One should understand that when thinking of which AI stock to invest in there is so much more than semiconductors. With the breadth of AI investing options, the industry should continue to bring opportunity. For example, the mortgage finance company Rocket Companies, Inc. (NYSE:RKT) uses AI for mortgage banking, underwriting, and servicing. In 2023, The company piloted an AI virtual assistant with 325 mortgage bankers and outbound client calls.

Artificial intelligence revolution

The artificial intelligence (AI) revolution has hit the ground running since last year, and there seems to be no end in sight to it in the near future.

It’s no surprise, then, that the Nasdaq CTA Artificial Intelligence & Robotics Index, a benchmark for the AI industry as a whole, is up about 12% in the last year. AI technology gave a boost to a range of AI companies. One of the top AI stocks that gained good profits were The Invesco Dynamic Software ETF (IGPT) that gained over 30% in 2023 compared to the S&P 500’s 25% growth.

Best opportunity to earn with AI stocks?

At a macro level, generative AI remains a priority spending area for companies. After all, AI is powering some of the most profound innovations in multiple sectors. Automatic video generation, molecule development, advanced driver assistance systems (ADAS), robotic process automation and battlefield intelligence are all technologies being powered by AI.

The AI trade is alive and well, as Nvidia’s (NASDAQ:NVDA) earnings proved on February 21. It was one of the most awaited earnings reports this earnings season. Fortunately, the chip maker, regarded as the bellwether of AI stocks, delivered solid results.

Companies are seeing tremendous opportunities to lead this revolution and are investing heavily. They are investing in AI infrastructure and buying chips required for training and inference. Some are directing computers and talent to develop large language models and applications that leverage AI. These investments have created a once-in-a-generation opportunity for some AI stocks.

Which are the best AI stocks to buy?

The following top 4 AI stocks have set themselves apart as leaders and will continue to do so in 2024. Their quarterly results were beyond expectations and highlighted their AI growth stories which were secular.

Nvidia (NVDA)

One of the best AI stocks to buy without a doubt is high-end chipmaker Nvidia which provides the massive processing power needed to run advanced AI applications. Nvidia was the best-performing stock in the entire S&P 500 in 2023, and shall continue the run through 2024. It is largely due to the company’s AI exposure.

On February 21, 2024, Nvidia reported another stellar quarter exceeding consensus estimates. The company reported record Q4 FY2024 revenues of $22.1 billion, beating analysts’ consensus estimates by $1.48 billion. The revenue number represented an impressive 265.3% year-over-year (YoY) growth rate.

Microsoft Corp. (MSFT)

After announcing a $1 billion investment in ChatGPT maker OpenAI in 2019, Microsoft increased its investment to $13 billion in January 2023 and integrated ChatGPT into its Bing search engine shortly thereafter. In September 2023, Microsoft announced it is integrating its AI products into a single AI experience called Microsoft Copilot. OpenAI has reportedly recently made impressive breakthroughs with its new AI model called Q* (pronounced “Q star”). Analyst Joseph Bonner says Microsoft’s dividend is safe and its ongoing investments in cloud services and AI position the company for long-term growth.

Alphabet Inc. (GOOG, GOOGL)

Google and YouTube parent company Alphabet uses AI and automation in virtually every facet of its business, from ad pricing to content promotion to Gmail spam filters. Google launched its Bard AI chatbot in March 2023. In September, Google integrated Bard into its full suite of tools, including YouTube, Google Drive and Google Flights. In December, Google announced Gemini, its most capable AI model that incorporates different types of media.

Amazon.com Inc. (AMZN)

Amazon has integrated AI into every aspect of its business, including targeted advertisements, marketplace search and recommendation algorithms, and Amazon Web Services. The company offers a wide range of AI and machine learning services to its cloud customers, including advanced text analytics, automated code reviews and chatbots. In September, Amazon integrated generative AI capabilities into its Alexa personal assistant that allows it to express opinions. Analyst Jim Kelleher says the integration of AI technology may be a shot in the arm for Amazon’s slowing AWS growth.

More AI stocks list to invest in

Other than the above four, for investors which other AI stocks to buy. Here is the list of few best AI stocks that one can invest in and would be profitable:

• Taiwan Semiconductor Manufacturing Co. Ltd. (TSM)

Taiwan Semi recently said demand for high-end AI chips will help fuel 20% revenue growth for the company in 2024,

• Adobe Inc. (ADBE)

Alexandru Costin, the company’s vice president of generative AI, told TechRadar that Adobe is transitioning from a software company to an AI company. As per analysts generative AI investments will help Adobe rapidly expand its total addressable market.

• ASML Holding NV (ASML)

ASML is the only major producer of the extreme ultraviolet (EUV) lithography equipment necessary to produce advanced AI chips. As per its CEO, demand for premium tier edge devices and generative AI applications will accelerate ASML’s EUV equipment sales growth in 2024 and 2025.

• International Business Machines Corp. (IBM)

For years, IBM has been developing ways to adapt its AI supercomputer Watson to revolutionize health care, finance, law and academia.

