Stock Pick

  • John Deere dealership says a solar storm left GPS tracking on farmers’ tractors ‘extremely compromised’

    John Deere tractors
    Farmers increasingly use automated tractors to maximize productivity.

    picture alliance/Getty

    • A severe geomagnetic storm hit the northern US.
    • The storm caused auroras — and apparently disrupted precision farming systems, a John Deere dealership said.
    • Satellite signals were "extremely impacted" by the storm, the dealership said.

    One of the strongest solar storms in decades hit Earth this past weekend, sending stunning auroras far from the poles.

    But for some farmers, the geomagnetic storm was more of a headache.

    Geomagnetic storms are capable of disrupting electronics on satellites and causing communication blackouts. These storms can also impact power grids, causing voltage control problems that can trigger outages.

    In this weekend's solar storm, charged particles disrupted GPS and precision farming systems, according to a John Deere dealership and a report in 404 Media.

    Landmark Implement, a John Deere dealer in Kansas and Nebraska, wrote in an update that some GPS system networks were being affected by the storm. This caused connection and accuracy issues with its real-time kinematic systems, which use GPS and ground-based data to help farmers plant crops and spray fertilizer with pinpoint accuracy.

    Landmark Implement posted updates throughout the weekend, with the most recent one on Sunday warning farmers that some systems were "extremely compromised." The updates also said pass-to-pass accuracy is "extremely degraded."

    While the dealership said the situation was "definitely not ideal," it also said it isn't expected to create any large overlaps or skips. 

    "We do believe this historic event and it isn't something that we are going to have to continue to battle frequently," one update said, adding, "The storm has affected all brands of GPS, not solely John Deere."

    The breakdown caused many farmers to halt planting operations, according to the report from 404 Media.

    John Deere has been a leading name in precision farming as it pioneered self-driving tractors.

    High-tech farming equipment has become a growing part of modern agriculture. Farmers have begun using automated tractors to plant crops so that the spacing is perfect, maximizing the yield of their crops.

    404 Media reported that errors with planting or harvesting due to the solar storm could cause automatic equipment to damage crops in the future.

    John Deere and Landmark Implement did not respond to a request for comment from Business Insider.

    Read the original article on Business Insider

  • Why this ASX 200 stock could generate a 40% 12-month return

    A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today

    If you are on the lookout for big returns to supercharge your investment portfolio, then read on.

    That’s because analysts at Goldman Sachs have just tipped an ASX 200 stock to generate a 12-month total return of over 40%.

    To put that into context, a $10,000 investment in this company’s shares would turn into approximately $14,000 in a year if the broker is on the money with its recommendation.

    Which ASX 200 stock could deliver big returns?

    The ASX 200 stock in question is media and entertainment company Nine Entertainment Co Holdings Ltd (ASX: NEC)

    According to a note that was released this morning, the broker has responded to the company’s strategy day presentation by retaining its buy rating and $2.10 price target.

    Based on the Nine Entertainment share price of $1.53, this implies potential upside of 37% for investors over the next 12 months.

    In addition, Goldman Sachs is forecasting fully franked dividend yields of 5.2% in FY 2024 and then 5.9% in FY 2025. This boosts the total annual potential return to over 42%.

    What did the broker say?

    Goldman was cautiously optimistic about the strategy day update, noting that it demonstrated how the company stands to benefit from its technology, data and artificial intelligence (AI) offerings. The broker said:

    Broadly we were encouraged by the detailed update and remain positive on Nine’s strategy. However although currently being masked by challenging ad markets, we would want to see the c.$100mn p.a. investment being made in product/tech translate into both above market growth (from higher yields), alongside improving efficiency across the business as ad markets ultimately recover. Nine was upbeat on this, reiterating its view that it can grow its Total TV Audience, grow average CPMs given 9Now adoption, and improve efficiency through AI.

    It then adds:

    Supporting this view, a range of examples was provided, including: (1) 9 Ad Manager driving 2X CPMs, with 12% of users currently adopting the Gen AI tool; (2) Nine’s Second Gen data across its 22mn signed in users and 68 Tribes provides powerful targeting in a cookie-less world; (3) Automated captions to save and estimate $3-5mn in cost p.a.; (4) 9 ExPress, which converts scripted TV news content into news articles is improving output c.100%; (5) Gen AI improving journalist productivity 4X at Domain (potential revenue/opex benefits).

    Overall, the broker continues to believe this ASX 200 stock is well positioned to deliver consistent earnings and dividend growth over the coming years. As a result, it thinks it would be a good option for investors at current levels.

    The post Why this ASX 200 stock could generate a 40% 12-month return appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Nine Entertainment Co. Holdings Limited right now?

    Before you buy Nine Entertainment Co. Holdings Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Nine Entertainment Co. Holdings Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Nine Entertainment. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • 5 things to watch on the ASX 200 on Tuesday

    Broker looking at the share price.

    On Monday, the S&P/ASX 200 Index (ASX: XJO) fought hard and managed to record the smallest of gains. The benchmark index rose a single point to 7,750 points.

    Will the market be able to build on this on Tuesday? Here are five things to watch:

    ASX 200 expected to edge lower

    The Australian share market is expected to edge lower on Tuesday following a mixed start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 8 points or 0.1% lower. In the United States, the Dow Jones was down 0.2% and the S&P 500 was down a fraction, but the NASDAQ rose 0.3%.

    BHP makes new takeover offer

    The BHP Group Ltd (ASX: BHP) share price will be on watch today after the mining giant made another offer to acquire Anglo American plc (LSE: AAL). BHP has increased its offer to 0.8132 BHP shares and ordinary shares in each of Anglo American Platinum and of Kumba Iron Ore. This compares to its previous offer of 0.7097 BHP shares per share. However, it hasn’t been enough for the Anglo American board, which has rejected the offer.

    Oil prices charge higher

    It could be a good session for ASX 200 energy shares Santos Ltd (ASX: STO) and Karoon Energy Ltd (ASX: KAR) after oil prices charged higher overnight. According to Bloomberg, the WTI crude oil price is up 1.1% to US$79.14 a barrel and the Brent crude oil price is up 0.75% to US$83.42 a barrel. Oil demand optimism boosted prices overnight.

