Forrest Li, chief executive officer of Sea Ltd., in Singapore, on Wednesday, May 3, 2023.
Ore Huiying | Bloomberg | Getty Images
Shares of Southeast Asian tech giant Sea plummeted this week after missing revenue expectations and saying it would focus on growth over profits — a reversal from recent cost-cutting measures in the face of economic uncertainty. But analysts said the pivot is a move to defend market share.
On Tuesday, the company reported revenue that missed analyst expectations, coming in at $3.1 billion versus the $3.2 billion expected, according to a Refinitiv consensus estimate.
While Forrest Li, Sea’s chairman and group CEO, said the company has “achieved self-sufficiency” and is “now on firmer footing,” he said Sea will now “reaccelerate investments in growth.”
The stock plunged after Tuesday’s earnings report, ending the session 28% lower.
Just last year, Sea overhauled its business to focus on profitability amid high inflation and interest rates. At the same time, investors were pressuring tech firms to move toward profitability. Other regional tech giants like GoTo and Grab slashed costs by conducting mass layoffs and reducing customer incentives.
Sea’s top management gave up their salaries, while the company froze salaries for most employees and paid out lower bonuses. Local media reported the company laid off more than 7,000 employees in six months.
Defending your market share is the right strategy in e-commerce. You don’t want to give a foot in the door to the new player. That’s what we think Sea’s doing.
Sachin Mittal
Head of telecom, media and technology researh, DBS Bank
As a result, Sea posted positive net income for the first time in the fourth quarter of 2022 and that figure has remained in the black since. Before that, Sea was largely unprofitable, amassing billions of dollars in losses since its inception.
“The good news for them is that they have built up sort of a buffer to increase some of its spending, with all of its segments now profitable,” said Woo.
Boosting e-commerce
In particular, Li said the company has “started, and will continue, to ramp up our investments in growing the e-commerce business across our markets.” JPMorgan said those investments could take the form of expensive shipping subsidies and discount vouchers.
“Given the weakening macro environment and increasing competition from Lazada and TikTok Shop, Sea probably did not have much of a choice but to start spending to at least maintain its market share in the region,” said Jonathan Woo, senior research analyst at Phillip Securities Research.
Sea’s decision to accelerate ecommerce investments in growth is likely to materially weigh on its earnings and share price in the near-term.
JPMorgan
Head of telecom, media and technology research, DBS Bank
Shopee remains the market leader in the region, with a gross merchandise volume of $47.9 billion in 2022, according to a report from Momentum Works. Lazada’s GMV came in at $20.1 billion in the same year.
“In our view, the pivot could be driven by competition along with Sea positioning itself for an increase in consumer spend, and to grow live-streaming and in-house logistics,” said JPMorgan analysts.
Right strategy?
But Sea’s decision to ramp up investments is likely to impact earnings, said JPMorgan. The bank downgraded Sea’s rating from “overweight” to “neutral” with a price target of $40.50, representing 2.56% upside from the stock’s Thursday close of $39.49.
“Sea’s decision to accelerate ecommerce investments in growth is likely to materially weigh on its earnings and share price in the near-term,” said JPMorgan.
“Sea could potentially incur heavy investments in second half of 2023 (a busy campaign period) resulting in earnings decline in second half.”
Sachin Mittal, head of telecom, media and technology research at DBS Bank, is bullish on Sea. The firm has a price target of $90 for Sea, representing roughly 160.9% upside.
“Defending your market share is the right strategy in e-commerce. You don’t want to give a foot in the door to the new player. That’s what we think Sea’s doing,” said Mittal.
But TikTok Shop is “not such a large threat” to Shopee, he said.
“TikTok doesn’t have in-house logistics. They use third-party players to provide e-commerce packages,” Mittal said on CNBC’s “Squawk Box Asia” on Wednesday. Unlike TikTok Shop, Shopee and Lazada have their own logistics networks of warehouses and fulfilment centers around the world.
“This is one of the ways to compete with TikTok. TikTok is still very small. It’s not such a large threat,” said Mittal. TikTok Shop’s current GMV is only a fraction of Shopee and Lazada’s.
— CNBC’s Michael Bloom contributed to this report.
Neptune and OpenAI have collaborated on a metrics dashboard to help teams that are building foundation models. The companies will work “even more closely together” because of the acquisition, Neptune CEO Piotr Niedźwiedź said in a blog.
The startup will wind down its external services in the coming months, Niedźwiedź said. The terms of the acquisition were not disclosed.
“Neptune has built a fast, precise system that allows researchers to analyze complex training workflows,” OpenAI’s Chief Scientist Jakub Pachocki said in a statement. “We plan to iterate with them to integrate their tools deep into our training stack to expand our visibility into how models learn.”