• Palantir Technologies (PLTR)

After the latest earnings report, Palantir Technologies (NYSE:PLTR) received widespread praise from Wall Street. The company has leaned into the AI moment by conducting AIP boot camps.

• Super Micro Computer (SMCI)

Over the past year, one of the best-performing AI stocks has been Super Micro Computer (NASDAQ:SMCI) up over 992%. The firm is seeing soaring demand for its AI plug-and-play servers. With unparalleled demand and market share gains, Super Micro is one of the best AI stocks.

AI stocks present investors with the opportunity to tap into one of the most popular technology trends today. With companies across virtually all industries and sectors exploring ways to integrate AI into their operations, firms that are focused on the hardware and software required to run AI programs stand to benefit. Knowing which AI stock to buy becomes of utmost importance as there are significant risks to investing in AI stocks, including the uncertain future of the industry and the potential dangers of AI technology itself.

The post Which Are the Best AI Stock to Buy In 2024? appeared first on Industry Leaders Magazine.

Palantir Technologies (PLTR) is a software company that was founded in 2003 by Peter Thiel, Nathan Gettings, Joe Lonsdale, Garry Tan, Stephen Cohen, and Alexander Karp. “We make products for human-driven analysis of real-world data,” the company states and to achieve this, the company focuses on building platforms and layering applications to create a system for effective big data analysis. 

Palantir Stock Price Forecasts

In the recently released Palantir earnings report for the fourth quarter, Palantir reported revenue of $608 million, marking a 20 percent increase compared to the previous year and surpassing the FactSet consensus estimate of $603 million. Consistency is key and this is where the company wavered as its first-quarter revenue projections fell slightly short of the consensus, forecasts placing it between $612 million and $616 million whereas the analysts had expectations of $617 million. Overall, the company has quite positive expectations for revenue numbers consolidated for 2024, anticipating revenue between $2.652 billion and $2.668 billion, compared to the external estimates of $2.644 billion. Palantir expects adjusted free cash flow to range between $800 million to $1 billion for 2024 and also has an optimistic growth rate prediction of at least 40 percent. 

Q4 2023 Highlights of the Palantir Earnings Report 

Palantir reported a net income of $93 million, which represents the profit the company made after accounting for all expenses and taxes. This net income margin was 15%, indicating that $0.15 out of every dollar of revenue generated was profit. It also reported a GAAP EPS of $0.04; the adjusted EPS was $0.08. Adjusted EPS provides a clearer picture of the company’s ongoing profitability, as it removes unusual or non-operational items. Breaking down the profits behind the Palantir stock price surge, the US commercial operations revenue increased by 70 percent compared to the previous year, reaching $131 million while overall commercial revenue grew by 32 percent year-over-year to $284 million. Palantir’s government also witnessed an 11 percent year-over-year growth to $234 million. 

The adjusted income from operations for US commercial operations was $209 million, with a margin of 34 percent. This represents the fifth consecutive quarter of expanding adjusted operating margins. Palantir reported strong cash metrics, with cash from operations totaling $301 million, representing a 50 percent margin. Adjusted free cash flow was $305 million, also representing a 50 percent margin. Additionally, the company holds $3.7 billion in cash, cash equivalents, and short-term US treasury securities. Overall, the company witnessed significant growth in its revenue, customer count, contract value, and cash metrics, making the Palantir stock price forecast perceive a continued upward trajectory for the company. With four straight quarters of profitability, Palantir’s stock might qualify for inclusion in the S&P 500 according to CNBC.

Palantir Stock Price

The Palantir stock price currently stands at $16.72. The stock closed at $16.09 in the previous trading session and opened at $16.21 at the beginning of the current session. The PLTR stocks have a day range of $16.48 to $17.87 and the 52-week range has been quite significant, from $7.19 to $21.85. With a 263.1 PE ratio and $0.08 earnings per share, the analyst consensus currently lies on holding on to the Palantir stock while the market stabilizes around it. The stock appears to be doing quite alright and there should be no major shifts in its value anytime soon. Tip Ranks also indicates a bullish blogger sentiment indicates optimism and confidence in the stock’s potential for price appreciation so if there are changes to the Palantir stock, it should trend upwards.

“The demand for large language models from commercial institutions in the United States continues to be unrelenting. Every part of our organization is focused on the rollout of our Artificial Intelligence Platform (AIP), which has gone from a prototype to a product in months. And our momentum with AIP is now significantly contributing to new revenue and new customers.” —Alexander C. Karp, Chief Executive Officer & Co-Founder of Palantir Technologies Inc.

The company’s continued work with the government has been providing the company with quite a bit of stability with nearly 60 percent of its revenue from this source, but its commercial segment and AI offerings have been pushing the business forward quite efficiently as well. Some appear wary that some of the company’s governmental contracts are up for renewal and any hindrance to the procedure could cause the stocks to waver but there are no signs that there should be any issue in the renewal process. Others are also unsure if the company will be able to prolong its current AI success, dissuading a “sell” rating right off the bat. The company appears largely well-placed to continue growing towards its predicted numbers, especially as the fourth platform, the AIP service, has been expanding exponentially. All things considered, it does seem like a good time to hold Palantir stock today.