    Fletcher Building rated neutral

    Fletcher Building Ltd (ASX: FBU) shares are about fair value according to Goldman Sachs. This is despite the building products company’s shares crashing to a multi-year low on Monday following the release of a disappointing market update. In response to the update, Goldman has retained its neutral rating with a $3.05 price target (from $3.70). It said: “We believe the valuation appears undemanding on a through-the-cycle basis. However, we expect leverage to weigh on valuation. Specifically, we estimate that ND:EBITDA will peak at 2.2x in Dec24, which is above management’s target range of 1-2x.”

    Gold price tumbles

    ASX 200 gold shares including Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a tough session on Tuesday after the gold price tumbled overnight. According to CNBC, the spot gold price is down 1.4% to US$2,342.2 an ounce. Traders appear to have doubts over the outlook for rate cuts in the United States.

    The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • 4 founder-led ASX 300 shares that have helped this fund outperform

    Modern accountant woman in a light business suit in modern green office with documents and laptop.

    Beating the market by buying our own portfolio of ASX 300 shares is always a difficult task.

    Most ASX share market index funds have historically delivered some compelling returns over long periods of time. Overcoming the efficiency of an index fund and generating even higher returns is the north star of most ASX investors. But it’s a task that’s far easier said than done.

    So when a fundie manages to do so, it’s always worth taking a look to see how they pulled it off.

    That’s exactly what Airlie Funds Management can boast of today. Airlie’s Australian Share Fund has returned an average of 10.65% per annum (as of 30 April) since its founding in 2018, handily outperforming an ASX index fund by more than 2% per annum.

    Airlie has also managed to hit an average return of 11.85% over the five years to 30 April 2024, beating its benchmark by 3.85% per annum.

    So Airlie clearly knows what it’s doing when it comes to beating the market.

    Luckily, today we get a chance to go through the ASX 300 shares that this successful fundie is eying off for its next investments.

    The ASX 300 shares that Airlie is buying

    As reported in the Australian Financial Review (AFR), Airlie portfolio manager Emma Fisher named Mineral Resources Ltd (ASX: MIN), Reece Ltd (ASX: REH), Resmed Inc (ASX: RMD) and Premier Investments Limited (ASX: PMV) as some of Airlie’s most recent successes, helping to drive the fund’s 12.7% return over the 12 months to 30 April.

    These ASX 300 shares are all founder-lead – an attribute that Fisher names as a critical component of Airlie’s success with them. She told the AFR that the meetings with these companies management “stood out”:

    I have always found a lot of value from being in a room with management. Maybe not in every meeting, maybe a lot of them are a wash, but when you meet the real deal, it really stands out for you.

    In terms of the fund’s next winners, Fisher states that blue chips like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and CSL Ltd (ASX: CSL) are long-term staples of Airlie’s portfolio.

    But she’s most excited about her next ASX 300 shares, which are “big bets” and include IDP Education Ltd (ASX: IEL).

    IDP is currently going through some regulatory issues, which has resulted in the company’s share price losing significant value in recent months. But Fisher is taking advantage of this as a buying opportunity:

    They’ve got the balance sheet, they’re the leading player, it’s not a capital-intensive industry, and they don’t need much cash to grow, so they’re going to survive a downturn.

    Fisher has also been showing serious interest in the big supermarkets Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL):

    They’ve fallen so much… If you bought the banks off the back of the royal commission, if you bought Qantas when it was having its own inquiry grilling last year, you’ve done pretty well. So now it’s the supermarkets’ time in the headlights.

    So those are the ASX 300 shares that Airlie is eyeing off as its next potential winners. Let’s see how they do over the next 12 months and beyond.

    The post 4 founder-led ASX 300 shares that have helped this fund outperform appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor Sebastian Bowen has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Idp Education, and ResMed. The Motley Fool Australia has positions in and has recommended Coles Group and ResMed. The Motley Fool Australia has recommended CSL, Idp Education, and Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • Russia’s increasingly turning to fast ATVs and motorbikes to find Ukrainian targets, but they’re very vulnerable

    A Ukrainian serviceman drives a quad bike on a road that leads to the town of Chasiv Yar, in the Donetsk region, on March 30, 2024.
    A Ukrainian serviceman drives a quad bike on a road that leads to the town of Chasiv Yar, in the Donetsk region, on March 30, 2024.

    Photo by ROMAN PILIPEY/AFP via Getty Images

    • Russia is relying more on small, fast vehicles — like ATVs and motorbikes — to conduct operations.
    • Moscow has been using these systems to move troops and stage attacks, Western intelligence says.
    • But these light vehicles are more vulnerable than armored vehicles to Ukrainian attacks.

    Russian forces are increasingly relying on light and fast vehicles like ATVs and motorbikes to move troops to the front lines, conduct reconnaissance of Ukrainian positions, and execute assaults.

    By favoring these lighter vehicles, Russia is sacrificing the protection that its troops would enjoy in a more heavily armored ride, leaving them far more vulnerable to Ukrainian attacks, new Western intelligence suggests.

    Over the past few months, Russia has "highly likely" increased its employment of light vehicles as a way to move troops to the front lines and stage nighttime attacks on Ukrainian positions, Britain's defense ministry wrote in a Monday intelligence update.

    Ukraine's forces were operating quad bikes as early as April 2022, just weeks after Russia launched its full-scale invasion, to ambush Russian forces. Nearly two years later, in February of this year, Ukrainian soldiers said Russian quad bikes were more maneuverable than tracked vehicles and harder to hit with artillery.

    Ukrainian servicemen drive a quad bike on a road that leads to the town of Chasiv Yar, in the Donetsk region, on March 30, 2024.
    Ukrainian servicemen drive a quad bike on a road that leads to the town of Chasiv Yar, in the Donetsk region, on March 30, 2024.

    Photo by ROMAN PILIPEY/AFP via Getty Images

    "It is likely that Russian forces have increasingly resorted to the use of lighter, faster vehicles to conduct reconnaissance of Ukrainian defensive positions, to allow for subsequent engagement using artillery, first-person view (FPV) or one-way attack OWA drones in an effort to consistently degrade Ukrainian forces," Britain's defense ministry said.

    "However, in sacrificing armor and firepower for increased mobility, light vehicles are far more vulnerable than their armored counterparts to an array of weapon systems," the ministry added, noting that "Ukrainian FPV drones have already demonstrated their ability to effectively target such light vehicles."

