-penalty" target="_blank" rel="noreferrer noopener">Intel Triumphs In 15-Year Legal Battle, EU Court Rejects Record Antitrust Penalty</a></li>
</ul>
Photo by Apple

Emerging Markets

BABA

Citigourp Global Markets 2% Protected Notes Linked To The Djia

Apple's Q3 Smartphone Sales Slip Despite Strong iPhone 16 Demand, Market Share Dropped Slightly

In a blog post on Tuesday, the International Monetary Fund (IMF) highlighted the potential of artificial intelligence to enhance market efficiency while also posing risks of increased volatility and cyber threats.
What Happened: The IMF&#8217;s Global Financial Stability Report delves into the role of AI in financial institutions and its potential impact on markets. AI&#8217;s rapid data processing capabilities could revolutionize markets, but its adoption remains limited among investors. The report anticipates growth in AI-driven trading, especially in liquid asset classes like equities and bonds, which could lead to market instability. This was evident during the March 2020 market turmoil involving AI-driven ETFs.
Patent data reveals a surge in AI-related innovations for algorithmic trading, indicating a forthcoming wave of technological advancements. The IMF warns that AI might shift investments to less regulated nonbank financial intermediaries, complicating market oversight. 
To tackle these challenges, the IMF suggests enhancing regulation and supervision of AI-related activities, implementing new volatility response mechanisms, and strengthening oversight of nonbank intermediaries.
See Also: <a href="https://www.benzinga.com/markets/cryptocurrency/24/10/41308908/man-who-accidentally-threw-hard-drive-containing-8-000-bitcoins-worth-half-a-billion-dolla?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Man Who Accidentally Threw Hard Drive Containing 8,000 Bitcoins Worth Half A Billion Dollars In Landfill Sues Local City Council For Not Excavating The Site</a>
Why It Matters: The potential impact of AI on financial markets has been a topic of concern for some time. In June, IMF Deputy Chief Gita Gopinath warned about <a href="https://www.benzinga.com/news/24/06/39224309/imfs-gita-gopinath-warns-ai-could-disrupt-financial-markets-supply-chains-and-more-policy-actions-no">AI&#8217;s disruptive potential</a> on financial markets and other sectors, emphasizing the need for policy actions to mitigate risks while harnessing AI&#8217;s benefits. Her comments highlighted the importance of monitoring AI&#8217;s adoption and application across various sectors.
Additionally, the 2024 U.S. presidential election has been identified as a <a href="https://www.benzinga.com/markets/24/10/41125551/why-the-us-presidential-election-will-be-a-watershed-moment-for-artificial-intelligence-in-trading-f">pivotal moment for AI </a>in trading. The election&#8217;s unpredictability, coupled with AI&#8217;s growing role in forecasting for broker-dealers, suggests that AI could face significant challenges in the coming months. This period may serve as a watershed moment for trading intelligence, as election uncertainty could lead to increased market volatility.
Price Action: At the time of writing during Tuesday&#8217;s after-hours market, AI ETFs were showing mixed activity, as per <a href="https://pro.benzinga.com">Benzinga Pro</a>. First Trust Nasdaq Artificial Intelligence and Robotics ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ROBT#NASDAQ">ROBT</a>) was up y 2.47%, Global X Artificial Intelligence &amp; Technology ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AIQ#NASDAQ">AIQ</a>) was up by 1.28% and iShares Global Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>) was up by 2.60%. However, iShares Expanded Tech Sector ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IGM#NYSE">IGM</a>) was down by 1.42%.
Read Next: 
<ul>
<li><a href="https://www.benzinga.com/markets/cryptocurrency/24/10/41306653/anthony-scaramucci-praises-trump-for-shifting-the-crypto-debate-hes-now-forced-the-democra?itm_source=parsely-api" target="_blank" rel="noreferrer noopener">Anthony Scaramucci Praises Trump For Shifting The Crypto Debate: &#8216;He&#8217;s Now Forced The Democrats To Come Back Into The Middle&#8217;</a></li>
</ul>
Disclaimer: This content was partially produced with the help of <a href="https://www.benzinga.com/author/benzinga-neuro" target="_blank" rel="noreferrer noopener">Benzinga Neuro</a> and was reviewed and published by Benzinga editors.
Image Created using AI via Midjourney

General

ROBT

IMF Warns AI In Stock Trading Can Boost Efficiency, But Warns Of Increased Market Volatility

Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) is nearing the launch of a budget smartphone by 2025 to regain market share lost to Huawei&nbsp;Technologies Co and Xiaomi Corp (OTC:<a class="ticker" href="https://www.benzinga.com/stock/XIACF#OTC">XIACF</a>) (OTC:<a class="ticker" href="https://www.benzinga.com/stock/XIACY#OTC">XIACY</a>).
Apple iPhone&#8217;s market share in China <a target="_blank" href="https://www.benzinga.com/news/24/09/40823119/china-is-eating-apples-lunch-where-smartphone-maker-ranks-vs-asian-competitors" rel="noreferrer noopener">slipped to 14%</a>, down from third to sixth place in the second quarter. Huawei bagged the fourth position, and&nbsp;Xiaomi&nbsp;came fifth.
Vivo&nbsp;emerged as the number one brand, OPPO remained second, and HONOR came third in China. Canalys attributed the local brands&#8217; success to the early discounts and promotions, integration of generative artificial intelligence, and their collaboration with regional supply chains.
Also Read: <a target="_blank" href="https://www.benzinga.com/news/24/10/41139084/nvidia-expands-ai-offerings-with-new-open-source-models-and-unreal-engine-5-plugins" rel="noreferrer noopener">Nvidia Expands AI Offerings with New Open-Source Models and Unreal Engine 5 Plugins</a>
Apple is nearing production of an updated iPhone SE dubbed V59 that will become its new entry-level model, Bloomberg <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-10-01/apple-readies-iphone-se-4-upgraded-ipad-air-for-early-2025?srnd=homepage-asia&amp;sref=TBDibEcD" rel="noreferrer noopener">cites</a> familiar sources.
Reportedly, Apple will transition to an edge-to-edge screen, removing the old home button design. The new SE phone will likely support Apple Intelligence.
Needham&nbsp;analyst Laura Martin&nbsp;expects 89%- 96% of Apple&#8217;s 2025 revenue to depend <a target="_blank" href="https://www.benzinga.com/news/24/09/41005053/apple-iphone-to-fuel-96-of-2025-revenue-analyst-says-a-safer-bet-than-ai-heavy-amazon-alphabet-micro" rel="noreferrer noopener">on iPhone sales</a>, underscoring the importance of Apple&#8217;s smartphone strategy.
Apple is also considering iPad upgrades. The company&#8217;s new iPad Air models, dubbed J607 and J637, will likely launch in 2025. A new iPad mini, dubbed J410, will be available by the end of 2024.
Apple&#8217;s updated models include a&nbsp;revamped Mac mini, updated MacBook Pros, and iMacs with the M4 processor and Apple Intelligence features.
However, Barclays analyst Tim Long flagged a <a target="_blank" href="https://www.benzinga.com/news/24/10/41127362/apples-iphone-16-cycle-faces-headwinds-analyst-warns-of-weaker-demand-macro-pressures-potential-earl" rel="noreferrer noopener">potential 3 million</a> iPhone unit cut for the December quarter due to demand weakness.
Apple stock is up over 30% in the last 12 months. Investors can gain exposure to the stock through iShares Global Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>)
and Vanguard Information Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGT#NYSE">VGT</a>).
Price Action: AAPL stock is down 0.23% at $225.69 at the last check on Wednesday.
Also Read:
<ul>
<li><a href="https://www.benzinga.com/news/24/10/41124391/qualcomm-partners-with-stmicroelectronics-to-boost-ai-powered-iot-connectivity" target="_blank" rel="noreferrer noopener">Qualcomm Partners With STMicroelectronics To Boost AI-Powered IoT Connectivity</a></li>
</ul>
Image via Shutterstock

