Tech News Now: 'The Messi of AI' reports, Tesla struggles continue, and more
Here's all the tech news you need to know today.
Good morning, and welcome to Tech News Now, TheStreet's daily tech rundown.
Tech earnings continued Monday with the fourth-quarter earnings results of Palantir (PLTR) - Get Free Report, which pushed the firm's stock up nearly 20% in after-hours trading. Wedbush's Dan Ives boosted his price target in response to the report.
Tesla (TSLA) - Get Free Report shares, which have been on a steady decline for the past month, fell further Monday, and the case of the U.S. versus Google (GOOGL) - Get Free Report will begin its trial in September.
Tech earnings season continues this week, with Snap SNAP reporting after the bell Tuesday, Disney DIS, Uber UBER and Roblox RBLX reporting Wednesday, and Cloudflare NET up on Thursday.
Tickers we're watching today: (PLTR) - Get Free Report, (TSLA) - Get Free Report and (SNAP) - Get Free Report.
Let's get into it.
Ives: The 'Messi of AI delivers in World Cup fashion'
Palantir, the software and artificial intelligence company perhaps best known for its government contract work, reported earnings of eight cents Monday, in line with analyst expectations. But the company reported revenue of $608.4 million, beating analyst expectations of $602.4 million.
"After nearly two decades of investment, we have positioned ourselves as a fundamentally new software business, and our results reflect this ongoing transformation," CEO Alex Karp said in his annual letter.
The company said that U.S. commercial revenue grew 70% year-over-year, and its U.S. customer headcount spiked 55%. The company brought in a total of $2.23 billion in revenue in 2023; it expects to see at least $2.6 billion in revenue in 2024.
The stock surged around 20% in pre-market trading, jumping from $16.72 per share at close to $20.08 before market-open.
Ives boosted his price target to $30 from $25, saying that Palantir remains an "undiscovered gem and a core part of our thesis in the AI revolution."
"Last night for Palantir was when this company went from an off-Broadway play to a primetime Broadway theater right off of Times Square under the bright lights," he wrote in a client note, highlighting the surge in commercial business.
He believes Palantir will be included in the S&P 500 on the "near-term horizon."
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Mark your calendars for Google's anti-trust trial
On Feb. 5, a U.S. federal judge set a date of Sept. 9, 2024, for the start of a trial in a lawsuit the U.S. Department of Justice filed last year against Google.
The complaint, a civil antitrust lawsuit filed in January of 2023, accuses Google of illegally monopolizing digital advertising products. The complaint says that, over the past 15 years, Google has "engaged in a course of anticompetitive and exclusionary conduct" that resulted in the neutralization of competitors through acquisitions.
The complaint goes on to allege that Google wielded its dominance in the sector to force publishers to use its products, establishing control over the digital advertising market that choked out possible competitors and has resulted in Google taking a 30% share or more of the advertising dollars that move through its product.
Read the Justice Department's complaint here.
More deep dives on AI:
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Google has denied the claims, saying in response that the government's "flawed argument" would "slow innovation, raise advertising fees and make it harder for thousands of small businesses and publishers to grow."
Reporting earnings last week, Google earned $86.31 billion in revenue for the fourth quarter; the company brought in $9.2 billion in revenue from YouTube ads alone.
Related: Analysts revamp Palantir price targets as AI demand drives profit surge
Tesla shares are under more pressure
Shares of Tesla closed Monday down more than 3.5%, falling another 1.6% in pre-market trading. The stock was down by around 1% following market open.
The added pressure came in the wake of a heavy price cut from Piper Sandler coupled with a report that German software corporation SAP will no longer purchase company cars from Tesla.
Piper Sandler said it expects only 1.93 million deliveries in 2024, well below Tesla's own expectations of at least 2.2 million sales for the year. Tesla reported just over 1.8 million unit deliveries in 2023.
Piper Sandler added that "due to an aging product lineup, more price cuts may be necessary," cutting its price target to $225 from $295.
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The AI Corner
The European Union's 27 member states endorsed the EU's AI Act Feb. 2, a month after EU policymakers reached an agreement regarding the main points of the legislation. Lawmakers have worked to hammer out some details within the legislation over the past month, with France, Germany and Italy calling for a lighter approach toward more powerful AI models.
The result lawmakers have come to is one of transparency requirements for all models, with greater requirements for more powerful models.
The AI Act is not yet formally adopted, however; the EU's Internal Market and Civil Liberties Committees will adopt the AI Rulebook Feb. 13, preceding a more formal adoption vote by the EU in April.
Must-read research
Emily Bender, a prominent AI researcher and linguistics professor at the University of Washington, recently published a new paper breaking down the ways in which tech companies, the press and researchers have described the technology in ways that dehumanize people.
Prominent among these pathways toward dehumanization is the computational metaphor, one in which technologists compare a human brain to a computer, and a computer to a human brain.
"In short, this metaphor builds up computers at the expense of how we understand humans," Bender says.
Read the full paper here.
Contact Ian with AI stories via email, [email protected], or Signal 732-804-1223.
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