    Russia has reportedly purchased thousands of Chinese Desertcross 1000-3 ATVs, per the intelligence update. Rob Lee, a senior fellow at the Foreign Policy Research Institute, said last month that one of these vehicles in service with Russia's 177th Naval Infantry Regiment had been outfitted with a counter-drone screen.

    https://platform.twitter.com/widgets.js

    This improvised anti-drone armor — cage-like netting that's sometimes referred to as a "cope cage" — has been featured prominently on Russian and Ukrainian armored vehicles, including tanks. It is essentially a last-ditch added layer of protection to defend against threats like drones, artillery, and some missiles.

    While Russia's lighter vehicles are more vulnerable to Ukrainian attacks than its heavy armor, Moscow has still lost scores of tanks and armored vehicles on the battlefield, including to Kyiv's exploding FPV drones. These systems are by no means invincible, even if they are equipped with added layers of protection.

    The shift in transportation also appears to have changed the pace of Russian assaults, one Ukrainian commander said.

    A Ukrainian soldier gets off a quad bike in a forest in the direction of Kreminna, in the Donetsk Oblast, on Feb. 15, 2024.
    A Ukrainian soldier gets off a quad bike in a forest in the direction of Kreminna, in the Donetsk Oblast, on Feb. 15, 2024.

    Photo by Diego Herrera Carcedo/Anadolu via Getty Images

    Several weeks ago, Russian infantry soldiers were launching attacks every few hours alongside a collection of armored vehicles, Col. Pavlo Fedosenko, the commander of Ukraine's 92nd assault brigade, told the Economist in a recent interview.

    But now, Moscow's troops use quad bikes and motorcycles to attack in small groups every few days as they look for weak spots in Kyiv's defensive lines.

    Russia hasn't completely turned its back on its armored vehicles, though. Last week, for instance, Moscow launched a new assault in Ukraine's northeastern Kharkiv region and tried using armored vehicles to break through defensive lines. Kyiv said its forces repelled the initial attack, but intense fighting continued through the weekend.

    "Defensive battles are ongoing, fierce battles — on a large part of our border area," Ukrainian President Volodymyr Zelenskyy said Sunday, addressing the situation in Kharkiv. He added that "there are villages that have actually turned from a gray zone into a combat zone — and the occupier is trying to gain a foothold in some of them, or simply use some of them for further advancement."

    Read the original article on Business Insider

  • Tesla executive who led Cybertruck manufacturing leaves carmaker

    Tesla Cybertruck with Elon Musk
    Another executive is leaving Tesla.

    Frederic J. Brown/Getty

    • Renjie Zhu, director of manufacturing engineering at Tesla's Austin Gigafactory, said he left the company.
    • The executive came to the US to help launch Tesla's Cybertruck.
    • Zhu's departure follows a series of layoffs and executive exits at Tesla.

    The director who helped launch Tesla's latest project is leaving the company.

    Renjie Zhu, the director of manufacturing engineering at Tesla's Austin Gigafactory, announced he'd left the company on Sunday.

    The executive wrote on LinkedIn that "after triumphing the epic launch of Cybertruck program," his "adventure with this great company has come to an end."

    It's unclear whether Zhu was part of a recent series of layoffs at Tesla or resigned on his own. At least seven executives at Tesla have departed over the past month. Last week, Tesla's former head of product launches said he'd chosen to leave because the recent layoffs had damaged morale and thrown the company "out of balance."

    In his announcement, Zhu struck a more cheery note.

    "Every single day in the past 5 years we brought the world a little closer to the transition to sustainable energy, not just with our incredible products Model 3/Model Y/Cybertruck, but the innovative ways in which we built those high volume production lines with an unprecedentedly high efficiency and delivered the products to our customers with impeccable quality," he wrote, adding that he's ready to "start a new journey."

    Zhu worked at Tesla for more than five years and came over from the company's Shanghai site in January 2023 to launch the Cybertruck program, according to his LinkedIn profile. Tesla began deliveries for the electric pickup truck in November after several years of delays.

    The executive and a spokesperson for Tesla did not immediately respond to a request for comment.

    Tesla CEO Elon Musk kickstarted a series of layoffs on April 15 when he told staff he planned to cut more than 10% of the company's workforce. Tesla workers are currently facing their fifth straight week of layoff notices.

    Do you work for Tesla or have a tip? Reach out to the reporter via a non-work email and device at gkay@businessinsider.com or 248-894-6012

    Read the original article on Business Insider

  • A US Navy supply ship was run aground by a distracted junior officer after the ship’s captain left to eat dinner, investigation reveals

    Coastal Riverine Squadron patrol boats conducts flank USNS Alan Shepard
    Coastal Riverine Squadron patrol boats conducts flank USNS Alan Shepard in the Gulf of Tadjoura.

    US Navy photo by Hospital Corpsman 1st Class Kenji Shiroma/Released

    • USNS Alan Shepard was run aground off Bahrain's coast after the ship's captain left to eat dinner.
    • A junior officer tried to turn the Shepard to avoid a fishing vessel, but it got stuck on a shoal.
    • The Navy supply ship was freed from the sand the next day and only sustained minor scratches.

    A Navy supply ship was run aground by a junior officer off the coast of Bahrain shortly after the ship's master — or captain — left the bridge to eat dinner, an investigation revealed.

    The USNS Alan Shepard had finished up a maintenance period on July 15 and was on the way to a port in Bahrain when she was directed to an area just off shore to wait on a pilot. The master took the ship there and then went to eat dinner, leaving the ship in the hands of a much more junior third officer.

    Less than 30 minutes later, the Alan Shepard was grounded on a shoal.

    An MH-60S Sea Hawk approaches the Lewis and Clark-class dry cargo and ammunition ship USNS Alan Shepard.
    An MH-60S Sea Hawk approaches the Lewis and Clark-class dry cargo and ammunition ship USNS Alan Shepard.

    US Navy photo by Mass Communication Specialist 3rd Class James Hong

    The investigative summary that was provided to Military.com found that after the ship's master — as well as the navigator and the chief mate — left to eat, the ship's third officer "became distracted by a fishing vessel" and tried turning the Alan Shepard to avoid it.

    However, the officer, who was not identified in the summary, "was not cognizant of the ship's position in relation to the shoals and shallow water while he was maneuvering the vessel."