The post Is It a Good Idea to Hold Palantir Stock After The 19% Jump Today? appeared first on Industry Leaders Magazine.

The U.S. stock market was not affected by inflation, high interest rates, the bankruptcy crisis that struck a small number of U.S. banks, and geopolitical tensions around the world. That uptick accelerated in December amid rumors of imminent rate cuts, and markets climbed back to all-time highs offering bulls an early Christmas present while acting as coal in perma-bears’ stockings.

U.S. indexes rise

Though the 2023 stock market is ending the year on a high note, there are some stock market winners and some losers. Some companies did better than most but others couldn’t ride the wave back up and might not make it through 2024 intact.

All three major indexes on the New York Stock Exchange recorded gains during the current year. The influx of investors into technology stocks supported that growth. The emergence of generative AI has likewise increasingly played an important role in the economy.

Since the beginning of 2023, the S&P 500 recorded a 24.4 percent increase. That’s more than twice the index’s typical annual return.

Meanwhile, the Dow Jones Industrial Average recorded a 13.3 percent increase. Additionally, the technology-dominated Nasdaq Composite recorded a 44 percent increase, putting it on track for top performance annually since 2020. However, it is crucial to take into account that these percentages are subject to change by the end of the last trading day of 2023.

Top performing stocks on Wall Street

Technology stocks were the top-performing stocks on Wall Street this year, reclaiming their gains in 2023 after sharp losses in 2022. They were supported by the so-called mega technology stocks, led by Apple, Amazon, Alphabet, Meta, Microsoft, and Tesla. All of them consolidated the gains of the S&P 500 index so far this year. And there were some huge gains. Both Microsoft (MSFT) and Apple (AAPL) each added nearly $1 trillion in market value in just one year.

According to Bloomberg, at the end of 2022, experts expected that the S&P 500 index would end 2023 at 4,078 points. In fact, the index has exceeded 4,700 points at present. It recorded gains of more than 22 percent, which means that the expectations were completely far-fetched and exceeded the state of pessimism that prevailed when they were released.

Best Wall Street stocks 2023

As per George Khoury, global head of education and research at CFI Group the top-performing stocks on Wall Street this year are:

Carvana (CVNA): The leading online used car sales company announced an impressive growth of 1,082% in its stock price from the beginning of 2023 to date. Strong net income in the third quarter of 2023, which amounted to $741 million supported this growth.

ImmunoGen Inc. (IMGN): ImmunoGen’s stock grew by approximately 581.7% since the beginning of 2023.

MoonLake Immunotherapeutics (MLTX): MoonLake witnessed strong growth since the beginning of 2023, amounting to 478.2$.

Riot Platforms Inc. (RIOT): Riot is a Bitcoin mining company whose stocks rose by 442.2% during 2023.  It benefited from the recovery in the cryptocurrency market to achieve its remarkable growth.

BridgeBio Pharma Inc. (BBIO): BridgeBio is a company that specializes in treating hereditary diseases and cancers. Its stock has grown by 406.8% since the beginning of 2023.

Symbotic Inc. (SYM): Symbotic witnessed a remarkable growth of 341.9% since the beginning of 2023. The company met the needs of key customers such as Walmart, Albertsons, and C&S Wholesale Grocers, which contributed to its revenue growth of 60% in the fourth quarter of 2023.

Affirm Holdings Inc. (AFRM): Affirm Holdings is the leading provider of buy now, pay later services. It has achieved strong growth since the beginning of the year, reaching 341.8%.

AppLovin Corp. (APP):  It achieved a growth of 318.9% since the beginning of 2023. AppLovin is a global company specializing in providing mobile application technology.

Stocks shedding the most in 2023

As there were 2023 stock market winners, so were there some losers. Investors lost $462 billion holding just eight stocks dropping the most market value this year, including ailing vaccine maker Pfizer (PFE), struggling oil giant Chevron (CVX) and Johnson & Johnson (JNJ). Each of these stocks shed more than $30 billion apiece just this year more than any other in the S&P 500, as per analysis’s.

Stark division between 2023 stock market winners and losers

The division between the losers and winners is stark this year. “This year’s excellent S&P 500 returns have been concentrated in just three Big Tech-heavy sectors,” said Nick Colas of DataTrek Research.

Suffering losses this year hurts all the more as the S&P 500 had such a good year.

Biggest S&P 500 Market Value Losers in 2023 year-to-date

Bracing for 2024

This year serves up another remind of the importance of cutting losses on your losing stocks before they get too big. This move can make a life-changing amount of difference.

It’s a good lesson to learn before 2024.

The post Wall Street 2023: Stock Market Winners and Losers appeared first on Industry Leaders Magazine.

Today, SpaceX has become a dominant force in the industry. Starlink project, a growing constellation of satellites is one of its many ambitious project. SpaceX has captured the imagination of both investors and space enthusiasts alike.

SpaceX valuation

In recent news, it has come to light that SpaceX is considering a share sale that could value the company at an astounding $175 billion or more. SpaceX CEO Elon Musk announced on Twitter that the company’s Starlink satellite internet business “achieved breakeven cash flow.” Two years ago, Musk emphasized that making Starlink “financially viable” required crossing “through a deep chasm of negative cash flow.”

