Google Cloud 'Capacity Constrained' Like Microsoft Azure. Good News For Amazon?

 In a positive sign for Amazon.com's (AMZN) cloud computing business, Google-parent Alphabet (GOOGL) has joined Microsoft (MSFT) in pointing to a shortage in data center capacity as customers ramp up artificial intelligence workloads. Google stock fell on Wednesday with Amazon earnings due after the market close.

Further, Google said fourth quarter cloud-computing revenue rose 30% to $11.95 billion, missing estimates of $12.19 billion. Amazon is by far the biggest provider of cloud computing services. One view has been that Microsoft and Google could pick up market share amid the rise of generative artificial intelligence. But that may not be happening.

We acknowledge (Google) cloud needing more capacity could have AI workload market share implications," said Justin Patterson, analyst at KeyBanc Capital markets, in a report.

Data centers are packed with computer servers that process AI workloads.

Google Stock: Capital Spending Booms In 2025

When Microsoft reported fiscal second quarter earnings on Jan. 29, the company said its Azure cloud computing business continues to be capacity constrained, slowing revenue growth.

Alphabet forecast capital spending of $75 billion in 2025, up about 43% from last year, above views. Wall Street had projected about $59 billion in 2025 capital spending for Google stock.

Meanwhile, Microsoft is aiming to spend $80 billion on AI infrastructure in fiscal 2025.

On Alphabet's earnings call with Wall Street analysts, the company said 4.4 million software developers now using Google's Gemini AI training model, double the number from six months ago.

But  management said Google ended 2024 with "more (AI) demand than capacity."

Lumpy Cloud Computing Growth?

At Susquehanna, analyst Shyam Patil said in a report: "Cloud revenue of $12 billion grew 30% year over year, decelerating five points quarter over quarter. Google expects that cloud revenue growth rate could vary from quarter to quarter due to the timing of when capacity goes live."

On the stock market today, Google stock fell more than 8% to near 188.70. Amazon stock retreated more than 2% to near 236.23. Microsoft stock dipped a fraction to near 411.

Amid the emergence of Chinese startup DeepSeek, huge increases in capital spending by tech companies are under more scrutiny.

Microsoft is the biggest investor in generative AI leader OpenAI, having spent some $14 billion on the startup. But Oracle (ORCL) will now be a big provider of data center capacity to OpenAI for training AI models.

Amazon has invested $8 billion in Anthropic, a rival of OpenAI. Much of Amazon's AI-related cloud demand comes from Meta Platforms (META), however.

Meta has developed its Llama family of open-source AI models.

https://www.investors.com/news/technology/google-stock-amazon-microsoft-cloud-data-center-capacity/

Bio-Techne (NASDAQ:TECH) Surprises With Strong Q4

 

Bio-Techne (TECH) Q4 CY2024 Highlights:

• Revenue: $297 million vs analyst estimates of $285.1 million (9% year-on-year growth, 4.2% beat)

• Adjusted EPS: $0.42 vs analyst estimates of $0.38 (9.3% beat)

• Adjusted EBITDA: $96.11 million vs analyst estimates of $87.93 million (32.4% margin, 9.3% beat)

• Operating Margin: 16%, up from 13.9% in the same quarter last year

• Free Cash Flow Margin: 26.1%, up from 25% in the same quarter last year

• Organic Revenue rose 9% year on year (-1.9% in the same quarter last year)

• Market Capitalization: $11.53 billion

"The Bio-Techne team once again executed at a high level and delivered strong second quarter results," said Kim Kelderman, President and Chief Executive Officer of Bio-Techne.

https://finance.yahoo.com/news/bio-techne-nasdaq-tech-surprises-114147351.html

Kenvue Has Director Nominees from Starboard Value

 Kenvue Inc. (NYSE: KVUE) (“Kenvue”), the world’s largest pure-play consumer health company by revenue, today issued the following statement in response to Starboard Value’s (“Starboard”) submission of four nominees to stand for election to the Kenvue Board of Directors at Kenvue’s 2025 Annual Meeting of Shareholders:

The Kenvue Board and management team are committed to acting in the best interests of Kenvue and our shareholders. We engage regularly with our shareholders and are open to constructive dialogue with and suggestions from Kenvue shareholders. We note that members of Kenvue’s Board of Directors and management team have held several discussions with Starboard.

We are working across our business to unleash the full potential of Kenvue’s portfolio, powered by increased marketing investments driven by our cost savings and productivity initiatives. Kenvue is a global leader in consumer health with strong brands, capabilities and teams that we believe will enable us to drive sustainable profitable growth and enhance shareholder value.