    It wouldn't be until the next day when, helped by rising tide and tugs, the ship would be freed from the sand.

    The investigation noted that the Alan Shepard's standing orders dictate "the master will be on the bridge" when the ship is in shallow water. It cited the failure of the ship's top officers to follow their own rules as one of the factors that led to the incident.

    Sailors aboard guided-missile destroyer USS Spruance hold the phone and distance line
    Sailors aboard guided-missile destroyer USS Spruance hold the phone and distance line during a replenishment-at-sea with dry cargo ship USNS Alan Shepard.

    US Navy photo by Mass Communication Specialist 3rd Class Taylor Crenshaw

    The Alan Shepard was launched in 2006 and has space for a crew of more than 120, all of whom are typically civilian mariners licensed by the US Coast Guard. The ship is used to transport cargo and supplies for Navy vessels at sea.

    The investigative summary provided by the Navy made no mention of any disciplinary measures taken in the wake of the incident, and Stars and Stripes, which was the first to report on the investigation's results, found that the master in charge of the ship that day still holds a valid merchant mariner credential.

    The summary said that a later diver inspection and evaluation found that the ship suffered only minor scratches to the paint on its hull and no other damage.

    Waves crash against the side of the Lewis and Clark-class dry cargo ship USNS Alan Shepard
    Waves crash against the side of the Lewis and Clark-class dry cargo ship USNS Alan Shepard as it prepares to send supplies to the Arleigh Burke-class guided missile destroyer USS Halsey.

    US Navy photo by Mass Communication Specialist 3rd Class Andrew Langholf

    In contrast, the Navy typically relieves warship commanders of their command for even minor grounding incidents.

    Just weeks after the Alan Shepard incident, the Navy fired the skipper of the USS Howard, Cmdr. Kenji Igawa, after the ship suffered a "soft grounding" on August 10 as it was pulling into Bali, Indonesia, for a port visit. The ship was able to free itself.

    The Alan Shepard is currently operating in the Middle East, according to public ship trackers, and has been supporting the USS Dwight D. Eisenhower and the rest of that strike group.

    Read the original article on Business Insider

  • The full list of major US companies slashing staff this year, from Tesla to Google and Apple

    Elon Musk
    Tesla has had ongoing layoffs throughout 2024.

    Grzegorz Wajda/SOPA/Getty Images

    • Last year's job cuts weren't the end of layoffs. Further reductions have begun in 2024.
    • Companies like Tesla, Google, Microsoft, Nike, and Amazon have announced plans for cuts this year.
    • See the full list of corporations reducing their worker numbers in 2024.

    A slew of companies across the tech, media, finance, and retail industries made significant cuts to staff in 2023. Tech titans like IBM, Google, Microsoft, finance giants like Goldman Sachs, and manufacturers like Dow all announced layoffs.

    This year is looking grim too. And it's only May.

    Nearly 40% of business leaders surveyed by ResumeBuilder think layoffs are likely at their companies this year, and about half say their companies will implement a hiring freeze. ResumeBuilder talked to about 900 leaders at organizations with more than 10 employees. Half of those surveyed cited concerns about a recession as a reason.

    Another major factor is artificial intelligence. Around four in 10 respondents said they'll conduct layoffs as they replace workers with AI. Dropbox, Google, and IBM have already announced job cuts related to AI.

    Here are the dozens of companies with job cuts planned or already underway in 2024.

    Nike's up-to-$2 billion cost-cutting plan will involve severances.
    Nike Customers walk past a Nike store in Shanghai, China
    Athletic retailer Nike will be making reductions to staffing as part of a cost-cutting initiative.

    CFOTO/Future Publishing via Getty Images

    Nike announced its cost-cutting plans in a December 2023 earnings call, discussing a slow growth in sales. The call subsequently resulted in Nike's stock plunging.

    "We are seeing indications of more cautious consumer behavior around the world," Nike Chief Financial Officer Matt Friend said in December.

    Google laid off hundreds more workers in 2024.
    Google CEO Sundar Pichai
    Google confirmed the layoffs to Business Insider in an email.

    Justin Sullivan/Getty Images

    On January 10, Google laid off hundreds of workers in its central engineering division and members of its hardware teams — including those working on its voice-activated assistant.

    In an email to some affected employees, the company encouraged them to consider applying for open positions at Google if they want to remain employed. According to the email, April 9 will be the last day for those unable to secure a new position.

    The tech giant laid off thousands throughout 2023, beginning with a 6% reduction of its global workforce (about 12,000 people) last January.

    Discord is laying off 170 employees.
    Discord logo displayed on a phone screen and Discord website displayed on a screen in the background are seen in this illustration photo taken in Krakow, Poland on November 5, 2022.
    Jason Citron said rapid growth was to blame for the cuts.

    Jakub Porzycki/NurPhoto/Getty Images

    Discord employees learned about the layoffs in an all-hands meeting and a memo sent by CEO Jason Citron in early January.

    "We grew quickly and expanded our workforce even faster, increasing by 5x since 2020," Citron said in the memo. "As a result, we took on more projects and became less efficient in how we operated."

    In August 2023, Discord reduced its headcount by 4%. According to CNBC, the company was valued at $15 billion in 2021.

    Citi will cut 20,000 from its staff as part of its corporate overhaul.
    jane fraser milken institute panel
    CEO Jane Fraser has been vocal about the necessity for restructuring at Citigroup.

    Patrick T. Fallon/Getty Images

    The layoffs announced in January are part of a larger Citigroup initiative to restructure the business and could leave the company with a remaining head count of 180,000 — excluding its Mexico operations.

    In an earnings call that month, the bank said that layoffs could save the company up to $2.5 billion after it suffered a "very disappointing" final quarter last year.

    Amazon-owned Twitch also announced job cuts.
    Twitch is walking back its policy allowing for "artistic nudity" after just two days.
    Twitch is cutting more than 500 positions.

    NurPhoto/Getty Images

    Twitch announced on January 10 that it would cut 500 jobs, affecting over a third of the employees at the live-streaming company.

    CEO Dan Clancy announced the layoffs in a memo, telling staff that while the company has tried to cut costs, the operation is "meaningfully" bigger than necessary.

    "As you all know, we have worked hard over the last year to run our business as sustainably as possible," Clancy wrote. "Unfortunately, we still have work to do to rightsize our company and I regret having to share that we are taking the painful step to reduce our headcount by just over 500 people across Twitch."