Apple To Launch Budget iPhone in 2025, Aims for Market Share Gains from Huawei and Xiaomi

Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) has appointed Carolina Dybeck Happe <a target="_blank" href="https://blogs.microsoft.com/blog/2024/09/12/microsoft-names-new-executive-vice-president-and-chief-operations-officer/" rel="noreferrer noopener">as its new</a> EVP and COO.
Happe served at GE as SVP and CFO from 2020 until September 2023. Reuters reports that she was pivotal in leading the company&#8217;s turnaround and helped complete the spin-off of energy infrastructure unit GE Vernova in April 2024 after she stepped down from her role as CFO.
Microsoft&#8217;s move coincides with its pursuit of the lead in the cloud services market by solidifying its moat against Amazon.Com Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) Amazon Web Services.
Also Read: <a target="_blank" href="https://www.benzinga.com/news/24/09/40707618/whats-going-on-with-amd-stock-on-wednesday" rel="noreferrer noopener">AMD Taps Former Nvidia Exec to Lead AI Vision, Bolstering Strategic Growth</a>
The hiring also followed the CrowdStrike Holdings, Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CRWD#NASDAQ">CRWD</a>) <a target="_blank" href="https://www.benzinga.com/news/24/09/40791329/microsoft-plans-major-cybersecurity-summit-after-global-it-outage-hits-8-5m-devices-earlier-this-yea" rel="noreferrer noopener">outage that hampered</a> Microsoft devices, Reuters cites D.A. Davidson analyst Gil Luria.
Microsoft made <a target="_blank" href="https://www.benzinga.com/news/24/05/38664730/googles-deepmind-co-founder-mustafa-suleyman-shares-his-exciting-first-month-at-microsoft-truly-tran" rel="noreferrer noopener">another critical hiring</a> earlier this year. In March 2024, the company poached the co-founder of&nbsp;Alphabet Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>) (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>) Google&nbsp;DeepMind&nbsp;AI lab co-founder Mustafa Suleyman from Inflection AI to lead Microsoft&#8217;s AI division.
Microsoft gained over 27% in the last 12 months. Investors can gain exposure to the stock through iShares Global Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>) and Vanguard Information Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGT#NYSE">VGT</a>).
<h2 class="wp-block-heading">Microsoft Stock Prediction For 2024</h2>
Equity research analysts on and off Wall Street typically use earnings growth and fundamental research as a form of valuation and forecasting. But many in trading turn to technical analysis as a way to form predictive models for share price trajectory.
Some investors look to trends to help forecast where they believe a stock could trade at a certain point in the future. Looking at Microsoft, an investor could make an assessment about a stock's long term prospects using a moving average and trend line. If they believe a stock will remain above the moving average, which many believe is a bullish signal, they can extrapolate that trend into the future using a trend line. 
For Microsoft, the 200-day moving average sits at $412.21, according to <a href="https://pro.benzinga.com/">Benzinga Pro</a>, which is below the current price of $427.0. For more on charts and trend lines, <a href="https://pro.benzinga.com/">see a description here.</a>
Traders believe that when a stock is above its moving average, it is a generally bullish signal, and when it crosses below, it is a more negative signal. Investors could use trend lines to make an educated guess about where a stock could trade at a later date if conditions remain stable.
Price Action: MSFT stock traded lower by 0.19% at $426.21 premarket at the last check on Friday.
Also Read:
<ul>
<li><a href="https://www.benzinga.com/news/24/09/40687996/microsofts-ai-pcs-stumble-with-game-compatibility-report" target="_blank" rel="noreferrer noopener">Microsoft&#8217;s AI PCs Stumble With Game Compatibility: Report</a></li>
</ul>

Management

CRWD

Microsoft Hires Former GE CFO Carolina Dybeck Happe As COO To Boost Cloud And AI Focus

On Tuesday, Brussels accused Microsoft Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) of engaging in <a target="_blank" href="https://www.benzinga.com/markets/equities/24/05/38787304/microsoft-faces-heightened-eu-scrutiny-over-teams-software-report" rel="noreferrer noopener">anti-competitive behavior</a> by bundling its Teams app with its Office suite.
The EU&#8217;s charge sheet alleges that this bundling gives Teams an undue advantage, harming competitors such as Atlassian Corp&#8217;s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TEAM#NASDAQ">TEAM</a>) Slack and Zoom (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ZM#NASDAQ">ZM</a>), Reuters reports.
On Tuesday, the European Union issued a formal charge sheet to Microsoft, outlining concerns that integrating Teams with Office unfairly disadvantages other video conferencing apps.
Also Read: <a target="_blank" href="https://www.benzinga.com/markets/equities/24/06/39428719/whats-going-on-with-nvidia-stock-friday" rel="noreferrer noopener">Nvidia CEO Predicts $1 Trillion Overhaul for AI Data Centers</a>
Margrethe Vestager, the EU&#8217;s executive vice president for competition policy, stated that if Microsoft&#8217;s conduct is confirmed, it would be illegal under EU competition rules.
In April, Microsoft attempted to <a target="_blank" href="https://www.benzinga.com/government/24/04/38017994/microsoft-decouples-teams-from-office-globally-in-response-to-antitrust-concerns-report" rel="noreferrer noopener">address regulatory concerns</a> by proposing to unbundle Teams from Office products beyond Europe.
Microsoft aims to settle the case to avoid formal charges and a potential fine of up to 10% of its annual global revenues.
Meanwhile, the company is also <a target="_blank" href="https://www.benzinga.com/government/24/04/38299939/eu-clears-microsofts-13b-openai-investment-from-formal-probe-a-relief-for-tech-giants" rel="noreferrer noopener">facing heightened scrutiny</a> over its $13 billion partnership with OpenAI, with Brussels considering a full probe.
The European Commission is focusing on Microsoft and investigating other major tech companies.
Over the last decade, Microsoft doled out $1.71 billion (1.6 billion euros) in EU antitrust fines.
Microsoft stock gained over 36% in the last 12 months. Investors can gain exposure to the stock via SPDR Select Sector Fund &#8211; Technology (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>) and iShares Global Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>).
Price Action: MSFT shares are trading higher by 0.08% at $447.63 at&nbsp;the last check on Tuesday.
Also Read: <a target="_blank" href="https://www.benzinga.com/news/24/06/39318448/microsoft-is-betting-big-on-ai-outpacing-rivals-with-new-strategy" rel="noreferrer noopener">Microsoft Is Betting Big on AI, Outpacing Rivals with New Strategy</a>
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Shutterstock