Kenvue’s Board recognizes the importance of ensuring the right combination of skills and experience, as well as independent director oversight, and regularly evaluates its composition. We recently appointed two new independent directors with the resignation of two Johnson & Johnson executives from the Board. Kenvue’s Board today is composed of 11 highly qualified directors who have held executive leadership roles and board positions, including at world-class consumer, retail and healthcare companies. Each director brings expertise in areas that are highly relevant to the execution of the Company’s strategic priorities, including strategy, brand-building and marketing, e-commerce, corporate finance, and business development.

Kenvue’s Board has been reviewing Starboard’s proposed director candidates and will present its formal recommendation in due course.

https://www.businesswire.com/news/home/20250205461417/en/

Boston Scientific reports above-consensus Q4 results, outlook

 Boston Scientific (NYSE:BSX) reported fiscal Q4 2024 results that surpassed analyst expectations.

The company's shares swung between gains and losses in premarket trading Wednesday.

The company reported earnings per share (EPS) of $0.70, topping analyst expectations of $0.66. Revenue for the period came in at $4.56 billion, also exceeding the consensus estimate of $4.41 billion.

"2024 was one of the best years in the history of Boston Scientific, fueled by our innovative portfolio, the launch of our FARAPULSE Pulsed Field Ablation System as well as significant clinical achievements and commercial excellence across businesses and regions," said Mike Mahoney, chairman and CEO of Boston Scientific.

"We have a strong foundation for growth, and I am incredibly grateful for our talented global team and the opportunity to continue transforming the lives of millions of patients around the world."

For the first quarter, the company expects adjusted EPS between $0.66 and $0.68, in line with the consensus estimate of $0.66. Net sales on a reported basis are projected to grow between 17% and 19% and approximately 14% to 16% on an organic basis.

For the full year 2025, Boston Scientific forecasts EPS in the range of $2.80 to $2.87, compared to the consensus estimate of $2.81.

https://finance.yahoo.com/news/boston-scientific-reports-above-consensus-122422780.html

Cencora ups guidance

 Revenue of $81.5 billion for the First Quarter, a 12.8 Percent Increase Year-Over-Year

First Quarter GAAP Diluted EPS of $2.50 and Adjusted Diluted EPS of $3.73

Adjusted Diluted EPS Guidance Range Raised to $15.25 to $15.55 for Fiscal 2025

https://www.businesswire.com/news/home/20250205846137/en/

DOGE sets sights on Medicaid: NYT

 President Donald Trump's Department of Government Efficiency, led by Elon Musk, aims to reduce federal spending by $1 trillion, with Medicaid emerging as a likely target, The New York Times reported Feb. 3. 

Mr. Musk's DOGE team has requested access to CMS systems, which manage more than $1 trillion in annual payments, according to documents obtained by the Times. This effort, led by Mr. Musk's longtime associate Steve Davis, aligns with a broader push to reduce federal spending by scrutinizing payments and contracts.

Hospital and health system leaders are closely monitoring potential changes to Medicaid funding, citing concerns about financial stability and patient access.

"This is the most vulnerable population impacted by these federal programs, and in Washington state, there has not been a rate increase to Medicaid reimbursement for 22 years until last year when the [Supplemental Nutrition Assistance Program] was enacted," Mary Beth Formby, CFO of Renton, Wash.-based Providence's North Division Puget Sound and Alaska Regions, told Becker's. "There is a lot of uncertainty and confusion that has been stirred up, so there's definitely a lot of concern in this space."

Mr. Musk's cost-cutting philosophy — previously applied at Tesla, SpaceX and X — now extends to federal spending, with a particular focus on eliminating what he claims are "fraudulent payments," according to the report. 

The federal deficit in fiscal 2024 was $1.8 trillion, with $236 billion in improper payments in fiscal 2023, according to a recent report published by the Government Accountability Office. The $236 billion in improper payments was down about $11 billion from the previous fiscal year.

Beyond CMS, DOGE has gained access to the Treasury Department's payment systems, potentially enabling greater influence over federal disbursements.

The implications for healthcare providers are significant. If DOGE imposes abrupt funding changes, hospitals and health systems reliant on Medicaid reimbursements could face financial instability. As the administration pushes forward, hospital executives must prepare for potential policy shifts that may affect payment structures, contract negotiations and long-term financial planning.

While the Trump administration said it will not cut Social Security and Medicare, Medicaid and Affordable Care Act subsidies remain vulnerable, potentially leading to higher uninsured rates and increased financial pressure on hospitals, according to a Jan. 22 report published by TD Economics. 

Republican lawmakers have previously proposed per-capita spending caps or block grants, which would limit federal Medicaid funding and shift more costs to states over time. The Congressional Budget Office estimated that such changes could reduce federal Medicaid spending by $900 billion over the next decade, forcing states to cut eligibility, reduce benefits or raise taxes.