    BlackRock is planning to cut 3% of its staff.
    BlackRock logo
    BlackRock expects to lay off 3% of its workforce.

    Leonardo Munoz/VIEWpress

    Larry Fink, BlackRock's chief executive, and Rob Kapito, the firm's president, announced in January that the layoffs would affect around 600 people from its workforce of about 20,000.

    However, the company has plans to expand in other areas to support growth in its overseas markets.

    "As we prepare for 2024 and this very exciting but distinctly different landscape, businesses across the firm have developed plans to reallocate resources," the company leaders said in a memo.

    Rent the Runway is slashing 10% of its corporate jobs as part of a restructuring.
    Woman walks out the door of Rent the Runway store
    Rent the Runway is laying off a few dozen people in its corporate workforce.

    Shannon Stapleton/Reuters

    In the fashion company's January announcement, COO and president Anushka Salinas said she will also be leaving the firm, Fast Company reported.

    Unity Software is eliminating 25% of its workforce.
    Sutro combines the best of Unity, Figma, Retool, and GPT-3
    Unity Software plans to cut roughly 1,800 jobs.

    Sutro Software

    Around 1,800 jobs at the video game software company will be affected by the layoffs announced, Reuters reported in January.

    eBay is cutting 1,000 jobs.
    eBay logo sign outside its office
    eBay wants to become "more nimble."

    ullstein bild Dtl/ Getty

    In a January 23 memo, CEO Jamie Iannone told employees that the eBay layoffs will affect about 9% of the company's workforce.

    Iannone told employees that layoffs were necessary as the company's "overall headcount and expenses have outpaced the growth of our business."

    The company also plans to scale back on contractors.

    Microsoft is reducing its headcount by 1,900 at Activision, Xbox, and ZeniMax.
    Microsoft logo and Activision Blizzard logo
    Microsoft is being challenged by the FTC on its planned purchase of Activision Blizzard

    SOPA/Getty Images

    In late January, nearly three months after Microsoft acquired video game firm Activision Blizzard, the company announced layoffs in its gaming divisions. The layoffs mostly affect employees at Activision Blizzard.

    "As we move forward in 2024, the leadership of Microsoft Gaming and Activision Blizzard is committed to aligning on a strategy and an execution plan with a sustainable cost structure that will support the whole of our growing business," Microsoft Gaming CEO Phil Spencer said in a memo obtained by The Verge.

    The cuts come a year after the tech giant announced it was reducing its workforce by 10,000 employees. It then slashed a further 1,000 roles across sales and customer service teams in July 2023.

    Salesforce is cutting 700 employees across the company, The Wall Street Journal reported.
    Salesforce Tower in New York.
    Salesforce laid off about a tenth of its headcount last year.

    Plexi Images/Glasshouse Images/UCG/Universal Images Group via Getty Images

    Salesforce announced a round of layoffs that the company says will affect 1% of its global workforce, The Journal reported in late January.

    The cuts followed a wave of cuts at the cloud giant last year. In 2023, Marc Benioff's company laid off about 10% of its total workforce — or roughly 7,000 jobs. The CEO said the company over-hired during the pandemic.

    Flexport lays off 15% of its workers.
    Flexport CEO Ryan Petersen began rescinding job offers on Friday.
    Flexport CEO Ryan Petersen returned to the company in September.

    Sam Barnes/Sportsfile for Collision via Getty Images

    In late January, the US logistics startup laid off 15% of its staff which is around 400 workers.

    The move came after Flexport founder and CEO Ryan Petersen initiated a 20% reduction of its workforce of an estimated 2,600 employees in October.

    Flexport kicked off 2024 with the announcement that it raised $260 million from Shopify and made "massive progress toward returning Flexport to profitability."

    iRobot is laying off around 350 employees and founder Colin Angle will step down as chairman and CEO.
    iRobot co-founder Colin Angle
    iRobot's executive vice president and chief legal officer Glen Weinstein has been appointed interim CEO upon Angle's exit from the company.

    Kimberly White/Getty Images

    The company behind the Roomba Vacuum announced layoffs in late January around the same time Amazon decided not to go through with its proposed acquisition of the company, the Associated Press reported.

    UPS will cut 12,000 jobs in 2024.
    UPS Driver in truck
    UPS CEO Carol Tomé told investors that the company will reduce its headcount by 12,000 by the end of 2024.

    Justin Sullivan/Getty Images

    The UPS layoffs will affect 14% of the company's 85,000 managers and could save the company $1 billion in 2024, UPS CEO Carol Tomé said during a January earnings call.

    Paypal CEO Alex Chriss announced the company would lay off 9% of its workforce.
    PayPal
    PayPal announced layoffs at the end of January.

    (Photo by Justin Sullivan/Getty Images)

    Announced in late January, this round of layoffs will affect about 2,500 employees at the payment processing company.

    "We are doing this to right-size our business, allowing us to move with the speed needed to deliver for our customers and drive profitable growth," CEO Alex Chriss wrote in a January memo. "At the same time, we will continue to invest in areas of the business we believe will create and accelerate growth."

    Okta is cutting roughly 7% of its workforce.
    Okta logo displayed on a phone with bright lights in the background
    Okta announced a restructuring plan at the start of February.

    SOPA Images/ Getty

    The digital-access-management company announced its plans for a "restructuring plan intended to improve operating efficiencies and strengthen the Company's commitment to profitable growth" in an SEC filing in February.

    The cuts will impact roughly 400 employees.

    Okta CEO Todd McKinnon told staff in a memo that "costs are still too high," CNBC reported.

    Snap has announced more layoffs.
    Snapchat logo and dollar signs in front of a purple background
    Snap has announced another round of job cuts.

    Snapchat, Tyler Le/Insider

    The company behind Snapchat announced in February that it's reducing its global workforce by 10%, according to an SEC filing.

    Estée Lauder said it will eliminate up to 3,100 positions.
    Estee Lauder display
    Between 1,600 and 3,100 jobs will be eliminated from the company.

    Reuters

    The cosmetics company announced in February that it would be cutting 3% to 5% of its roles as part of a restructuring plan.

    Estee Lauder reportedly employed about 62,000 employees around the world as of June 30, 2023.

    DocuSign is eliminating roughly 6% of its workforce as part of a restructuring plan.
    docusign
    The electronic signature company is cutting 6% of its workforce.