Regulations

Eurozone

Legal

TEAM

EU Charges Microsoft with Anti-Competitive Practices Over Teams Bundling

Apple Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/aapl#NASDAQ">AAPL</a>) has regained its position as the world&#39;s most valuable company, topping Microsoft Corp. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/msft#NASDAQ">MSFT</a>). This achievement marks a significant milestone, driven by Apple&#39;s recent announcement related to its generative AI initiative called &quot;Apple Intelligence&quot;.
These potential AI initiatives generated optimism about future iPhone generations and likely revenue increases. Apple Intelligence will be available for the iPhone 15 Pro, iPads, and Macs running Apple&#39;s M1 series chips and newer models starting this fall. This could even result in a rebound in iPhone sales following recent declines in fiscal performance.
<h3>Market Capitalization and Recent Performance</h3>
Thanks to investor optimism surrounding its growth prospects, particularly in AI, Apple just logged its best three-day run since 2020, per Bloomberg. Following a robust rally, Apple closed with a market capitalization of $3.285 trillion on Jun 13, 2024, narrowly surpassing Microsoft at $3.282 trillion.
This is the first time since January that Apple has exceeded Microsoft in market value, reflecting recent reshufflings among Wall Street&#39;s top stocks. In fact, earlier in the week, Apple briefly fell behind Nvidia Corp. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/nvda#NASDAQ">NVDA</a>) in market capitalization. However, investors have shown confidence in Apple&#39;s potential as a likely AI winner, fueling its recent gains.
<h3>Analyst Insights</h3>
Bank of America analyst Wamsi Mohan highlighted the potential of AI functionalities to drive a significant upgrade cycle for Apple, potentially raising average selling prices and boosting revenue in the coming years, as quoted on Bloomberg.
<h3>Price Target</h3>
Based on short-term price targets offered by 30 analysts, the average price target for Apple comes to $206.96. The forecasts range from a low of $164.00 to a high of $275.00. And the current price of Apple is $214.24.
<h3>What Lies Ahead?</h3>
So far, Apple&#39;s AI initiatives have been well-received by investors. However, stiff competition awaits Apple in the AI space. Stocks with more direct exposure to AI, such as Microsoft, Amazon.com Inc., Alphabet Inc., and Meta Platforms Inc., have shown stronger performance in 2024. Nvidia, in particular, has seen immense gains due to its prominent role in AI development.
Plus, Apple&#39;s association With ChatGPT has received a mixed response. Ben Wood, chief analyst at CCS Insight, and Tesla chief Elon Musk believe that ChatGPT integration may create deeper problems for the firm, as quoted on BBC.
Investors should note that Apple&#39;s competitors have faced several AI hiccups during the initial phase of the rollout. Apple might also experience similar hiccups. Hence, it is better to track the company with the ETF approach. The basket approach minimizes the company-specific concentration risks.
Apple-heavy ETFs include the likes of Technology Select Sector SPDR Fund (ARCA:XLK), iShares Global Tech ETF (ARCA:IXN) and iShares U.S. Technology ETF (ARCA:IYW). Incidentally, these ETFs have solid exposure to Microsoft&mdash;the second-most valuable company and an AI winner.
<a href="https://www.zacks.com/stock/news/2288265/etfs-in-focus-as-apple-reclaims-most-valuable-title?cid=CS-BENZ-FT-etf_news_and_commentary-2288265">To read this article on Zacks.com click here.</a>

