Google CEO Sundar Pichai (L) and Apple CEO Tim Cook (R) listen as U.S. President Joe Biden speaks during a roundtable with American and Indian business leaders in the East Room of the White House in Washington, D.C., on June 23, 2023.
Anna Moneymaker | Getty Images
U.S. Senator Ron Wyden warned that foreign governments are spying on smartphone users by compelling Apple and Google to turn over push notification records, according to a letter he sent to Attorney General Merrick Garland Wednesday.
Wyden, D-Ore., said his office investigated a tip from last year alleging that government agencies have been “demanding” these records from both companies. Since push notifications like news alerts, emails, and social media alerts travel through Apple and Google’s servers, they can reveal unique insights about how individual people use particular apps, Wyden explained in the letter.
Governments can force Apple and Google to hand over these records, just like they can be compelled to share any other information they have regarding their users, according to the letter. In the U.S., however, Wyden said information about push notification records cannot be released to the public.
“Apple and Google should be permitted to be transparent about the legal demands they receive, particularly from foreign governments, just as the companies regularly notify users about other types of government demands for data,” Wyden wrote. “I would ask that the DOJ repeal or modify any policies that impede this transparency.”
Push notification records can reveal which app received a notification, when it was received, the phone and Apple or Google account that the notification was delivered to, and in some cases, the unencrypted text displayed in the notification, according to the letter.
Wyden did not specify which governments have asked Apple and Google for push notification records. The senator’s office did not immediately respond to CNBC’s request for comment.
A source confirmed to Reuters that foreign government agencies, as well as U.S. government agencies, have asked both Google and Apple for information from push notifications. For instance, the agencies have asked for metadata that can help connect anonymous users on messaging apps to specific Apple and Google accounts, according to the report.
“In this case, the federal government prohibited us from sharing any information,” an Apple spokesperson said. “Now that this method has become public we are updating our transparency reporting to detail these kinds of requests.”
A Google spokesperson said the company shares Wyden’s commitment to keeping people informed about requests for push notification records.
“We were the first major company to publish a public transparency report sharing the number and types of government requests for user data we receive, including the requests referred to by Senator Wyden,” the spokesperson said in a statement. The company did not clarify where it publishes requests for information about push notification records, or if it is restricted.
The Department of Justice did not immediately respond to requests for comment.
Lisa Su, chair and CEO of Advanced Micro Devices Inc., during the AMD Advancing AI event in San Jose, California, on Dec. 6, 2023.
David Paul Morris | Bloomberg | Getty Images
Advanced Micro Devices shares fell 7% on Wednesday after the chipmaker under-delivered on Wall Street’s estimates for its important data center business.
Shares traded at a 52-week low and were on pace for their worst session since October.
AMD reported better-than-expected results on the top and bottom lines, but it also reported data center sales of $3.86 billion. That reflected 69% growth from a year ago but fell short of the $4.14 billion in sales expected by analysts polled by LSEG.
The key unit, responsible for selling advanced chips for data centers, has benefited in recent years from growing demand for its graphics processing units, as megacap technology companies race to develop advanced artificial intelligence tools.
Data center revenue grew 94% for the full year to $12.6 billion, with $5 billion of those sales stemming from AMD’s AI-focused Instinct GPUs. The company is the second-largest producer for gaming after Nvidia, which has triumphed as the market leader in AI chips and ballooned in value to a nearly $3 trillion market value.
“We believe this places AMD on a steep long-term growth trajectory, led by the rapid scaling of our data center AI franchise from more than $5 billion of revenue in 2024 to tens of billions of dollars of annual revenue over the coming years,” AMD CEO Lisa Su said on the earnings call with analysts.
Several Wall Street firms trimmed their price targets on shares amid the disappointing data center results and expectations for a weak first half. Citi downgraded shares to neutral from a buy rating, while JPMorgan its target to $130 from $180. Bank of America’s Vivek Arya said the company has yet to “articulate how it can carve an important niche” relative to Nvidia.
Morgan Stanley highlighted AI expectations as the most significant pressure point, saying that “visibility likely needs to improve for the stock to find its footing.”
CEO of Alphabet and Google Sundar Pichai in Warsaw, Poland on March 29, 2022.
Mateusz Wlodarczyk | Nurphoto | Getty Images
Alphabet shares dropped more than 7% on Wednesday after the search giant fell short of Wall Street’s fourth-quarter revenue expectations and announced big spending plans for its ongoing artificial intelligence buildout.
The stock headed for its worst session in more than a year.
The company topped earnings estimates by 2 cents per share. Revenue came in at $96.47 billion, behind the $96.56 billion expected by LSEG. Alphabet’s revenue grew 12% overall from a year ago, while its YouTube advertising business, search business and services segment slowed year over year.
Alphabet also said it plans to spend $75 billion on capital expenditures as it builds out its AI offerings and races against megacap rivals to build out data centers and new infrastructure. The figure was much higher than the $58.84 billion expected by Wall Street analysts, according to FactSet.
Finance chief Anat Ashkenazi said the higher expenses will help “support the growth of our business across Google Services, Google Cloud and Google DeepMind.” She also said the spending will go toward “technical infrastructure, primarily for servers, followed by data centers and networking.”
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The company expects capital expenditures to range between $16 billion and $18 billion. That was higher than the $14.3 billion estimate from FactSet.
JPMorgan analyst Doug Anmuth highlighted costs, capex and cloud revenue as the “culprits” for the stock’s post-earnings performance. Bernstein’s Mark Shmulik also noted that this is the third quarter that the stock move connects to Google’s cloud segment.
“If digital ad growth is akin to a long drive competition, then Google would be sitting comfortably here with strong Search and YouTube bombs down the fairway,” Shmulik said.
“But as the game shifts to the AI putting green, there’s little room for error with a slight cloud miss, a whopping CAPEX guide up to $75B for 2025, and lack of actionable operating leverage commentary leaves Google 3- putting for bogey,” he added.
Teladoc Health on Wednesday announced it will acquire the preventative care company Catapult Health in an all-cash deal for $65 million.
Catapult offers an at-home wellness exam that allows members to check their blood pressure, collect a blood sample, log other screening information and meet virtually with a nurse practitioner. Teladoc, a virtual care platform, said the acquisition will help it improve its ability to detect health conditions early.
The company said Catapult will operate within its integrated care segment after the deal closes. At JPMorgan’s health-care conferencein January, Teladoc said it is actively working to grow membership and use of services within its integrated care segment.
“Catapult Health’s capabilities will help advance our strategy in meaningful ways — from giving more members access to convenient and impactful wellness and preventative care, to unlocking greater value for our customers,” Teladoc CEO Chuck Divita said in a statement.
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Catapult generated around $30 million in trailing twelve-month revenue as of the third quarter of 2024, Teladoc said. The deal is expected to close in the first quarter of this year.
Teladoc’s acquisition of Catapult comes after a tumultuous period for the company. When Teladoc acquired Livongo in 2020, the companies had a combined enterprise value of $37 billion. The stock has tumbled since then, and Teladoc’s market cap now sits under $2 billion.
In April, Teladoc announced the sudden departure of Jason Gorevic, who joined as CEO in 2009 and steered the company through the Livongo deal and the Covid-19 pandemic. Divita took over as chief executive in June and pledged to position the company for “long-term, sustainable success.”