This potential SpaceX valuation would make, it one of the most valued companies in the world, surpassing giants like Disney and Comcast.

Potential Share Sale and Valuation of SpaceX

According to sources, SpaceX has initiated discussions about insider share sale at a price that would value the company at $175 billion or higher. The company is reportedly considering a tender offer ranging from $500 million to $750 million, with shares priced at approximately $95 apiece. This potential SpaceX valuation represents a significant premium to the $150 billion valuation the company obtained through a tender offer earlier this year.

The terms and size of the tender offer may vary depending on the level of interest from both insider sellers and buyers¹. However, if the $175 billion valuation is realized, it would position SpaceX among the world’s 75 biggest companies by market capitalization, on par with industry titans such as T-Mobile USA Inc., Nike Inc., and China Mobile.

SpaceX’s dominance in Space Industry

SpaceX, formally known as Space Exploration Technologies Corp., is based in Hawthorne, California, and has emerged as a dominant player in the market for commercial space launch services¹.

One of the key factors contributing to SpaceX’s success is its Falcon rockets, which have established the company’s near-monopoly on the U.S. satellite launch market. SpaceX has consistently outperformed its closest rival, China’s space agency, in terms of the number of orbital launches. In the first nine months of this year alone, SpaceX made 69 orbital launches, compared to China’s 30.

SpaceX has extended its operations to government contracts as well as the private sector. The company sends payloads to orbit for private-sector customers, as well as for prestigious organizations like the National Aeronautics and Space Administration (NASA). This diverse portfolio of clients has contributed to SpaceX’s revenue growth, which is expected to reach approximately $9 billion this year and rise to $15 billion in 2024.

Starlink project and its potential

In addition to its rocket launch services, SpaceX is also making waves with its Starlink project. Starlink aims to provide internet connectivity from space, utilizing a growing constellation of satellites in low-Earth orbit. The service has gained significant traction, with over 1.5 million subscribers in less than three years since its debut.

The potential of Starlink to generate substantial revenue cannot be understated. SpaceX projected that the Starlink would achieve profitability in 2023, following a cash flow positive quarter in the previous year. This success has been further bolstered by winning a Pentagon contract to provide Starlink service in Ukraine, although the financial details of the agreement remain undisclosed.

SpaceX’s financial performance and IPO speculation

Despite its astronomical valuation, SpaceX has not been immune to financial challenges. After two years of losses, the company reported a $55 million profit for the first quarter of 2023, with revenues reaching $1.5 billion². This positive financial performance reflects the company’s ability to navigate the complexities of the space industry and capitalize on its diverse revenue streams.

In recent months, speculation has been rife about a possible SpaceX IPO, particularly with its Starlink division. However, Elon Musk denied reports that SpaceX was considering an IPO for Starlink by 2024³. Musk indicated that an IPO for Starlink is unlikely before 2025 or later.

SpaceX’s impact

The soaring valuation of SpaceX, potentially reaching $175 billion or more, is a testament to the company’s extraordinary achievements and its position as a leader in the space industry. With its Falcon rockets dominating the commercial space launch market and the rapid growth of its Starlink project, SpaceX has captivated the imagination of the world.

While the future remains uncertain, one thing is clear: SpaceX is poised to continue pushing the boundaries of space exploration and technology. Whether SpaceX embarks on an IPO, further expands its satellite network, or achieves its audacious goal of Mars colonization, SpaceX’s impact on the world of space will undoubtedly be profound.

The post The Soaring Valuation of SpaceX: A Closer Look appeared first on Industry Leaders Magazine.

Options and stocks are two ways to put money to work in the market, but they offer sharply different profiles for risk and reward. The major difference between stocks and options is stocks offer high-risk, high-reward potential, while options take that a couple notches higher, with the possibility to double or triple your money (or more) at the risk of losing it all, often in the matter of a few weeks or months.

What’s the difference between stocks and options?

The biggest difference between options and stocks is that stocks represent shares of ownership in individual companies, while options are contracts with other investors that let you bet on which direction you think a stock price is headed. But despite their differences, these assets can complement one another in a portfolio.

Buying shares vs options

If you’re intent on diving into the market via stocks vs. options, the guidelines below can help you make the right choice. Let’s start with a basic breakdown of the differences between stocks and options:

Pros and cons of stocks

Lets look at the pros and cons of stocks

Pros of stocks

If you’re looking for a straightforward way to begin investing for a goal more than five years away, such as retirement, stocks may be a good choice.

The beauty of investing in stocks is simplicity: You buy a stock, hoping its price will rise so you can sell at some point down the road at a higher price.

For beginner investors, and especially people with a long-term strategy, stocks are a more common entry point into the stock market than options.

Cons of stocks

The risk associated with stocks is straightforward: The price could plummet and you’d lose all or most of your investment. Because the performance of individual stocks can be volatile day to day, experts generally recommend investing in stocks with money you won’t need for at least five years. To further reduce risk, it’s typically best to avoid piling all your money into a single stock.

Beyond that, how actively you trade stocks can affect performance — and how much you’ll pay in commissions, fees and capital gains taxes on profits.