ETFs

ETFs in Focus as Apple Reclaims Most Valuable Title

Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) shares closed 1.91% lower on Monday in reaction to the highly anticipated Worldwide Developers Conference (WWDC) 2024, where the Cupertino tech giant unveiled new <a href="https://www.benzinga.com/news/24/06/39256948/tim-cook-announces-apple-intelligence-for-iphones-calls-it-next-big-step-tremendously-excited">advancements in artificial intelligence.</a>
What Happened: At WWDC 2024, Apple introduced &#8220;Apple Intelligence,&#8221; a systemwide software update that promises to offer a personalized generative AI experience for users. 
The new iOS 18, powering its flagship devices, allows for a more customizable iPhone home screen and includes enhanced versions of its in-house apps. Siri, the voice assistant, will now better understand natural language, process contextual information and perform actions within apps.
The AI features will be integrated with the latest device software, enabling users to summarize text and generate content such as personalized birthday animations. Privacy remains a core focus, with most AI processing happening on the device itself rather than in the cloud.
Apple also announced a partnership with Microsoft Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NYSE">MSFT</a>)&#8217;s OpenAI to bring ChatGPT to its devices and showcased the latest operating system for its Vision Pro mixed-reality headset and iPhone. Vision Pro will be available in eight additional countries, including Australia, Canada, China, France, Germany, Hong Kong, Japan, Singapore and the U.K. starting in June.
<h1 class="wp-block-heading">Why Are Apple Shares Falling After WWDC 2024?</h1>
The market had higher expectations from Apple, particularly in terms of monetizing the announced innovations. 
No new products were launched, except for the expansion of Vision Pro into new markets. Apple&#8217;s strategy to integrate Siri with ChatGPT highlights the existing gap compared to OpenAI in the realm of large language models (LLMs).
Historically, Apple&#8217;s stock performance during past WWDC events has been lackluster. Over the past 10 editions, Apple shares have more often closed down rather than up following these events.
<figure class="wp-block-table is-style-stripes"> 
<table>
<thead>
<tr>
<th>Apple WWDC</th>
<th>AAPL %chg on WWDC</th>
</tr>
</thead>
<tbody>
<tr>
<td>June 4, 2014</td>
<td>-0.7%</td>
</tr>
<tr>
<td>June 8, 2015</td>
<td>-0.7%</td>
</tr>
<tr>
<td>June 13, 2016</td>
<td>-1.5%</td>
</tr>
<tr>
<td>June 5, 2017</td>
<td>-1.0%</td>
</tr>
<tr>
<td>June 4, 2018</td>
<td>+0.8%</td>
</tr>
<tr>
<td>June 3, 2019</td>
<td>-1.0%</td>
</tr>
<tr>
<td>June 22, 2020</td>
<td>+2.6%</td>
</tr>
<tr>
<td>June 7, 2021</td>
<td>+0.0%</td>
</tr>
<tr>
<td>June 6, 2022</td>
<td>+0.5%</td>
</tr>
<tr>
<td>June 5, 2023</td>
<td>-0.8%</td>
</tr>
<tr>
<td>June 10, 2024</td>
<td>-1.9%</td>
</tr>
</tbody>
</table>
</figure>
<h1 class="wp-block-heading">Not A Broader Tech Selloff</h1>
Monday&#8217;s decline in Apple shares appears company-specific, as the broader tech sector showed gains.
Among the &#8220;Magnificent Seven,&#8221; only Apple and Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) experienced declines, while the tech-heavy Nasdaq 100, as tracked by the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>), rose by 0.3%.
Key exchange-traded funds with significant exposure to Apple also showed gains:
<ul>
<li>Technology Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>) up 0.1%</li>
<li>iShares Global Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>) up 0.2%</li>
<li>Vanguard Information Technology ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGT#NYSE">VGT</a>) up 0.3%</li>
</ul>
Read Now: <a href="https://www.benzinga.com/analyst-ratings/analyst-color/24/06/39257592/economist-warns-crash-of-a-lifetime-is-coming-predicts-s-p-500-to-plummet-86-from-t">Economist Warns &#8216;Crash Of A Lifetime&#8217; Is Coming, Predicts S&amp;P 500 To Plummet &#8216;86% From The Top&#8217;</a>
Photo: Courtesy Apple

Large Cap

Sector ETFs

Apple Shares Slide Nearly 2% On WWDC 24 Day: Magnificent 7, Tech Stocks Hold Gains

Apple Inc&#8217;s&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) iPhone sales in China increased by 52% year-on-year in April, Reuters cites from industry reports. The stock price gained after the report.
The iPhone maker&#8217;s results follow a softer performance earlier this year in the leading smartphone market. Apple battled rivalry in the premium market from local rivals like&nbsp;Huawei Technologies Co.
According to the China Academy of Information and Communications Technology (CAICT),&nbsp;smartphone sales in China increased by 25.5% to 22.7 million units in April,&nbsp;Reuters notes.
Apple&#8217;s shipments in China increased by 12% in March, marking a significant improvement from the first two months of 2024, when the company noted a 37% decline in sales.&nbsp;
The growth reflected price discounts from Apple and its Chinese retailers to boost sales.
Previously, analysts expected&nbsp;<a target="_blank" href="https://www.benzinga.com/government/24/03/37941515/apples-iphone-sales-faces-sharp-decline-in-china-amid-rising-competition" rel="noreferrer noopener">iPhone sales to</a>&nbsp;continue their downward trajectory, with projections that they would lead the market&#8217;s decline by over 20%.
Meanwhile, Apple made every effort to&nbsp;<a target="_blank" href="https://www.benzinga.com/government/24/05/38708040/apple-reverses-sales-decline-in-china-with-impressive-march-shipment-growth" rel="noreferrer noopener">boost ties with&nbsp;</a>China, including launching a new Apple store in Shanghai, and company chief Tim Cook attended the China Development Forum in Beijing.
Apple stock gained over 7% in the last 12 months.&nbsp;Investors can gain exposure to the stock via&nbsp;IShares Global&nbsp;Tech ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>) and&nbsp;IShares U.S.&nbsp;Technology ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IYW#NYSE">IYW</a>).
Price Action: AAPL shares traded higher by 1.67% to $193.15 premarket at the last check on Tuesday.
Image Source &#8211; Apple

Movers

What's Going On With Apple Stock On Tuesday?

The world&#39;s largest software maker &mdash; Microsoft (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/msft#NASDAQ">MSFT</a>) &mdash; reported strong third-quarter fiscal 2024 results, beating earnings and revenue estimates. driven by strong demand for cloud and artificial intelligence offerings. 
Buoyed by robust results, shares of MSFT jumped as much as 5% in after-market hours. Investors could tap the opportune moment in this software leader through ETFs having double-digit exposure to Microsoft. These are Select Sector SPDR Technology ETF (ARCA:XLK), MSCI Information Technology Index ETF (ARCA:FTEC), iShares Global Tech ETF (ARCA:IXN), Vanguard Information Technology ETF (ARCA:VGT) and iShares Dow Jones US Technology ETF (ARCA:IYW).
<h3>Earnings in Focus</h3>
Earnings per share came in at $2.94, beating the Zacks Consensus Estimate of $2.81 and were 20% higher than the year-ago earnings. Revenues grew 17% year over year to $61.9 billion, edging past the consensus estimate of $60.63 billion. 
Intelligent Cloud revenues jumped 21% year over year. Sales of Office 365 Commercial and Dynamic 365 climbed 15% and 23%, respectively. Sales of the flagship Azure computing platform grew 31% year over year. 
The software maker invested billions of dollars into AI in a bid to turbocharge its growth, particularly its cloud computing services, and is now reaping the fruits. About 7% of the increase in Azure revenues came from AI. Microsoft CEO Satya Nadella said on a call that 65% of Fortune 500 companies are using the Azure service that delivers OpenAI&#39;s technology to businesses. Demand for generative AI will continue to fuel Microsoft&#39;s cloud business. 
Microsoft is now emphasizing AI transformation through its new offerings like Microsoft Copilot. &quot;Microsoft Copilot and Copilot stack are orchestrating a new era of AI transformation, driving better business outcomes across every role and industry&quot; Nadella said. 
Microsoft expects revenues of $63.5-$64.5 billion for fiscal fourth-quarter 2024. The Zacks Consensus Estimate is pegged at $64.49 billion.
<h3>ETFs in Focus</h3>
Select Sector SPDR Technology ETF (ETF:XLK) 
Select Sector SPDR Technology ETF is the most popular and liquid ETF in the technology space, with AUM of $61.8 billion and an average daily volume of 7 million shares. It offers broad exposure to the technology sector and follows the Technology Select Sector Index. Select Sector SPDR Technology ETF holds about 65 securities in its basket, with Microsoft occupying the top position at 23.5%. 
Select Sector SPDR Technology ETF charges 9 bps in fees per year from investors and has a Zacks ETF Rank #1 with a Medium risk outlook. 
MSCI Information Technology Index ETF (FTEC) 
MSCI Information Technology Index ETF is home to 303 technology stocks with AUM of $9.1 billion. It follows the MSCI USA IMI Information Technology Index. Microsoft is the top firm with an 18.3% allocation. 
MSCI Information Technology Index ETF has 0.08% in expense ratio, while volume is solid at 253,000 shares a day. It carries a Zacks ETF Rank #1 with a Medium risk outlook. 
iShares Global Tech ETF (ETF:IXN) 
iShares Global Tech ETF provides exposure to electronics, computer software and hardware, and informational technology companies by tracking the S&amp;P Global 1200 Information Technology 4.5/22.5/45 Capped Index. Holding 117 stocks in its basket, Microsoft occupies the top spot with a 20.1% share. 
iShares Global Tech ETF has amassed $4.2 billion in its asset base and trades in a good volume of 223,000 shares a day, on average. The expense ratio is 0.41%. 
Vanguard Information Technology ETF (ETF:VGT) 
Vanguard Information Technology ETF manages about $61.3 billion in its asset base and provides exposure to 313 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Here, MSFT occupies the top position with an 18.3% share. 
Vanguard Information Technology ETF has an expense ratio of 0.10%, while volume is solid at nearly 434,000 shares. It has a Zacks ETF Rank #1 with a Medium risk outlook. 
iShares U.S. Technology ETF (ETF:IYW) 
iShares U.S. Technology ETF provides exposure to U.S. electronics, computer software and hardware, and informational technology companies. It tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, holding 131 securities in its basket. Of these, Microsoft occupies the top position in the basket, with 18.6% of the assets. 
iShares Dow Jones US Technology ETF has AUM of $15.8 billion and charges 40 bps in fees and expenses. Volume is good as it exchanges nearly 909,000 shares a day. IYW has a Zacks ETF Rank #1 with a Medium risk outlook.
<a href="https://www.zacks.com/stock/news/2263342/etfs-to-buy-as-cloud-ai-power-microsoft-s-q3-earnings?cid=CS-BENZ-FT-etf_news_and_commentary-2263342">To read this article on Zacks.com click here.</a>