Other potential Medicaid changes could include:

• Stricter enrollment and renewal requirements, making it harder for eligible individuals to maintain coverage.
• Elimination of provider taxes, which many states use to help finance Medicaid.
• Potential work requirements, which could lead to coverage losses among low-income adults.

The enhanced ACA premium tax credits, which significantly expanded coverage since 2021, will expire at the end of 2025 unless Congress acts, according to the TD Economics report. If they lapse, premium costs will rise across all states, with increases ranging from $360 to $1,860 a year per enrollee.

While Medicaid is likely a primary focus, DOGE is also expected to propose reductions in federal hiring and nondefense discretionary spending. However, these cuts may not meaningfully reduce the deficit. Hospitals and health systems should prepare for regulatory shifts that could reduce federal reimbursements and increase the financial burden on states.

Major overhauls to Medicaid would require congressional approval, which remains uncertain given the Republicans' slim House majority. With federal discretionary spending already low by historical standards, Medicaid and ACA-related programs are likely to face the most significant cuts under the new administration's cost-saving agenda.

https://www.beckershospitalreview.com/finance/doge-sets-sights-on-medicaid-new-york-times.html

Big Deportation Raids Begin In Tren De Aragua-Infested Aurora, Colorado

 The ATF's Denver division announced on X that its agents and Department of Justice partners are assisting Homeland Security and other federal law enforcement agencies in citywide "immigration enforcement efforts" today. The metro area is controlled by far-left globalist lawmakers who pushed sanctuary city policies and, in return, flooded some areas, such as Aurora, with members of the violent and heavily armed Venezuelan gang Tren de Aragua.

ATF, along with our Department of Justice partners, is assisting Department of Homeland Security and other federal law enforcement partners with their immigration enforcement efforts today in the Denver metro area. pic.twitter.com/ceH8upG1Xn

— ATF Denver (@ATF_Denver) February 5, 2025

The DEA's Rocky Mountain Division posted a video on X, showing agents using flash bangs at an apartment complex where suspected migrant gang members resided. 

💥 #DEA RMFD serving a search warrant in support of @DHSgov operations taking place throughout the metro area this morning. pic.twitter.com/vzUefuvPfd

— DEARockyMountain (@DEAROCKYMTNDiv) February 5, 2025

Local media outlet 9NEWS' Chris Vanderveen wrote on X, "Multiple federal operations taking place in Denver/Aurora this morning."

Multiple federal operations taking place in Denver/Aurora this morning.

FBI/DEA/ICE taking part

Photo: @jennifermeckles pic.twitter.com/iS6o99N7jQ

— Chris Vanderveen (yep…me) (@chrisvanderveen) February 5, 2025

Another local area journalist reported: "A pretty big police presence in Aurora this morning."

#Breaking: A pretty big police presence in Aurora this morning. This is at the intersection of Oneida and Leetsdale. We are definitely seeing a lot of law-enforcement, FBI and ICE. I have talked to several people and I am continuing to work to get more info. @CBSNewsColorado pic.twitter.com/yMJoc4Kfyp

— Brian Sherrod (@briansherrodtv) February 5, 2025

More color about the immigration raids via 9NEWS:

Colorado Rapid Response Network, a nonprofit that assists immigrants, said it had confirmed operations were underway at those two locations and said ICE was involved.

The operation is the third by federal agents since President Donald Trump's inauguration. ICE has conducted operations in cities including Chicago and New York, targeting the arrests of immigrants without proper documentation.

Last week, the agency temporarily called off the Aurora operation due to media leaks, according to NBC News. A source told NBC that the leaks posed an operational security risk for officers.

The raids were expected to be carried out by ICE; U.S. Marshals; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI and other federal agencies, NBC reported.

Last week, the City of Aurora released a statement saying the city and the Aurora Police Department were aware of media reports about federal immigration enforcement plans.

President Trump's campaign pledge to arrest violent, illegal alien gang members in Aurora, following multiple incidents of apartment complex takeovers last year, is finally materializing.

The more significant threat was revealed in a leaked US Army North Division memo by investigative reporter James O'Keefe in September, stating there are thousands of heavily armed Venezuelan gang members in the US that came through the Biden-Harris regime's open southern borders. 

At the start of the week, a US Air Force spy plane conducted a SIGINT operation over the southern half of Baja California, a region home to heavily armed Tijuana Cartel and Sinaloa Cartel members. This might indicate US operations against cartels are nearing. 

https://www.zerohedge.com/political/big-deportation-raids-begin-tren-de-aragua-infested-aurora-colorado