Pros and cons of options

Like stocks even options have some pros and cons.

Let’s look at the pros of options

• A more tactical approach to investing
• With a smaller investment requirement
• Flexibility regarding timing or downside risks.
• With options, the associated time period for your investment is inherently shorter, making them more appealing to traders who buy and sell regularly.

Cons of options trading

• Options trading requires a more hands-on approach than investing in stocks.
• You may wish to exercise the option before expiration, and that means you’ll have to keep a watchful eye on the related stock’s price.
• Also, some options strategies are riskier than others, so make sure you understand the trade in advance.

“The more you trade, the higher your costs.”

• Another downside of options trading is the related costs, which can be higher than for stocks.
• As with stocks, be sure to factor in capital gains taxes. These taxes are higher for assets you’ve held less than a year.

Making the decision: options vs. stocks

options vs stocks what to choose? Well, that decision is entirely a personal choice, based on ones investing style. Beginner investors and those who prefer simplicity generally will stick to stocks for their straightforward nature. Those who favor an active investment approach and love to watch the market may find options appealing. Buying shares vs options is not necessarily sticking to one asset. Whatever you decide, just make sure you understand what you’re doing first.

The post Options vs. Stocks: What Could Work for You? appeared first on Industry Leaders Magazine.

Once you want to know how to start investing, open either a taxable brokerage account or a tax-advantaged account like an IRA, depending on your goal. Pick an investment strategy that makes sense for your saving goals, how much you’re investing and your time horizon. Understand your investment choices such as stocks, bonds and funds to build a portfolio for your goals.

What are Stocks and how to start investing in stocks?

A stock is a share of ownership in a single company. Stocks are also known as equities. Stocks are purchased for a share price, which can range from the single digits to a couple thousand dollars, depending on the company. As a beginner investing in stocks can be intimidating. Hence when you want to know how to invest in stocks few points needs to be taken care of, which we shall delve on.

As a newbie to the world of investing, you’ll have a lot of questions, not the least of which is: How much money do I need, how do I get started and what are the best investment strategies for beginners and how to start investing in stocks?

Investing in stocks for beginners

Here are five steps to start investing in stocks for beginners in 2023:

Start early

Investing when you’re young is one of the best ways to see solid returns on your money. That’s thanks to compound earnings, which means your investment returns start earning their own return. Compounding allows your account balance to snowball over time.

How much to invest?

How much you should invest depends on your financial situation, investment goal and when you need to reach it.

One common investment goal is retirement. As a general rule of thumb, you want to aim to invest a total of 10% to 15% of your income each year for retirement.

Start with opening an account

Brokerage accounts are also a good option for people who have maxed out their IRA retirement contributions and want to continue investing.

Pick an investment strategy

Your investment strategy depends on your saving goals, how much money you need to reach them and your time horizon.

Understand your investment options

Once you decide how to invest, you’ll need to choose what to invest in. Every investment carries risk, and it’s important to understand each instrument, how much risk it carries and whether that risk is aligned with your goals. The most popular investments for those just starting out include:

Other key things to know about investing as a beginner

The process for investing does not need to be complex. A best practice is to limit investment decisions rooted in speculation, panic, or fear as these feelings can often lead to significant losses and higher risk. The important thing for new investors is to take things slow and strive for consistency.  

When in doubt, refer to your investing goals as your North Star to keep your emotions and your portfolio on track and remember that investing is a process that happens over time and not overnight.

Other investment options for beginners

For beginners, other than investing in stocks, there are other investment options too. Lets look into them in brief:

Bonds

A bond is essentially a loan to a company or government entity, which agrees to pay you back in a certain number of years. Bonds generally are less risky than stocks because you know exactly when you’ll be paid back and how much you’ll earn. But bonds earn lower long-term returns, so they should make up only a small part of a long-term investment portfolio.

Mutual funds

A mutual fund is a mix of investments packaged together. Mutual funds allow investors to skip the work of picking individual stocks and bonds, and instead purchase a diverse collection in one transaction. They are generally less risky than individual stocks.

Exchange-traded funds

Like a mutual fund, an ETF holds many individual investments bundled together. The difference is that ETFs trade throughout the day like a stock, and are purchased for a share price.

An ETF’s share price is often lower than the minimum investment requirement of a mutual fund, which makes ETFs a good option for new investors or small budgets. Index funds can also be ETFs.

The post Beginners Guide: How to Start Investing in 2023 appeared first on Industry Leaders Magazine.

While more than 2/3rd of CEOs see the need to act quickly on Gen AI to avoid giving their competitors a strategic advantage, 68% reported being stymied by uncertainty around this space.

CEOs embracing Gen AI

Conscious of the technology’s potential to disrupt their own business models, almost all CEOs (99%) told the quarterly survey of 1,200 global CEOs that they are making or planning significant investments in gen AI. However the findings report that investing in an AI-enabled future is easier said than done: more than a quarter (26%) of CEO respondents say the rapid pace of Gen AI progress is the biggest challenge to making capital allocation decisions on gen AI initiatives.