Earnings

ETFs to Buy as Cloud, AI Power Microsoft's Q3 Earnings

Citigroup&nbsp;analyst Tyler Radke maintained&nbsp;Microsoft Corp&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) with a Buy and lowered the&nbsp;<a target="_blank" href="https://www.benzinga.com/quote/MSFT/analyst-ratings" rel="noreferrer noopener">price target from $480 to $475</a>.
The analyst remained positive on Microsoft ahead of third-quarter results as his quarterly inputs point to strengthening Azure growth trends boosted again by AI services, with solid CoPilot interest, though more bite-sized deals initially.&nbsp;
Radke&#8217;s strong inputs and a more positive PC backdrop against conservative guidance should yield room for upside across key KPIs (including Azure, which should reaccelerate), while he expects continued cost discipline to drive strong EPS upside.&nbsp;
BofA Securities&nbsp;analyst Brad Sills reiterated a Buy rating on Microsoft with a price target of $480.
Following a round of calls with nearly a dozen key Microsoﬅ partners, the analyst expects a healthy 1% upside to his third-quarter revenue estimate of $60.5 billion, stemming from sustained strength in Azure and M365.&nbsp;
The analyst expects FX to provide a 50bps tailwind to revenue growth, primarily in line with expectations heading into the quarter.&nbsp;
He expects a 1% upside to his estimate for Azure growth of 28.0% cc, given positive system integrator partner feedback suggesting stable, healthy migration of new workloads to the cloud platform, relative strength in the Microsoﬅ security stack, and ramping usage of Azure AI and Microsoﬅ security stack.
Sills expects a $220 million upside to his PBP segment revenue estimate to $19.5 billion from better Commercial Office growth, driven by better ASP (average selling prices) on sustained E3/E5 strength and early traction with M365 copilot. Channel feedback suggests some uptick in Copilot activity, primarily in the pipeline, but also early adoption.&nbsp;
The analyst expects $50 million of downside to his MPC revenue estimate of $14.9 billion, driven by weaker PCs in the calendar first quarter.&nbsp;
IDC reported preliminary first-quarter PC growth of +2% Y/Y versus its prior expectation for +4% Y/Y when Microsoﬅ provided guidance.
Sills noted that the next AI catalyst for Microsoﬅ shares will prove that critical AI-related product cycles are gaining traction via incremental growth metrics such as M365 Copilot users or via accelerating Commercial Office ASP (from 6% to 7%). Microsoﬅ&#8217;s shares are pricing in AI-driven revenue and FCF acceleration, per the analyst.&nbsp;
However, he noted the multiple holding with an AI cycle that is gaining momentum given the scale of the AI opportunity (IDC sizes the AI market to $944 billion by 2027). As per Sills, the stock should then compound at the FCF growth rate, accelerating toward the low 20s, with incremental contribution from AI in the coming quarters. The analyst noted Microsoﬅ as a top pick in soﬅware.
Microsoft stock gained over 40% in the last 12 months. Investors can gain exposure to the stock via&nbsp;IShares Global Tech ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>) and&nbsp;Vanguard Information Tech ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGT#NYSE">VGT</a>).
Price Action: MSFT shares traded lower by 1.5% at $405.40 on the last check Thursday.
Also Read: <a href="https://www.benzinga.com/news/24/04/38294517/linkedin-unveils-premium-pages-new-subscription-plan-offers-exclusive-growth-tools-for-small-busines" target="_blank" rel="noreferrer noopener">LinkedIn Unveils Premium Pages, New Subscription Plan Offers Exclusive Growth Tools For Small Businesses</a>
Photo via Shutterstock

Analyst Color

Price Target

Reiteration

Microsoft's Strategic Emphasis on AI and Cloud Services Signals Strong Future Performance: Analysts

