Weekly StockWatch: ChatGPT Mania, Disney Subscribers Loss, Uber Strong Results & More
ChatGPT Mania
ChatGPT, which stands for Chat Generative Pre-trained Transformer, is an Artificial Intelligence (AI) chatbot developed by OpenAI [1]. It uses deep-learning, to generate human-like responses to questions. It was launched in November 2022 and within just a few days, it had already reached more than one million users, according to Mr Altman CEO of Open AI [2]. The tool has generated a lot of buzz, with tech heavyweights trying to get in on the action.
OpenAI is backed by Microsoft, which announced last month a multiyear, multibillion dollar investment in the company, moving into the third phase of their collaboration [3]. This week the tech behemoth announced a new AI-powered Bing search engine [4], harnessing the power of this partnership that could transform the way we use search engines.
Google-parent Alphabet (GOOG.us) introduced its own conversational AI service, named Bard, aiming to make it more widely available in the upcoming weeks [5]. It showcased it during Wednesday's "Live in Paris" event, but it appeared to be far behind ChatGPT and Microsoft's take, causing its stock to drop.
China's Baidu announced also announced an AI chatbot [6], which it calls Ernie bot, helping the firm's stock higher. According to CNBC tech and e-commerce giant Alibaba is also working ChatGPT rival. [7]
Disney Subscribers Losses
Disney+ recorded the first contraction in its subscriber base since it launched in late 2018, as it lost 2.4 million users in the quarter ended December 31, as reported on Wednesday. Hulu and ESPN+ added users, but not enough to offset the above loss. As such, all three streaming platform combined relinquished one million users, now standing at 234.7 million, still ahead of rival Netflix. [8]
In a stunning move a few months back, the entertainment giant brought back as CEO Mr Bob Iger, who had stepped down in 2020. His previous stint had been highly successful, spearheading the acquisition of LucasFilms and Marvel, as well as the leap into streaming.
M Iger did not lose any time and announced this week a restructuring plan, that includes $5.5 billion in costs cut and the layoff of 7,000 employees. Investors seems to like this plan and the overall strong financial results, since DIS.us opened on Thursday, but could not hold the gains, in an overall bad day for Wall Street.
Uber's Strongest Quarter
The ride-hailing firm reported impressive results for the fourth quarter and full 2022 on Wednesday before market open, with its CEO Dara Khosrowshahi speaking of the "strongest quarter ever", "capping off our strongest year" [9]. Revenues jumped 49% y/y in Q4, to $8.6 billion, while its profitability also improved, with Adjusted EBITDA of 665 million and Adjusted EBITDA margin of 2.2%. The core Mobility segment was the main driver of those profits, which exceeded $1 billion, as well as the main Revenue generator with $ 4.136 billion. [10]
Uber provided upbeat forward guidance for Q1 2023, expecting Adjusted EBITDA of $660-700 million and Gross Bookings of $31-32 billion. Its CEO noted that this guidance highlights the "great momentum" with which the firm is entering the new year [9]. Markets reacted positively, as UBER.us jumped more than 5% to one year highs.
A day later rival Lyft (LYFT.us) reported Revenue of 1.2 billion in the fourth quarter of 2022, up on both yearly and quarterly basis. However its Adjusted EBITDA Loss ballooned to $248.3 million.
Furthermore, it provided underwhelming guidance for the current quarter. It expects revenue to fall back below $1 billion and Adjusted EBITDA of just $1-15 million [11]. Markets reacted negatively to that, as the stock sheds around 30% in today's premarket.
BP Record Profits
The UK-based energy multinational registered record profits in 2022, with underlying replacement cost (RC) profit of $27,653 billion, more than double compared to the previous year. Furthermore, BP announced a 10% dividend increase $2.75 billion share buyback. [12] BP.uk soared Tuesday's results and gains around 15% this week, at the time of writing, hitting the highest levels since 2019.
The energy sector is reaping the benefits of the high oil and gas prces in the aftermath of the war in Ukraine. French TotalEnergies (TTE.fr) also posted record profits in excess of $36 billion this week [13], after a series of blockbuster results from other oil giants such as Shell.
Next Week (February 13-17)
The upcoming week does not include many big names reporting from the US, but Coca-Cola and Airbnb stand out. Focus will shift to Australia and firms such as retail giant Wesfarmers and Qantas Airways, as the airline industry has been seeing a strong recovery. Europe's airplane maker Airbus will also be in the spotlight.
Nikos Tzabouras
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
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