AI adoption strategies for CEOs

“The potential for gen AI to reinvent the way companies operate cannot be ignored, and CEOs are making bold investments in the technology to solidify their competitive advantages and future-proof their organizations,” commented Andrea Guerzoni, EY Global Vice Chair – Strategy and Transactions. “However, CEOs know that companies with genuine gen AI capabilities can become game-changing allies or acquisitions, but the relentless hype around artificial intelligence has clouded their view of the landscape.”

The past four years have seen CEOs reacting quickly to shifting consumer behaviors, a resetting and reconfiguring of supply chains, an upending of the global energy market, and rapid changes in the growth, inflation and interest rate environment. Yet, a significant number of respondents anticipate higher levels of growth (66%) and profitability (65%) in 2024 compared with 2023.

Corporate Expectations in 2024

With global economic growth expectations more likely to be revised on the downside in the near-term, AI adoption strategies that CEOs should consider should show their own growth expectations reflecting the slower global market projected over the next five years.

“It is possible that those CEOs planning for higher growth have already made the hard choices during the past few years, both in terms of competitive positioning and potential growth opportunities,” Guerzoni says. “For those yet to do so, challenging the existing business model based on the current and anticipated market conditions is an imperative step that needs immediate attention.

“CEOs need to scrutinize every area of their operations, from both a product and geographic angle, and decide which underperforming areas to jettison. Maximizing growth and profitability to fund this transformation will be the key to unlocking long-term value creation for companies.”

Business outlook for big companies

The business outlook of big companies and their leaders continues to brighten.

Almost 61% of U.S.-based CEOs expect higher revenue growth in 2024 and 69% expect higher profitability, as per a survey. In the global survey that canvassed 1,200 CEOs, 66% forecast higher revenue growth in 2024, and 65% forecast higher profitability. The increase in optimism appears to be affecting the appetite for mergers and acquisitions (M&A), but to different degrees in different parts of the world. While 52% of U.S. large-company CEOs said they expect to be involved in M&A activity over the next 12 months, just 35% of respondents globally said the same.

Every U.S. CEO surveyed said they were currently making or planning significant investments in generative GenAI, that describes artificial intelligence that uses existing data to generate new content. Around 62% of CEOs want to have AI adoption strategies to avoid giving competitors a strategic advantage, but that isn’t easily achieved; 61% said uncertainty around Gen AI makes it challenging to develop a strategy.

The survey comes on the heels of the EY European Financial Services AI Survey, in which 68% of respondents said that up to one-quarter of their workforce will require AI training in the next six to 12 months.

The post CEOs Big on Gen AI Investment to Keep Up With Competition appeared first on Industry Leaders Magazine.

What is a Startup And How Are They Funded?

Startups are entrepreneurial ventures that aim to develop innovative ideas into scalable and profitable business models. These companies often operate in emerging industries and are characterized by their potential for rapid growth and disruption. Startups typically face high levels of uncertainty and require significant investments in research, development, and marketing to succeed.

A startup investment can be funded through various sources, including venture capital, bootstrapping, crowdfunding, and more. Let’s delve into a deeper breakdown of nearly all the ways that make up investing into a business. 

Bootstrapping

Bootstrapping refers to the practice of investing in a startup using personal savings, credit cards, or loans. The self-funding approach allows founders to maintain full control over their company as their startup investors but has limits to the scale and speed of growth.

Friends and Family

Startups often turn to friends and family for initial funding. This source of capital can provide early-stage support when traditional funding avenues may be unavailable. However, it’s essential to approach this method to invest in startups with caution to avoid straining personal relationships.

Angel Investors

Angel investors are high-net-worth individuals who provide capital and mentorship to startups in exchange for equity ownership. These startup investors often bring valuable industry experience and connections to help businesses succeed.

Venture Capital

Venture capital firms invest in startups with high growth potential in exchange for equity. These firms typically provide funding in multiple rounds, starting with seed funding and progressing to Series A, B, and beyond. Venture capitalists often take an active role in guiding the startup’s growth and may require a seat on the board of directors.

Crowdfunding

Crowdfunding platforms allow startups to raise funds from a large number of individuals, typically through online campaigns. This approach of investing into a small business, can provide early validation and market exposure while allowing supporters to become early backers of promising ventures.

Accelerators and Incubators

Accelerators and incubators provide startups with funding, mentorship, and resources in exchange for equity or a fee. These programs offer guidance and support to help startups refine their business models, develop their products, and prepare for future funding rounds.

What Are The Different Ways to Invest in Startups?

When it comes to investing in startups, there are several avenues to consider. Each approach offers different levels of involvement, risk, and potential returns. Here are four common ways to invest in startups.

Angel Investing

Angel investing involves providing capital to early-stage startups in exchange for equity ownership. The best startup companies to invest in typically have angel investors who have a hands-on approach – offering mentorship and guidance to the startups they invest in. This type of investment requires a high level of due diligence and industry expertise.

Venture Capital Investing

Venture capital (VC) firms pool funds from various investors to invest in startups with high growth potential. VC investments are typically made in multiple rounds, with each round offering different terms and valuations. The venture capital investing method requires significant capital and expertise in evaluating startup opportunities.