    Igor Golovniov/SOPA Images/LightRocket/Getty Images

    The electronic signature company said in an SEC filing in February that most of the cuts will be in its sales and marketing divisions.

    Zoom is slashing 150 jobs.
    Zoom CEO Eric Yuan
    Videoconferencing company Zoom laid off 1,300 people last February.

    Kena Betancur

    The latest reduction announced in February amounts to about 2% of its workforce.

    Paramount Global is laying off 800 employees days after record-breaking Super Bowl.
    Paramount Global CEO Bob Bakish
    CEO Bob Bakish sent a note informing employees of layoffs on Tuesday.

    Eduardo Munoz Alvarez/AP

    In February, Paramount Global CEO Bob Bakish sent a memo to employees announcing that 800 jobs — about 3% of its workforce — were being cut.

    Deadline obtained the memo less than a month after reporting plans for layoffs at Paramount. The announcement comes on the heels of Super Bowl LVIII reaching record-high viewership across CBS, Paramount+, and Nickelodeon, and Univision.

    Morgan Stanley is trimming its wealth management division by hundreds of staffers.
    morgan stanley phone logo chart
    The layoffs mark one of the first major moves by newly-installed CEO Ted Pick.

    Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

    Morgan Stanley is laying off several hundred employees in its wealth-management division, the Wall Street Journal reported in February, representing roughly 1% of the team.

    The wealth-management division has seen some slowdown in recent months, with net new assets down by about 8% from a year ago. The layoffs mark the first major move by newly-installed CEO Ted Pick, who took the reins from James Gorman on January 1.

    Cisco slashes more than 4,000 jobs amid corporate tech sales slowdown.
    cisco
    The cuts comprised 5% of the networking company's workforce.

    REUTERS/Mike Blake

    In February, networking company Cisco announced it was slashing 5% of its workforce, or upwards of 4,000 jobs, Bloomberg reported.

    The company said it was restructuring after an industry-wide pullback in corporate tech spending — which execs said they expect to continue through the first half of the year.

    Expedia Group is cutting more than 8% of its workforce.
    expedia group ceo peter kern stands in front of a large screen that says unprecedented reach with a man throwing a child in the air
    Peter Kern, CEO of Expedia Group

    Business Wire

    Cutbacks part of an operational review at online travel giant Expedia Group are expected to impact 1,500 roles this year, a company spokesperson told BI.

    The company's product and technology division is set to be the worst hit, a report from GeekWire said, citing an internal memo CEO Peter Kern sent to employees in late February.

    "While this review will result in the elimination of some roles, it also allows the company to invest in core strategic areas for growth," the spokesperson said.

    "Consultation with local employee representatives, where applicable, will occur before making any final decisions," they added.

    Sony is laying off 900 workers
    A corner of a PlayStation 5
    The tech company is slashing 900 workers from its workforce.

    NurPhoto/Getty Images

    The cuts at Sony Interactive Entertainment swept through its game-making teams at PlayStation Studios.

    Insomniac Games, which developed the hit Spider-Man video game series, as well as Naughty Dog, the developers behind Sony's flagship 'The Last of Us' video games' were hit by the cuts, the company announced on February 27.

    All of PlayStation's London studio will be shuttered, according to the proposal.

    "Delivering and sustaining social, online experiences – allowing PlayStation gamers to explore our worlds in different ways – as well as launching games on additional devices such as PC and Mobile, requires a different approach and different resources," PlayStation Studios boss Hermen Hulst wrote.

    Hulst added that some games in development will be shut down, though he didn't say which ones.

    In early February, Sony said it missed its target for selling PlayStation 5 consoles. The earnings report sent shares tumbling and the company's stock lost about $10 billion in value.

    Bumble is slashing 30% of its workforce
    new bumble CEO Lidiane Jones
    Lidiane Jones, CEO of Bumble.

    Eugene Gologursky/Stringer/Gr

    On February 27, the dating app company announced that it would be reducing its staff due to "future strategic priorities" for its business, per a statement.

    The cuts will impact about 30% of its about 1,200 person workforce or about 350 roles, a representative for Bumble told BI by email.

    "We are taking significant and decisive actions that ensure our customers remain at the center of everything we do as we relaunch Bumble App, transform our organization and accelerate our product roadmap," Bumble Inc CEO Lidiane Jones said in a statement.

    Electronic Arts is reducing its workforce by 5%
    Electronic Arts logo displayed on a phone screen
    Electronic Arts is cutting hundreds of jobs.

    Getty Images

    Electronic Arts is laying off about 670 workers, equating to 5% of its workforce, Bloomberg reported in late February.

    The gaming firm axed two mobile games earlier in February, which it described as a difficult decision in a statement issued to GamesIndustry.biz.

    CEO Andrew Wilson reportedly told employees in a memo that it would be "moving away from development of future licensed IP that we do not believe will be successful in our changing industry."

    Wilson also said in the memo that the cuts came as a result of shifting customer needs and a refocusing of the company, Bloomberg reported.

    IBM cutting staff in marketing and communications
    Arvind Krishna, Chairman and Chief Executive Officer of IBM addresses the gathering on the first day of the three-day B20 Summit in New Delhi on August 25, 2023
    IBM CEO Arvind Krishna said last year that he could easily see 30% of the company's staff getting replaced by AI and automation over the coming five years.

    Sajjad Hussain/Getty Images

    IBM's chief communications officer Jonathan Adashek told employees on March 12 that it would be cutting staff, CNBC reported, citing a source familiar with the matter.

    An IBM spokesperson told Business Insider in a statement that the cuts follow a broader workforce action the company announced during its earnings call in January.

    "In 4Q earnings earlier this year, IBM disclosed a workforce rebalancing charge that would represent a very low single-digit percentage of IBM's global workforce, and we expect to exit 2024 at roughly the same level of employment as we entered with," they said.

    IBM has also been clear about the impact of AI on its workforce. Last May, IBM's CEO Arvind Krishna said the company expected to pause hiring on roles that could be replaced by AI, especially in areas like human resources and other non-consumer-facing departments.

    "I could easily see 30% of that getting replaced by AI and automation over a five-year period," Krishna told Bloomberg at the time.

