By Louis Juricic and Sarina Isaacs
Investing.com -- Here is your weekly Pro Recap on the biggest headlines out of a big earnings week for tech: reactions to Apple's Vision Pro launch; the SEC's lawsuit against Coinbase; GM's collaboration with Tesla; Amazon Prime's coming ad-supported tier; and Netflix's win on password-sharing crackdown.
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A lackluster response to Apple's Vision Pro
Wall Street reacted with caution to Apple's (NASDAQ:AAPL) launch of its much-anticipated mixed reality headset, Vision Pro, which comes at a higher-than-expected price of $3,499.
CFRA, for example, said
Although we are impressed by its best-in-class hardware/immersive capabilities, we think AAPL failed to identify why it's a must-own device for consumers, at least for now. Still, the company's entry into the space and greater engagement from developers will help support adoption and new use cases over time.
Goldman Sachs said it is encouraged by long-term growth prospects, "but expect near-term financial contributions to be limited" particularly given the high retail price point and media reports that it may be sold at breakeven.
And BofA similarly said it expects that "adoption will take time."
Apple shares initially sank on news of the launch but partially recovered, and ended the week down just 0.9%. The stock is up some 45% year to date.
Coinbase sued by SEC
Cryptocurrency exchange Coinbase (NASDAQ:COIN) took a dive early in the week after it was sued by the Securities and Exchange Commission (SEC) for an alleged breach of U.S. securities rules.
“We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions,” said SEC Chair Gary Gensler in a press release.
The exchange is accused of making billions of dollars “unlawfully facilitating the buying and selling of crypto asset securities.”
BofA reiterated its Underperform rating on the stock and said, "[W]e think these latest developments illustrate ongoing regulatory headwinds, which not only could threaten part of [Coinbase]’s business model, but also represent a big management distraction."
Meanwhile, Cathie Wood’s Ark Invest increased its stake in the company, as the stock hit near five-month lows. Wood has repeatedly expressed confidence in Coinbase and the broader crypto industry, and has cited a $1 million long-term price target for Bitcoin on the belief that it is an effective inflation hedge.
Coinbase shares fell nearly 16% for the week, having lost ground Monday as well after the SEC sued Binance. It's still up nearly 60% for the year.
General Motors to partake in Tesla's charging network
General Motors (NYSE:GM) CEO Mary Barra confirmed this week that the company is preparing to integrate the North American Charging Standard (NACS) connector, designed by Tesla (NASDAQ:TSLA), into its EVs beginning in 2025.
The announcement, made during a live meeting on Twitter Space with Tesla CEO Elon Musk, mirrors a similar revolution made late last month when neighboring rival Ford Motor (NYSE:F) also announced a collaboration with Musk's Tesla.
These partnerships allow Ford and GM customers to access the extensive network of Tesla Superchargers.
The next day, White House officials handed Tesla another win when they announced that the company’s Superchargers would be eligible to receive a portion of federal funds, amounting in the billions, so long as the chargers also included CCS connections.
After the GM news, Wedbush raised its price target on Tesla to $300 from $215, reiterated its "Outperform" rating, and added the shares to the "Wedbush Best Ideas List."
GM climbed more than 5% for the week to $36.23. Tesla was up 4% to $244.40, extending an over 117% gain year to date.
Amazon to launch ad-supported Prime Video tier: report
Amazon (NASDAQ:AMZN) plans to launch an advertising-supported tier of its Prime Video streaming services as part of a move to bolster growth from entertainment, the Wall Street Journal reported Wednesday, citing unnamed sources.
Plans to launch an ad-supported tier for its Prime Video streaming service follow similar moves by rivals including Netflix (NASDAQ:NFLX) and Disney (NYSE:DIS) as streaming platforms look for ways to support content spending amid an ongoing battle for dominance.
Warner Bros Discovery (NASDAQ:WBD) and Paramount (NASDAQ:PARAA), meanwhile, are reportedly in talks with Amazon to add the ad-based tiers of their streaming services through Amazon’s Prime Video channels.
Bank of America analysts believe the ad-supported tier makes sense for Prime Video.
"Amazon’s user data, existing relationships with retail advertisers, and extensive ad sales teams provide a competitive advantage for monetizing ad-streaming. Also, tiering may enable Amazon to raise fees on ad-free Prime tiers, which would follow recent fee increases for various Prime and 3P services," it wrote in a client note.
The analysts also expect Amazon to continue to lean into video content vs. pulling back in a bid to drive usage.
Warner Discovery and Paramount closed the week up 18% and 5%, respectively, following the news. Amazon ended nearly breakeven for the week.
Netflix scoops up new subscribers amid password-sharing crackdown
Netflix climbed after The Wall Street Journal reported that the crackdown on password sharing in the U.S. delivered a new subscriber windfall in its earliest days.
Citing data from Antenna, the WSJ said the streaming giant gained more new U.S. subscriptions between May 25 and May 28, not long after it notified users in the U.S. and other countries of the limits than in any other four-day period since Antenna commenced compiling the data in 2019.
The jump in subscribers suggests Netflix’s decision to end password sharing is yielding results.
The move to end password sharing means users who share an account outside the same home must pay an extra $7.99 a month to watch. In addition, the number of extra members customers could add to their account is limited, depending on the tier they pay for.
Shares rose just under 5% for the week, with year-to-date gains totaling over 40%.
Senad Karaahmetovic, Sam Boughedda, Ambar Warrick, and Michael Elkins contributed to this report.
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