Equity Crowdfunding

Equity crowdfunding platforms allow individual startup investors to contribute smaller amounts of capital in exchange for equity in small businesses. This approach has gained popularity in recent years, offering a more accessible entry point for investors interested in the startup ecosystem.

Syndicate Investing

Syndicate investing involves pooling funds with other individual investors to collectively invest in startups. Syndicate leads, often experienced angel investors or venture capitalists, curate investment opportunities and negotiate deal terms on behalf of the syndicate members. This approach allows individual investors to benefit from the expertise and networks of experienced professionals.

Assessing the Risks of Startup Investments

Investing in startups comes with inherent risks. It’s essential to evaluate these risks carefully before committing capital. Some common risks associated with startup investments include the following.

High Failure Rate

Startups have a high failure rate, with many failing to achieve profitability or secure additional funding. Investing in startups requires a high tolerance for risk and the understanding that not all investments will generate positive returns.

Market Demand and Competition

Startups operate in dynamic and competitive markets. It’s crucial to assess market demand and competition to determine if the business’ product or service has a viable market and a unique value proposition, before investing in a startup.

The success of a startup often hinges on the capabilities and experience of its management team. Evaluating the team’s track record, expertise, and ability to execute the business plan is also critical.

Legal and Regulatory Risks

Startups operate in a complex legal and regulatory environment. It’s important to assess potential legal and compliance risks that could impact the startup’s operations or hinder its growth.

5 Key Factors to Consider Before You Invest in Startups

When evaluating startup investment opportunities, consider the following key factors.

Market Size and Potential For Revenue

Assess the market size and growth potential of the startup’s target market. A large and growing market can indicate significant opportunities for revenue and expansion. Examine the startup’s business model and revenue streams. Assess the potential for recurring revenue, diversification, and long-term profitability.

Unique Value Proposition

Evaluate the startup’s unique value proposition and how it differentiates itself from competitors before investing in the small business. A strong value proposition can help a startup gain a competitive advantage and attract customers.

Scalability and Growth Strategy

Consider the startup’s scalability and its strategy for achieving sustainable growth. Look for evidence of a well-defined growth plan and the ability to scale operations efficiently.

Competitive Landscape

Analyze the startup’s competitive landscape and its ability to compete effectively. Consider the startup’s competitive advantages, barriers to entry, and intellectual property protection.

Building a Startup Investment Portfolio

Diversification is key when building a startup investment portfolio. As a potential startup investor, investing in a range of startups across different industries and stages can help mitigate risks and maximize potential returns. Here are some crucial tips for building a startup investment portfolio. 

Set Investment Goals and Risk Appetite

Define your investment goals and risk appetite. Determine how much capital you are willing to allocate to startup investments and the level of risk you are comfortable with.

Research and Due Diligence

Conduct thorough research and due diligence on potential startups. Evaluate their business models, market potential, management team, and financial projections to make informed investment decisions.

Diversify Across Industries and Stages

Invest in startups across different industries and stages of development. This approach can help spread risk and capture opportunities in emerging sectors.

Consider Co-Investment Opportunities

Explore co-investment opportunities with other investors or syndicates. Co-investing allows you to leverage the expertise and networks of other investors while sharing the risks and rewards.

How to Identify The Best Startup Companies To Invest In

Investing into a business is no small joke. Identifying promising startups requires careful analysis and research. Here are some strategies to help you identify startups with potential.

Stay Informed and Network

Stay updated on industry trends and attend startup events and conferences. Networking with entrepreneurs, investors, and industry experts can provide valuable insights and connections.

Evaluate the Team

Assess the startup’s management team, their track record, and their ability to execute the business plan. Look for experienced founders with a deep understanding of the industry.

Review Traction and Milestones

Evaluate the business’ traction and milestones achieved to date. Look for evidence of customer adoption, revenue growth, partnerships, and product development progress before making an investment in the startup. 

Seek Recommendations and Expert Opinions

Seek recommendations from trusted professionals or experts in the startup ecosystem. Their insights and experience can help you identify promising startups and avoid potential pitfalls.

Due Diligence: Evaluating Startup Opportunities With Legal Considerations

Conducting thorough due diligence is crucial before making any startup investment. Here are some key areas to focus on during the due diligence process:

Financials and Projections

Review the startup’s financial statements, projections, and assumptions. Assess the reasonableness of revenue forecasts, cost projections, and profitability estimates.

Intellectual Property

Evaluate the startup’s intellectual property (IP) portfolio and any existing patents, trademarks, or copyrights. Assess the strength and potential value of the IP assets.

Market Validation and Customer Feedback

Seek feedback from customers, partners, or industry experts to validate the startup’s value proposition. Assess the market demand and user feedback to gauge product-market fit.

Legal and Regulatory Compliance

Review the startup’s legal and regulatory compliance, including licenses, permits, and any ongoing litigation or regulatory challenges. Ensure the startup operates within the boundaries of the law.

Investing in startups involves legal and regulatory considerations. It’s important to consult with legal and financial professionals to ensure compliance with relevant laws and regulations. Here are some key legal considerations:

Understand the securities laws and regulations that govern startup investments in your jurisdiction. Depending on the nature of the investment, you may need to comply with securities registration or exemption requirements.

