Technology Roundup – Apple’s undervalued digital payments could top $2B, Alibaba purchasing up to 10% Dufry stake

Published on: October 5, 2020
Author: Amy Liu

Apple’s undervalued digital payments could top $2B in 2022, says Cowen bull

Cowen analyst Krish Sankar expects Apple’s (NASDAQ:AAPL) digital payments business to be the next multi-billion dollar business, topping $1B in revenue this year then “quickly” exceeding $2B by 2022.

Sankar cites Apple Card growth in the North American market with usage and penetration increasing during the pandemic.

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The analyst says the platform achieved “robust 100%+ Y/Y growth in recent years” and “could position Apple as an emerging contender in the fintech space.”

Cowen maintains an Outperform rating and $133 price target on Apple.

Apple shares are up 1.6% to $114.86.

The Apple Card, a joint project between Apple and Goldman Sachs, was first announced early last year before launching in August 2019.

Alibaba purchasing up to 10% Dufry stake, funding Hudson buy out

Alibaba (NYSE:BABA) will purchase up to a 9.99% stake in Swiss duty-free retailer Dufry, participating in a new $763M fundraising round.

Dufry and Alibaba will also form a joint venture combining the tech giant’s digital expertise with Dufry’s travel retail business.

The retailer is seeking funds after taking a major hit during the pandemic. Alibaba has increased its brick-and-mortar investments as a way to use its tech in physical locations.

PE firm Advent international will invest as much as $497M in Dufry.

Dufry will use the proceeds to buy out the rest of its Hudson (NYSE:HUD) unit for $311M to simplify the company’s corporate structure. The action will delist Hudson from the NYSE.

Uber CEO, Reuters detail costs of making drivers employees

Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) are spending a combined nearly $100M to back California’s Proposition 22, which would overturn AB5, which required gig workers to be classified as employees.

According to Reuters data concerning AB5, the ride-hailing companies would face $392M in annual payroll taxes and workers’ compensation costs even with drastic driver cuts.

Under Proposition 22, workers would receive some benefits like a minimum wage and healthcare subsidies but wouldn’t qualify for the complete benefits of full-time employees.

In a blog post, Uber CEO Dara Khosrowshahi says an analysis shows the company would have 260,000 available, full-time positions if drivers were classified as employees.

Adding part-time roles would only bring the total up to 280,000.

Before the pandemic, Uber had 1.2M U.S. drivers earning money on the platform.

Khosrowshahi: “At a moment when our nation’s economy remains fragile, denying work to nearly 1 million Americans would have far-reaching impacts on a recovery.”

Uber and Lyft have both threatened to exit the California market if AB5 remains in place.

Microsoft to invest $1B in data center venture in Greece

Microsoft (NASDAQ:MSFT) plans to build three data centers in greater Athens, Greece, providing investment of up to $1B.

The news follows nine months of negotiations between the Company and Greek Government for an agreement that also includes digital-skills training programs for 100,000 government and private sector workers as well as educators and students.

“This significant investment is a reflection of our confidence in the Greek economy, in the Greek people and the Greek government,” Microsoft President Brad Smith said at a ceremony held in the Acropolis Museum. “It’s not something we do often and it’s not something that we do lightly.”

Microsoft currently has data centers in 26 countries, including seven in the European Union.

Google delays in-app commissions in India until April 2022

Google (GOOG, GOOGL) has deferred taking its cut from in-app payments in India to the end of March, 2022.

Among other measures it’s performing in response to feedback, “we’re also extending the time for developers in India to integrate with the Play billing system, to ensure they have enough time to implement the UPI for subscription payment option that will be made available on Google Play.”

That comes after growing pushback from developers in India.

The payments policy isn’t new but is rather its global policy, Google says, adding that “more than 97% of developers with apps on Google Play already comply with the policy.”

It only applies if a developer charges users to download their app or they sell in-app digital items – which it notes applies to less than 3% of developers with apps in the store.