    Stellantis is slashing 400 white-collar jobs
    The logo of Stellantis is seen on the company's building in Velizy-Villacoublay near Paris, France, March 19, 2024.
    Stellantis is cutting 400 jobs.

    Gonzalo Fuentes/Reuters

    On March 22, the owner of Jeep and Dodge announced it's laying off employees on its engineering, technology, and software teams in an effort to cut costs, CNBC reported.

    Workers learned they were being let go through video calls after the car company ordered them to work remotely for the day. The cuts are set to occur on March 31.

    Amazon is laying off hundreds in its cloud division in yet another round of cuts this year
    amazon logo in a building lobby
    The cuts follow several rounds of layoffs at Amazon last year.

    Mark Lennihan/Associated Press

    Amazon is cutting hundreds of jobs from its cloud division known as Amazon Web Services, Bloomberg reported on April 3.

    The reduction will impact employees on the sales and marketing team and those working on tech for its retail stores, Bloomberg reported.

    "We've identified a few targeted areas of the organization we need to streamline in order to continue focusing our efforts on the key strategic areas that we believe will deliver maximum impact," an Amazon spokesperson told Bloomberg.

    On March 26, Amazon announced another round of job cuts after the company said it was slashing 'several hundred' jobs at its Prime Video and MGM Studios divisions earlier this year to refocus on more profitable products.

    "We've identified opportunities to reduce or discontinue investments in certain areas while increasing our investment and focus on content and product initiatives that deliver the most impact," Mike Hopkins, SVP of Prime Video and Amazon MGM Studios, told employees in January.

    This year's cuts follow the largest staff layoff in the company's history. In 2023, the tech giant laid off 18,000 workers.

    Apple has cut over 600 employees in California
    Tim Cook
    The cuts follow Apple's decision to withdraw from two major projects.

    Justin Sullivan/Getty Images

    Apple has slashed its California workforce by more than 600 employees.

    The cuts follow Apple's decision to withdraw from its car and smartwatch display projects.

    The tech giant filed a series of notices to comply with the Worker Adjustment and Retraining Notification program. One of the addresses was linked to a new display development office, while the others were for the company's EV effort, Bloomberg reported.

    Apple officially shut down its decadelong EV project in February. At the time, Bloomberg reported that some employees would move to generative AI, but others would be laid off.

    Bloomberg noted that the layoffs were likely an undercount of the full scope of staff cuts, as Apple had staff working on these projects in other locations.

    Representatives for Apple did not respond to a request for comment from Business Insider sent outside normal business hours.

    Tesla is laying off over 10% of its workforce
    A red Tesla outside a Tesla showroom.
    Impacted employees were notified Sunday night that they were being terminated, effective immediately.

    JOHN THYS / Getty

    Tesla CEO Elon Musk sent a memo to employees Sunday, April 14, at nearly midnight in California, informing them of the company's plan to cut over 10% of its global workforce.

    In his companywide memo, Musk cited "duplication of roles and job functions in certain areas" as the reason behind the reductions.

    An email sent to terminated employees obtained by BI read: "Effective now, you will not need to perform any further work and therefore will no longer have access to Tesla systems and physical locations."

    On April 29, Musk reportedly sent an email stating the need for more layoffs at Tesla. He also announced the departure of two executives and said that their reports would also be let go. Six known Tesla executives have left the company since layoffs began in April.

    Grand Theft Auto 6 publisher Take-Two Interactive is reducing its workforce by 5%
    Take-Two Interactive logo next to GTA6 banner
    Take-Two Interactive is slated to cut around 600 roles this year.

    Jakub Porzycki/NurPhoto/Getty Images

    Take-Two Interactive, the parent company of Rockstar Games, said on April 16 that it would be "eliminating several projects" and reducing its workforce by about 5%.

    The move — a part of its larger "cost reduction program" — will cost the video game publisher up to $200 million. It's expected to be completed by December 31.

    As of March 2023, the company said it employed approximately 11,580 full-time workers.

    Peloton is reducing its staff by 15% as the CEO steps down as well
    Barry McCarthy
    Barry McCarthy served as the CEO of Peloton for just over two years.

    Getty/Ilya S. Savenok

    Peloton CEO Barry McCarthy is stepping down, the company announced May 2. Along with his departure, the fitness company is also laying off about 400 workers.

    McCarthy is leaving his role just two years after replacing John Foley as CEO and president in 2022. Peloton said the changes are expected to reduce annual expenses by over $200 million by the end of fiscal 2025 as part of a larger restructuring plan.

    Microsoft-owned Xbox is cutting more jobs
    Attendees of an Xbox conference mill about.
    Xbox employees can opt to take voluntary severance packages.

    INA FASSBENDER/Getty Images

    Xbox is offering some employees voluntary severance packages in May after shutting three units and absorbing a fourth earlier in the month. Microsoft had already made cuts to the division at the start of 2024.

    According to Bloomberg, the offers were extended to producers, quality assurance testers, and more staff at Xbox-owned ZeniMax. Others across the Xbox organization were told that more cuts are coming.

    Xbox president Matt Booty told staff in a May 8 town hall that the studio closures are part of an effort to free up more resources, Bloomberg reported.

    Indeed is cutting 1,000 workers after laying off 2,200 a year ago
    Indeed
    Indeed draws more than 250 million people from around the world each month, making it the largest job site.

    SOPA Images / Getty Images

    Careers site Indeed says it will lay off roughly 1,000 employees, or 8% of its workforce, as it looks to simplify its organization.

    CEO Chris Hyams took responsibility for "how we got here" in a memo in May but said the company is not yet set up for growth after last year's global hiring slowdown caused multiple quarters of declining sales.

    Hyams said the latest cuts will be more concentrated in the US and primarily affect R&D and Go-to-Market teams. That's in contrast to last year's across-the-board reduction of 2,200 workers.

    Read the original article on Business Insider

  • 3 ASX shares at 52-week lows or worse

    A businesswoman gets angry, shaking her fist at her computer.

    The market may be trading close to its record high, but the same cannot be said for the ASX shares in this article.

    Much to the dismay of their shareholders, these shares have just hit 52-week lows or worse. Here’s what you need to know:

    AVITA Medical Inc (ASX: AVH)

    The AVITA Medical share price dropped to a 52-week low of $2.54 on Monday. This means that the regenerative medicine company’s shares have now lost around a third of their value over the last 12 months.