In some jurisdictions, startups may only be able to accept investments from accredited investors who meet certain income or net worth thresholds. Verify your accreditation status before making any investments.

Seek legal advice when negotiating and drafting investment contracts and agreements. Ensure the terms and conditions protect your rights and interests as an investor.

Investing into a business can be a rewarding and potentially lucrative endeavor. However, it’s crucial to approach startup investments with careful consideration and due diligence. Remember to seek professional advice, stay informed, and continuously monitor and evaluate your startup investment portfolio for optimal results. Investing in startups is not without risks, but with the right approach and mindset, it can open doors to exciting opportunities and potential financial rewards. Start your journey in the startup investment world today and pave the way for future success.

The post How to Invest in Startups: A Comprehensive Guide for Success appeared first on Industry Leaders Magazine.

The Power of BookTok

BookTok has emerged as a platform where readers and authors can challenge the stratified nature of book promotion. Unlike traditional publishing, where marketing resources are primarily allocated to lead titles, BookTok allows anyone to propel a book to success through viral recommendations. Cecilia Beard, writing for Catapult, describes BookTok as a community that welcomes diverse authors and books, giving them a chance to shine. The platform’s simplicity and reach have proven to be staggering, as seen when a single TikTok mentioning a book led to its sold-out status on Amazon within 72 hours. This level of disruption challenges the notion that a massive marketing budget or a traditional publisher is necessary for a book to reach bestseller status.

The impact of TikTok on the book world extends beyond BookTok itself. Big-box bookstores have dedicated shelves to trending books, influenced by the platform’s recommendations. BookTokers have also engaged in paid partnerships with publishers to promote titles to their audiences. Even publishers have joined TikTok to market their books, although the platform’s discerning users quickly dismiss anything that appears inauthentic or corporate. While these efforts may seem clunky, they demonstrate the book world’s attempts to embrace and adapt to TikTok’s influence.

The Birth of 8th Note Press

On April 20, a subsidiary of ByteDance filed a trademark for 8th Note Press, a publishing company with a social media twist. The trademark filing covers various book formats and mentions downloadable software for connecting users to virtual communities. A job posting for an “Online Publishing Lead” hints at the power and promotional advantages that this outfit might wield. By utilizing their data strength and promotional capabilities, 8th Note Press aims to help writers find their target readers and make their books go viral both online and offline. This move by ByteDance signals a potential full-circle relationship between TikTok and the publishing industry.

The Threat to Traditional Publishers

While TikTok’s foray into publishing holds promise for authors and self-published works, it also poses a threat to traditional publishers. If the TikTok algorithm prioritizes videos featuring books from its sister company, it could hinder the organic virality of lesser-known titles. Moreover, the promotional advantages of 8th Note Press could give it an edge over traditional publishers when it comes to signing self-published authors with existing audiences. Traditional publishers are concerned that ByteDance could manipulate the scales in favor of its own projects, diminishing the chances for under-the-radar titles to gain attention and succeed.

The news of 8th Note Press comes at a time when the book publishing industry is grappling with declining sales, layoffs, and the closure of outlets that offer books coverage. In the first half of 2023, book sales were down compared to the previous year, and long-time editors from Penguin Random House accepted buyout packages while others faced layoffs. As social media becomes an increasingly vital avenue for readers to discover new titles, its reliability is also called into question. Twitter, a critical tool for writers to share their work and build their platforms, is losing users due to functionality issues and a perceived right-wing drift. These challenges further complicate the already difficult task of reaching readers.

While TikTok’s expansion into publishing may be seen as a threat to traditional publishers, it also risks diluting the authenticity and subversive potential that made BookTok so compelling. The platform’s initial allure lay in its ability to empower readers to champion the books they genuinely loved. However, with TikTok’s pivot towards profit, the grassroots thrill of discovery and the possibility of sleeper hits may be compromised. If the algorithm determines which books people see, the organic enthusiasm and passion-driven community of readers may be overshadowed by videos that feel forced and inauthentic.

The Randomness of Publishing

Publishing has always been a realm of uncertainty and randomness. Markus Dohle, the former CEO of Penguin Random House, once humorously remarked that everything in publishing is random. Success, bestsellers, and the fate of authors are all subject to chance. While this statement should be taken with a grain of salt, it highlights the reality that most authors do not earn back their advances. In this context, the potential return on investment offered by a viral TikTok recommendation becomes an enticing prospect. The chance for a self-published writer to reach a wide audience through BookTok or 8th Note Press might be an opportunity worth pursuing.

The emergence of TikTok and its subsequent influence on the book publishing industry has been both transformative and disruptive. BookTok has democratized book promotion, allowing diverse authors and lesser-known titles to gain recognition and success. However, TikTok’s expansion into publishing with 8th Note Press raises concerns about the impact on traditional publishers and the potential loss of authenticity in book recommendations. As social media platforms continue to evolve and book sales face challenges, the dynamics between TikTok, traditional publishers, and readers are at a critical juncture. The future of the book publishing industry hinges on striking a delicate balance between technological advancements and preserving the passion-driven community that has made books a cherished part of our culture.

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