Microsoft Corp&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) has unveiled a new hub in London for its recently established&nbsp;<a target="_blank" href="https://www.benzinga.com/markets/cryptocurrency/23/11/36031993/microsoft-marks-its-largest-uk-investment-with-major-focus-on-ai-development" rel="noreferrer noopener">consumer AI division</a>, led by AI scientist and engineer Jordan Hoffmann, who the company recruited from the notable AI startup Inflection AI.&nbsp;
This move follows Microsoft&#8217;s investment in Inflection AI last year and CEO Satya Nadella&#8217;s introduction of a consumer AI division three weeks ago. Inflection AI&#8217;s founders, including Mustafa Suleyman of Deepmind fame, are leading the division, TechCrunch&nbsp;<a target="_blank" href="https://techcrunch.com/2024/04/08/microsoft-ai-gets-a-new-london-hub-headed-up-by-former-inflection-and-deepmind-scientist-jordan-hoffmann/" rel="noreferrer noopener">reports</a>.&nbsp;
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/news/23/11/36021642/microsoft-president-makes-startling-revelations-on-arrival-of-advanced-ai" rel="noreferrer noopener">Microsoft President Makes Startling Revelations on Arrival of Advanced AI</a>
Hoffmann, a former Deepmind research scientist who transitioned to Inflection AI in 2022, has been recognized by Suleyman as an &#8220;exceptional AI scientist and engineer.&#8221;
Hoffmann is set to head the London unit, with Suleyman reporting directly to Nadella from the U.S.
Microsoft plans to seek new AI talents to join Hoffmann at its Paddington office, focusing on developing new language models and related infrastructure.&nbsp;
This initiative is part of Microsoft&#8217;s broader £2.5 billion ($3.15 billion) investment in the U.K. over the next three years, promising to expand its data center footprint and train over a million people for the AI economy.&nbsp;
The investment will expand the data center footprint to include sites in London and Cardiff, potentially extending to northern England, and deliver over 20,000 of the most advanced GPUs to the U.K. by 2026.&nbsp;
Additionally, the company has committed to a multimillion-dollar initiative to train one million individuals in the skills needed to develop and operate AI.
The U.K. is a leading country in AI R&amp;D investment and hosts&nbsp;Google&#8217;s&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOG#NASDAQ">GOOG</a>) (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GOOGL#NASDAQ">GOOGL</a>) DeepMind, which signals a potential talent competition between major AI players.&nbsp;
Microsoft stock gained 47% in the last 12 months. Investors can gain exposure to the stock via&nbsp;IShares Global Tech ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>) and&nbsp;Vanguard Information Tech ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/VGT#NYSE">VGT</a>).
Price Actions:&nbsp;Microsoft shares traded higher by 0.24% at $426.59 on the last check Monday.
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/government/24/04/38017994/microsoft-decouples-teams-from-office-globally-in-response-to-antitrust-concerns-report" rel="noreferrer noopener">Microsoft Decouples Teams from Office Globally in Response to Antitrust Concerns: Report</a>
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Shutterstock

Microsoft's £2.5B UK Investment Fuels AI Talent Hunt and Data Center Expansion

Apple Inc&#8217;s&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) CEO, Tim Cook, inaugurated a new store in Shanghai, showcasing the tech giant&#8217;s ongoing commitment to China as a critical market and manufacturing hub.&nbsp;
The store opening, which took place amid an atmosphere of enthusiastic applause, marked Cook&#8217;s&nbsp;<a target="_blank" href="https://www.benzinga.com/government/24/03/37479073/apples-iphone-sales-dip-24-in-china-falls-to-fourth-place-behind-vivo-and-huawei" rel="noreferrer noopener">presence in Shanghai</a>&nbsp;as part of a highly publicized visit.&nbsp;
The opening of Apple&#8217;s eighth store in Shanghai was part of Cook&#8217;s efforts to fortify Apple&#8217;s relationship with China, where he engaged with local celebrities, tasted local cuisine, and met with critical suppliers like&nbsp;BYD Co&nbsp;and&nbsp;Lens Technology Co, Bloomberg&nbsp;<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-03-21/apple-ceo-opens-new-shanghai-store-in-show-of-china-commitment?srnd=technology-vp&amp;sref=TBDibEcD" rel="noreferrer noopener">reports</a>.
Cook&#8217;s visit underscores his and Apple&#8217;s commitment to maintaining and strengthening ties with China.&nbsp;
This commitment is evident in his meetings with suppliers and his promotion of Apple products, despite the challenges posed by geopolitical tensions, the Chinese government&#8217;s restrictions on iPhone usage among state agencies, and the competitive threat from Huawei Technologies Co.
In the first six weeks of the year, iPhone sales in China plummeted by 24%, pushing Apple to the fourth spot among the country&#8217;s smartphone vendors, according to Counterpoint Research.&nbsp;
Vivo, hailing from Dongguan and known for targeting the budget-friendly market, surpassed Apple and became China&#8217;s leading smartphone seller. While both companies saw sales declines amidst a 7% contraction in&nbsp;
China&#8217;s overall smartphone market,&nbsp;Huawei Technologies Co.&nbsp;saw its market share jump to 16.5% thanks to its Mate 60 Pro series and a rise in nationalist buying trends.&nbsp;
Amid a general market slowdown affecting iPhone performance, Apple initiated rare discounts on its website in January, and online resellers cut prices by as much as $180.&nbsp;
Despite these efforts and steep discounts on the iPhone 15 series by resellers, Apple&#8217;s sales in China fell by 13% to $20.8 billion in the December quarter, marking a significant downturn.
The year 2023 saw Apple diversifying&nbsp;<a target="_blank" href="https://www.benzinga.com/government/23/02/31085106/apples-chinese-suppliers-sped-to-migrate-production-beyond-country-vietnam-and-india-key-beneficiari" rel="noreferrer noopener">production beyond China</a>&nbsp;in India and Vietnam to dodge geopolitical tensions.&nbsp;
The iPhone maker has gained 8.4% in stock value in the last 12 months. Investors can gain exposure to the stock via Fidelity MSCI Information Technology Index ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FTEC#NYSE">FTEC</a>) and IShares Global Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>).
Price Action:&nbsp;AAPL shares are trading lower by 3.58% at $172.27 on the last check Thursday.
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/news/23/10/35154858/apple-rival-huawei-doubles-smartphone-sales-as-us-restrictions-prepare-to-kick-in" rel="noreferrer noopener">Apple Rival Huawei Doubles Smartphone Sales As US Restrictions Prepare to Kick In</a>
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Shutterstock

