In an upbeat week for overall stocks, with the S&P 500 rising more than a percent, three stories in tech stood out:
- Facebook (NASDAQ:FB) stock rose to a new high when an one analyst gave his price target for the stock a significant boost.
- Amazon.com (NASDAQ:AMZN) shared important details on its upcoming Prime Day.
- Apple (NASDAQ:AAPL) Music overtook Spotify (NYSE:SPOT) when measured by U.S. subscribers.
Here's what investors should know about these key stories.
Facebook gets a $275 price target
After recently surpassing $200 for the first time, the social network hit another new high this week, after BTIG analyst Richard Greenfield raised his price target for the social network by $100, from $175 to $275. Several of the reasons for Greenfield's bullishness include an engaging ad product experience on Instagram with lots of room for growth in ad load on the app and better usage with younger generations on Facebook's core platform than is widely believed.
Recently surpassing 1 billion monthly active users, Instagram has morphed into a major business for Facebook. Within Instagram's Stories product, where the photo- and video-sharing app has 400 million daily active users, Facebook CEO Mark Zuckerberg noted in the company's most recent earnings call that the quality and business performance of ad products "are promising."
Facebook hasn't specified how much revenue Instagram is contributing to Facebook, but Facebook CFO David Wehner did say during the company's first-quarter earnings call that Instagram "continues to grow nicely ... both from an engagement perspective and a business perspective."
Here comes Amazon's Prime Day
Amazon has just pegged a date for its fourth annual Prime Day -- and investors may want to pay attention. After all, last year the company managed to generate more sales on Prime Day than any previous shopping day ever, including its Black Friday and Cyber Monday holidays. Featuring hundreds of thousands of deals, Prime Day sales soared 60% year over year in 2017. In addition, Amazon was able to use the self-made holiday to draw in a record number of new Prime members.
Scheduled to begin July 16, Amazon's Prime Day 2018 will almost undoubtedly crush last year's records. Taking full advantage of the shopping day's popularity, Prime Day 2018 will include 50% more Spotlight Deals and will be 36 hours long instead of the 30 hours allotted to Prime Day in 2017. Furthermore, capitalizing on the momentum Amazon is seeing with its Amazon-branded devices, the company says it will offer "the biggest deals yet on Alexa-enabled products like Echo, Fire TV and Fire tablets, in addition to new categories from home security to Echo devices with screens."
Apple Music's dominance in the United States
Though Spotify still easily has the upper hand on Apple Music globally, Apple's fast-growing streaming-music platform just overtook Spotify in the U.S., according to Digital Music News. Domestically, Apple now has "20 million plus" members while Spotify has closer to 20 million members, according to "confidential details shared with Digital Music News," wrote the music news website's Paul Resnikoff.
Globally, Spotify boasts 75 million paying subscribers and 170 million monthly active users as of the end of the company's first quarter. Meanwhile, as of the last updates on Apple Music's service, the company had garnered 50 million users when including paying subscribers and users on the company's free trial. Paying Apple Music subscribers recently hit 40 million.
Apple's services business, which includes revenue from Apple Music, is an important catalyst for the tech giant as the company tries to become more reliant on revenue beyond iPhone. In addition, given the segment's rapid growth recently, investors have high expectations for services. As Apple's second largest segment, services revenue in the company's second quarter of fiscal 2018 increased an impressive 31% year over year.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Sparks owns shares of Apple. The Motley Fool owns shares of and recommends Amazon, Apple, and Facebook. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.