    Almost all of this decline was generated last month when the company released its first-quarter sales update. That update revealed that AVITA Medical expects to report commercial revenue in the range of US$11 million to US$11.3 million for the quarter. This compares to its previous guidance of US$14.8 million to US$15.6 million.

    Management advised that its guidance downgrade is attributable to a slower-than-expected conversion rate of new accounts for its expanded label of full-thickness skin defects.

    Interestingly, its first quarter results are being released on Tuesday. So, watch out for them.

    Fletcher Building Ltd (ASX: FBU)

    The Fletcher Building share price sank to a multi-year low of $2.85 yesterday. This was driven by the release of a disappointing trading update.

    That update revealed that market conditions across the company’s Materials and Distribution divisions have weakened throughout FY 2024. In light of this, management expects to fall short of its EBIT before significant items guidance of NZ$540 million to NZ$640 million.

    It now expects a result in the range of NZ$500 million to NZ$530 million for FY 2024. Management also warned that it expects market conditions to remain challenging in both New Zealand and Australia in the near term.

    Fletcher Building shares are now down approximately 36% since this time last year.

    Omni Bridgeway Ltd (ASX: OBL)

    The Omni Bridgeway share price tumbled to a multi-year low of 77.5 cents on Monday.

    Investors were selling the litigation funder’s shares after the Federal Court of Australia ruled in favour of Commonwealth Bank of Australia (ASX: CBA) in a shareholder class action.

    This is a big loss for the company. It notes that CBA investment’s pre-judgment fair value represented approximately 5% of the aggregate A$2.5 billion non-IFRS portfolio fair value at 31 December 2023 and approximately 8% of the A$4.4 billion EPV.

    Following this decline, this ASX share is now down by a very disappointing 72% over the last 12 months.

    The post 3 ASX shares at 52-week lows or worse appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Avita Medical. The Motley Fool Australia has recommended Avita Medical. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • What are 3 of the safest ASX 200 tech shares in Australia right now?

    a man weraing a suit sits nervously at his laptop computer biting into his clenched hand with nerves, and perhaps fear.

    The global population’s hunger for software and data shows no signs of abating, and the question on many an investor’s mind is, what does this mean for ASX 200 tech shares?

    As recently penned by my colleague Mitch Lawler, the ASX tech sector traded at nosebleed valuations throughout April. In fact, many investors believe tech shares are not a safe place to park their money right now, given such high valuations.

    Let’s also paint the current economic scene for a moment.

    The Reserve Bank of Australia (RBA) expects economic growth to “remain low over the next year”, only picking back up well into 2025. It also predicts inflation won’t return to target levels until the second half of next year, potentially ruling out the chance of a rate cut in 2024.

    Hardly conducive to growth.

    However, returning to the subject of ASX tech shares, I’m of the opinion that tech companies with outstanding projected revenue growth in the face of economic uncertainty have a competitive advantage. That is why, when looking at ASX tech shares, it’s important to gauge what’s behind the optimism.

    One theme that has recently supported surging tech stock prices is artificial intelligence (AI). This has given rise to new growth in data centres.

    For instance, according to consulting giant McKinsey, global demand for data centres is forecast to grow by 10% per year until 2030, driven by advancements in computing and AI.

    So, against this backdrop, here are three ASX 200 tech companies analysts think will hold up well in the current climate, despite high valuations in the sector.

    TechnologyOne Ltd (ASX: TNE)

    When I think “safety”, I think stability. For many ASX 200 tech stock investors, this means solid annual recurring revenue, or “ARR” for short.

    Top broker Goldman Sachs also takes a keen interest in ARR, as evidenced by its recent note on enterprise software company TechnologyOne.

    In case you weren’t aware, TechnologyOne is one of Australia’s largest public software players. It has operations in six countries. Its share price has grown from $2.52 apiece in May 2014 to $16.47 at Monday’s close, an average 20% return per year.

    Analysts at Goldman believe the company could grow its ARR by $425 million this year, a 35% increase from last year.

    But, it says this growth potential is “not being fully reflected at [TechnologyOne’s] valuation”.

    The broker instead values this ASX 200 tech share at $18.10, around 10% upside potential at the time of writing.

    TechnologyOne has also increased its dividend every year since 2005, and any growth in ARR could potentially support continued dividend hikes.

    Xero Ltd (ASX: XRO)

    After Xero announced it would introduce a number of price increases on its Australian subscription plans, Goldman Sachs flagged the accounting platform as a standout looking forward.

    The announced changes will see an 8% to 14% average price increase across all plans, effective 1 July this year.

    Following the update, Goldman immediately upgraded the company’s FY 2025/2026 revenue projections by 2% to 3%, “reflecting strong ANZ annual revenue per user”.

    “We see Xero as very well-placed to take advantage of the digitisation of SMBs globally”, the broker added in its note.

    Goldman analysts also estimate the ASX tech share’s total addressable market to be around $91 billion, and growing.

    That’s currently around 4.7 times the size of Xero’s market capitalisation of $19.1 billion, illustrating the size of the opportunity.

    As such, Goldman values Xero at $156 apiece, which is around 27% upside potential, as I write.

    Nextdc Ltd (ASX: NXT)

    Shares in regional data centre operator Nextdc have rallied around 27% into the green this year.

    Following this, it’s little surprise to see analysts at Morgans chime in on the company, placing Nextdc in a prominent position on the data centre mantlepiece.

    Morgans projects Nextdc could “comfortably” generate over $300 million in earnings before interest, tax, depreciation and amortisation (EBITDA) in the next 5 years.

    That’s around 50 cents per Nextdc share or roughly 2.8% of the company’s market value.

    Morgans rates Nextdc as a buy with a $19.00 valuation. But, as covered by my Foolish colleague James Mickleboro late last month, the broker is also eyeing a potential $40 price target by 2030.

    Foolish takeaway

    Even with a downturn in the economic cycle, as some are predicting, analysts have projected strong revenue growth for each of these ASX 200 tech shares.

    I believe this should provide investors with a level of confidence moving forward and could even be seen as a competitive advantage.

    The post What are 3 of the safest ASX 200 tech shares in Australia right now? appeared first on The Motley Fool Australia.

    Wondering where you should invest $1,000 right now?

    When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    Scott just revealed what he believes could be the ‘five best ASX stocks’ for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, Technology One, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.