Tim Cook Launches New Apple Store in Shanghai as iPhone Struggles in China

Microsoft Corp&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) has&nbsp;<a target="_blank" href="https://www.benzinga.com/government/24/01/36590298/microsoft-grapples-with-security-concerns-over-beijing-ai-lab" rel="noreferrer noopener">come under fire</a>&nbsp;from a second U.S. Senator, intensifying the scrutiny over its operations in China, especially after a Bloomberg Businessweek investigation revealed the extent of Bing search engine&#8217;s censorship within the country.&nbsp;
Senator Marco Rubio, a Republican from Florida, criticized Microsoft&#8217;s compliance with the Chinese government&#8217;s censorship demands, stating that no U.S. company should defend such actions.&nbsp;
This criticism follows revelations that Bing has increasingly filtered out content related to human rights, democracy, climate change, and more to align with Beijing&#8217;s policies, Bloomberg&nbsp;<a target="_blank" href="https://www.bloomberg.com/news/articles/2024-03-20/microsoft-attracts-growing-criticism-for-censoring-bing-in-china?srnd=technology-vp&amp;sref=TBDibEcD" rel="noreferrer noopener">reports</a>.
Also Read:&nbsp;<a target="_blank" href="https://www.benzinga.com/news/23/05/32280754/microsofts-linkedin-slashes-716-jobs-under-its-china-strategy" rel="noreferrer noopener">Microsoft&#8217;s LinkedIn Slashes 716 Jobs Under Its China Strategy</a>
Senator Rubio emphasized that American companies operating in China inadvertently support the Chinese Communist Party&#8217;s objectives against the United States.&nbsp;
Earlier, Senator Mark Warner, a Democrat from Virginia, urged Microsoft to consider ceasing Bing&#8217;s operations in China.
Human rights organizations have also voiced their unease, with Human Rights Watch urging Microsoft to disclose its content removal practices and reconsider its presence in China if it implicates them in human rights abuses.&nbsp;
Separately, executives at Microsoft, including CEO Satya Nadella and President Brad Smith, have discussed the future of their artificial intelligence lab in Beijing.&nbsp;
U.S. lawmakers, including Senator Josh Hawley and Representative Mike Gallagher, have warned about the risks associated with technological collaborations with China, particularly the misuse of AI by the Chinese government.
In 2023, Smith and China&#8217;s Commerce Minister Wang Wentao convened to deliberate on artificial intelligence and trade ties between the U.S. and China.&nbsp;
This meeting&nbsp;<a target="_blank" href="https://www.benzinga.com/government/23/12/36130092/microsoft-in-high-level-talks-with-china-a-new-era-for-ai-and-trade-cooperation-on-the-horizon" rel="noreferrer noopener">continues diplomatic efforts</a>&nbsp;following a discussion between U.S. President Joe Biden and Chinese President Xi Jinping, showcasing both countries&#8217; dedication to collaborating in areas such as AI and enhancing the business landscape for international firms.
Microsoft stock has gained over 55% in the last 12 months. Investors can gain exposure to the stock via&nbsp;IShares Global Tech ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>) and&nbsp;Fidelity MSCI Information Technology Index ETF&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FTEC#NYSE">FTEC</a>).
Price Action:&nbsp;MSFT shares are trading higher by 0.84% at $428.80 premarket on the last check Thursday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Shutterstock

Microsoft Faces Heat from US Senators Over Bing's Censorship in China

Microsoft Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NYSE">MSFT</a>) achieved a $3 trillion market valuation on Jan. 24, 2023, fueled by the burgeoning optimism in artificial intelligence (AI), marking a significant <a href="https://www.benzinga.com/markets">milestone in its journey. </a>
On Wednesday, Microsoft&#8217;s shares soared by 1.4% to $404, briefly propelling the company beyond the coveted $3 trillion mark and placing it in close competition with Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) for the title of the world&#8217;s most valuable company.
<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="495" src="https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/24131705/MSFT_2024-01-24_17-16-43_b4053-1024x495.png" alt="" class="wp-image-192972" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/24131705/MSFT_2024-01-24_17-16-43_b4053-1024x495.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/24131705/MSFT_2024-01-24_17-16-43_b4053-300x145.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/24131705/MSFT_2024-01-24_17-16-43_b4053-768x372.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/24131705/MSFT_2024-01-24_17-16-43_b4053-1536x743.png 1536w,https://editorial-assets.benzinga.com/wp-content/uploads/2024/01/24131705/MSFT_2024-01-24_17-16-43_b4053.png 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h3 class="wp-block-heading">Microsoft&#8217;s Stellar Performance: A Closer Look</h3>
<ul>
<li>Market Valuation: Microsoft briefly outpaced Apple, the first company to reach a $3 trillion market cap, before settling back.</li>
<li>Yearly Growth: The company has seen an impressive 67% growth over the past year, matching its 2009 performance.</li>
<li>AI and Growth: Investors are particularly enthused by Microsoft&#8217;s prospects in AI, especially through its partnership with OpenAI Inc. AI-powered services are expected to drive significant growth in earnings and revenue.</li>
<li>Financial Outlook: Analysts forecast a revenue of $243.16 billion in 2024, a 14.7% year-on-year increase. Earnings per share (EPS) are predicted to reach 11.2, marking a 14.3% rise. The forward price-to-earnings ratio stands at 36x, close to its record high of 36.8x in November 2021.</li>
<li>Cash Reserves: Microsoft boasts a substantial cash reserve of $143.94 billion.</li>
</ul>
<h3 class="wp-block-heading">Exchange Traded Funds Exposed To Microsoft</h3>
Microsoft is a core holding in 513 ETFs, with U.S.-based ETFs owning 13% of Microsoft&#8217;s outstanding shares.
Microsoft holds a staggering 22% weight in the Technology Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLK#NYSE">XLK</a>). 
The tech giant has a substantial 21% stake in the Fidelity MSCI Information Technology Index ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FTEC#NYSE">FTEC</a>) and a 20% weight in the iShares Global Tech ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IXN#NYSE">IXN</a>). 
N <a href="https://www.benzinga.com/markets/asia/24/01/36758819/chinese-stocks-rally-as-beijing-goes-all-in-on-financial-support-squeezes-short-sellers">Chinese Stocks Rally As Beijing Goes All-In On Financial Support, Squeezes Short Sellers</a>
Photo: Shutterstock

Microsoft Races To The Top, Hits $3-Trillion Valuation, Challenges Apple's Throne