OpenAI has acquired several companies this year.
It purchased a small interface startup called Software Applications Incorporated for an undisclosed sum in October, product development startup Statsig for $1.1 billion in September and Jony Ive’s AI devices startup io for more than $6 billion in May.
Neptune had raised more than $18 million in funding from investors including Almaz Capital and TDJ Pitango Ventures, according to its website. Neptune’s deal with OpenAI is still subject to customary closing conditions.
“I am truly grateful to our customers, investors, co-founders, and colleagues who have made this journey possible,” Niedźwiedź said. “It was the ride of a lifetime already, yet still I believe this is only the beginning.”
A person walks by a sign for Micron Technology headquarters in San Jose, California, on June 25, 2025.
Justin Sullivan | Getty Images
Micron said on Wednesday that it plans to stop selling memory to consumers to focus on meeting demand for high-powered artificial intelligence chips.
“The AI-driven growth in the data center has led to a surge in demand for memory and storage,” Sumit Sadana, Micron business chief, said in a statement. “Micron has made the difficult decision to exit the Crucial consumer business in order to improve supply and support for our larger, strategic customers in faster-growing segments.”
Micron’s announcement is the latest sign that the AI infrastructure boom is creating shortages for inputs like memory as a handful of companies commit to spend hundreds of billions in the next few years to build massive data centers. Memory, which is used by computers to store data for short periods of time, is facing a global shortage.
Micron shares are up about 175% this year, though they slipped 3% on Wednesday to $232.25.
AI chips, like the GPUs made by Nvidia and AdvancedMicro Devices, use large amounts of the most advanced memory. For example, the current-generation Nvidia GB200 chip has 192GB of memory per graphics processor. Google’s latest AI chip, the Ironwood TPU, needs 192GB of high-bandwidth memory.
Memory is also used in phones and computers, but with lower specs, and much lower quantities — many laptops only come with 16GB of memory. Micron’s Crucial brand sold memory on sticks that tinkerers could use to build their own PCs or upgrade their laptops. Crucial also sold solid-state hard drives.
Micron competes against SK Hynix and Samsung in the market for high-bandwidth memory, but it’s the only U.S.-based memory supplier. Analysts have said that SK Hynix is Nvidia’s primary memory supplier.
Micron supplies AMD, which says its AI chips use more memory than others, providing them a performance advantage for running AI. AMD’s current AI chip, the MI350, comes with 288GB of high-bandwidth memory.
Micron’s Crucial business was not broken out in company earnings. However, its cloud memory business unit showed 213% year-over-year growth in the most recent quarter.
Analysts at Goldman on Tuesday raised their price target on Micron’s stock to $205 from $180, though they maintained their hold recommendation. The analysts wrote in a note to clients that due to “continued pricing momentum” in memory, they “expect healthy upside to Street estimates” when Micron reports quarterly results in two weeks.
A Micron spokesperson declined to comment on whether the move would result in layoffs.
“Micron intends to reduce impact on team members due to this business decision through redeployment opportunities into existing open positions within the company,” the company said in its release.
Microsoft pushed back on a report Wednesday that the company lowered growth targets for artificial intelligence software sales after many of its salespeople missed those goals in the last fiscal year.
The company’s stock sank more than 2% on The Information report.
A Microsoft spokesperson said the company has not lowered sales quotas or targets for its salespeople.
The sales lag occurred for Microsoft’s Foundry product, an Azure enterprise platform where companies can build and manage AI agents, according to The Information, which cited two salespeople in Azure’s cloud unit.
AI agents can carry out a series of actions for a user or organization autonomously.
Less than a fifth of salespeople in one U.S. Azure unit met the Foundry sales growth target of 50%, according to The Information.
In another unit, the quota was set to double Foundry sales, The Information reported. The quota was dropped to 50% after most salespeople didn’t meet it.
In a statement, the company said the news outlet inaccurately combined the concepts of growth and quotas.
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“Aggregate sales quotas for AI products have not been lowered, as we informed them prior to publication,” a Microsoft Spokesperson said.
The AI boom has presented opportunities for businesses to add efficiencies and streamline tasks, with the companies that build these agents touting the power of the tools to take on work and allow workers to do more.
OpenAI, Google, Anthropic, Salesforce, Amazon and others all have their own tools to create and manage these AI assistants.
But the adoption of these tools by traditional businesses hasn’t seen the same surge as other parts of the AI ecosystem.
The Information noted AI adoption struggles at private equity firm Carlyle last year, in which the tools wouldn’t reliably connect data from other places. The company later reduced how much it spent on the tools.