Microsoft Corp&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/msft#NASDAQ">MSFT</a>) backed&nbsp;OpenAI&#39;s&nbsp;ChatGPT&nbsp;chatbot, which grabbed the attention of the global tech sector in early 2023, adept at answering questions and writing essays and poems, and image generator Dall-E 2, which turns language prompts into novel images.
The AI industry almost&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/news/23/02/30724753/chatgpt-effect-google-intensifies-ai-focus-with-latest-investment" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">triggered a battle</a>&nbsp;among the big tech companies like Microsoft&nbsp;and&nbsp;Alphabet Inc&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/goog#NASDAQ">GOOG</a>) (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/googl#NASDAQ">GOOGL</a>)&nbsp;Google&nbsp;in their bid to outdo each other. It mainly came when companies were busy downsizing their workforce and shelving projects and real estate presence amid macro uncertainties.
The ETFs with significant exposure to the ChatGPT stocks made handsome gains year-to-date.
SPDR Select Sector Fund - Technology&nbsp;(NYSE:&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/stock/xlk#NYSE" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">XLK</a>), iShares Global Tech ETF&nbsp;(NYSE:&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/stock/ixn#NYSE" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">IXN</a>), and&nbsp;Fidelity MSCI Information Technology Index&nbsp;ETF (NYSE:&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/stock/ftec#NYSE" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">FTEC</a>) gained ~20% YTD. The ETFs gained 15%-18% in the last six months and 5% the previous month.
The ETFs have 18%-24% exposure to Microsoft, 22%-23% exposure to&nbsp;Apple Inc&nbsp;(NASDAQ:&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/stock/aapl#NASDAQ" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">AAPL</a>), and 5%-6% exposure to Nvidia. Apple maintained a low profile in terms of its ChatGPT ambitions.
Analysts touted&nbsp;Nvidia Corp&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/nvda#NASDAQ">NVDA</a>) as a critical&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/analyst-ratings/analyst-color/23/02/30962419/nvidia-to-bask-in-glory-of-chatgpt-wave-analyst-says-ahead-of-4q-boosts-price-targe" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">gainer from the ChatGPT wave</a>.
Microsoft&#39;s new AI additions to its&nbsp;Bing&nbsp;search engine bore mixed results in February. Colossal AI search costs&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/news/23/02/31008543/colossal-artificial-intelligence-search-costs-pose-headwinds-for-googles-bard-and-microsofts-chatgpt" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">posed as additional headwinds</a>.&nbsp;
Last week, OpenAI made ChatGPT&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/news/23/03/31487866/openai-makes-chatgpt-capable-of-web-browsing-likely-to-expand-user-access-gradually" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">capable of web browsing</a>.
This week, China&#39;s&nbsp;Baidu Inc&nbsp;(NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/bidu#NASDAQ">BIDU</a>)&nbsp;dumped&nbsp;the highly-<a class="editor-rtfLink" href="https://www.benzinga.com/news/23/03/31505390/chinas-baidu-ditches-public-launch-of-chatgpt-like-bot-whats-going-on" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">anticipated public launch</a>&nbsp;of its ChatGPT-like product,&nbsp;Ernie Bot.&nbsp;
Baidu&#39;s cancellation came weeks after founder Robin Li disappointed by marking Ernie Bot&#39;s debut via recorded video&nbsp;<a class="editor-rtfLink" href="https://www.benzinga.com/news/23/03/31393598/baidus-chatgpt-counterpart-ernie-bot-impresses-analysts" style="color:#4a6ee0; background:transparent; margin-top:0pt; margin-bottom:0pt" target="_blank">instead of a real-time demo</a>.

BIDU

Following ChatGPT Announcement, These Artificial Intelligence Focused ETFs Show Strong Gains

When it comes to the FANG stocks, the &ldquo;A&rdquo; and the &ldquo;N&rdquo; &mdash; Amazon.com Inc. (NASDAQ: <a class="ticker" href="/stock/amzn#NASDAQ">AMZN</a>) and Netflix, Inc. (NASDAQ: <a class="ticker" href="/stock/nflx#NASDAQ">NFLX</a>) &mdash; are classified as consumer discretionary names. Conversely, the &ldquo;F&rdquo; and the &ldquo;G&rdquo; &mdash; Facebook Inc (NASDAQ: <a class="ticker" href="/stock/fb#NASDAQ">FB</a>) and Google parent Alphabet Inc (NASDAQ: <a class="ticker" href="/stock/goog#NASDAQ">GOOG</a>) (NASDAQ: <a class="ticker" href="/stock/googl#NASDAQ">GOOGL</a>) &mdash; reside in the technology sector.
Some investors believe the Global Industry Classification System (GICS) does not reflect Amazon and Netflix arguably being technology companies. As such, index providers Standard &amp; Poor&#39;s and MSCI, two of the largest providers of benchmarks for use by exchange traded funds (ETFs) issuers, are considering changes to the consumer discretionary, technology and telecommunications services sectors.
Those changes could alter the rosters in big-name sector ETFs, such as the Consumer Discretionary Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xly#NYSE">XLY</a>) and the Technology Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlk#NYSE">XLK</a>).
<h3>Sector-Level Happenings</h3>
In a recently completed consultation with investors, S&amp;P and MSCI&#39;s areas of focus included the media and Internet software &amp; services industries. On the cable and telecom side, Verizon Communications Inc. (NYSE: <a class="ticker" href="/stock/vz#NYSE">VZ</a>) resides in XLK while cable giant Comcast Corporation (NASDAQ: <a class="ticker" href="/stock/cmcsa#NASDAQ">CMCSA</a>) is a constituent in XLY, although the two companies are competitors.
&ldquo;MSCI and S&amp;P, the two firms that manage GICS, proposed creating a new communication services sector within GICS and completed an investment community consultation at the end of September to review how to classify all companies in the telecommunications services sector as well as portions of the consumer discretionary and information technology sector,&rdquo; said <a href="https://newpublic.cfraresearch.com/">CFRA Research</a> Director of ETF &amp; Mutual Fund Research Todd Rosenbluth in a note out Monday.
Alphabet and Facebook are major holdings in XLK while Amazon is by far the largest member of XLY&#39;s roster.
<h3>Wide-Ranging Impact</h3>
If the index providers decide to do some GICS shuffling, XLK and XLY will not be the ETFs to be affected. Rival sector ETFs from Fidelity, iShares and Vanguard would see roster changes as could an array of smart beta sector funds.
&ldquo;Any GICS shifts will create change for ETFs. Most of the assets in sector ETFs are tied to S&amp;P- or MSCI-based indices,&rdquo; said Rosenbluth. &ldquo;The effect of any change to GICS will be felt not only in the U.S., but also globally. iShares offers a suite of global sector ETFs tracking S&amp;P 1200 indices.&rdquo;
For example, the $1.5 billion iShares Global Tech ETF (NYSE: <a class="ticker" href="/stock/ixn#NYSE">IXN</a>) devotes about 15 percent of its combined weight to Facebook and Alphabet, but that ETF does not holds shares of Amazon or Netflix.
CFRA has a Marketweight rating on IXN and an Overweight rating on XLK.
Related Links:
<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/10/10208785/its-cheap-to-get-involved-with-mid-caps">A Cheap Mid-Cap ETF</a>
<a href="https://www.benzinga.com/trading-ideas/long-ideas/17/10/10208784/a-new-spin-on-one-of-this-years-hottest-themes#/null">This New ETF Could Be a Star</a>

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