Day: September 1, 2024

The key to successful investing lies in choosing the right stocks, though achieving this is no small feat.

Investors employ a wide array of strategies to select stocks – some trust their instincts, others analyze past performance, and many lean on expert advice. For those seeking a more impartial and data-driven approach, TipRanks’ Smart Score offers an ideal solution. This advanced algorithm leverages AI and natural language processing to sift through vast amounts of data from public trading floors, providing a clear and objective guide for investors.

That data is a treasure trove of stock information, based on the aggregated trades of thousands of investors across thousands of stocks, with tens of millions of transactions every day. It would be the work of several lifetimes to sort and understand it – but the Smart Score automates that, and uses the data to give every stock a simple rating, on a score of 1 to 10, based on a group of factors that are proven to line up with future outperformance. A stock with a ‘Perfect 10’ score deserves a closer look and deeper consideration.

When the Smart Score aligns with Wall Street analyst recommendations, it signals a strong, bullish opportunity for investors. With this in mind, we’ve used the TipRanks platform to explore what analysts think of two top-scoring ‘Perfect 10’ stocks. Here’s a closer look at these stocks and the analyst insights.

PowerFleet (AIOT)

We’ll start with PowerFleet, a company that specializes in combining AI and IoT tech into a unified platform that integrates people, assets, and AIoT data for optimized operations. In practical terms, the company’s platform enables enterprise customers to effectively manage industrial fleets – trucks, tractor trailers, intermodal shipping containers, and other vehicles – ensuring security, tracking, and overall control of these high-value assets.

Among the features that PowerFleet makes available to its customers are regulatory management and compliance, safety and security, fuel management, and maintenance and performance oversight – all vital operations in keeping industrial vehicle fleets in prime operating condition. The company boasts over 7,500 customers around the world and provides top-level support, educational, and implementation services on demand.

In its latest earnings report for fiscal Q1 2025, which ended on June 30, PowerFleet posted a revenue of $75.4 million, reflecting a year-over-year increase of ~10%. Of this total, $56.7 million was generated by the company’s Services segment, with ‘safety-centric product solutions’ contributing significantly to the revenue gain. On the earnings front, the company’s non-GAAP EPS came to $0.00, for a break-even.

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For Craig-Hallum analyst Anthony Stoss, PowerFleet stands out as a quality tech company with plenty of potential.

“We continue to believe investors should own AIOT as we see them developing as a strong SaaS play with an interoperable software platform for 130 different 3rd party devices. We note the company continues to see strength around safety applications with safety solutions up 25% Y/Y. Further, we highlight AIOT increased their total subscriber count 11% Y/Y to 1.95M and management is seeing acceleration with their Unity platform,” Stoss opined.

Looking ahead, Stoss lays out a clear path for PowerFleet to keep up its sound performance, adding, “We continue to reiterate our view on a ‘one plus one equals three’ scenario forming from the company’s business from solutions in the warehouse to on the road. We continue to believe investors will find value in AIOT with strong long-term growth prospects, over 7,500 enterprise customers worldwide, driving $20+ ARPU, and with now 75% of revenues recurring.”

These comments back up the 5-star analyst’s Buy rating on AIOT stock, while his $9 price target implies a one-year gain of 80%. (To watch Stoss’ track record, click here)

Overall, AIOT has earned a Strong Buy consensus rating from the Street, based on 6 unanimously positive analyst reviews. The shares are priced at just under $5, and their average price target of $9 matches the Craig-Hallum view. (See AIOT stock analysis)

AngioDynamics (ANGO)

The next stock we’ll look at, AngioDynamics, is a medical device developer and innovator that’s been in the medical-tech business since 1988. The company has a strong portfolio of medical devices and products, designed to put the right tools in the physicians’ hands so that they can provide an elevated standard of care for patients with cardiovascular and oncologic diseases. These two medical categories are leading causes of death worldwide. Globally, 1 in 6 deaths is caused by cancer; AngioDynamics aims to bring those figures down.

AngioDynamics works toward that goal by offering lines of medical devices aimed at multiple medical specialty fields, including interventional radiology, interventional cardiology, and surgery. The devices are used to diagnose various cancers as well as peripheral vascular disease, and are designed to minimize invasive operations.

Several of AngioDynamics’ products deserve special notice. These include the AlphaVac, a therapeutic device used in endovascular procedures; the NanoKnife, which can provide localized treatments for various cancers; and the Auryon, another endovascular treatment tool optimized for peripheral atherectomy technology. These, and many other high-end medical devices, are available in more than 50 markets around the world, across the US, Europe, Asia, and Latin America.

In its most recent fiscal 4Q24 report, for the quarter ending May 31, AngioDynamics exceeded expectations on both the top and bottom lines. The company reported revenue of $70.98 million, a 22% year-over-year decline, yet still managed to surpass estimates by $120,000. On the bottom line, AngioDynamics posted a net loss of 5 cents per share – while negative, this was a significant 23 cents per share better than anticipated.

For Canaccord Genuity analyst John Young, all of this adds up to a sound outlook for the company. He says of this medical device maker’s prospects, “AngioDynamics remains focused on 1) pursuing larger, faster growing markets, 2) driving portfolio transformation, and 3) improving its financial profile and capital structure. Q4’s results show that this strategy is starting to pay off… Looking ahead, we think ANGO has a solid set up with momentum and catalysts in the Med-Tech business across the board — AlphaVac, NanoKnife, and Auryon have opportunities that leave us cautiously optimistic, particularly given ANGO’s current valuation.”

Young goes on to put a Buy rating on ANGO shares, and he complements that with a price target of $13, showing his confidence in a 74% upside potential for the one-year time horizon. (To watch Young’s track record, click here)

Overall, there are 3 recent analyst reviews on file for ANGO shares, and they are all in agreement that this is a stock to buy, making the Strong Buy consensus rating unanimous. The shares are trading for $7.46 and the average price target, at $13.33, is slightly more bullish than the Canaccord view, indicating room for ~79% appreciation in the coming months. (See ANGO stock analysis)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The stock market’s performance has become more bifurcated this year. While high-flying tech stocks have driven the S&P 500 index to new highs, consumer spending headwinds have weighed on the performance of industry-leading consumer brands.

Two widely held stocks that have delivered subpar performance are Tesla (NASDAQ: TSLA) and Starbucks (NASDAQ: SBUX). However, both stocks recently jumped as new growth catalysts came into focus, and two Wall Street analysts believe now’s the time to buy. Here’s why these top stocks are poised to take off in the coming years.

1. Tesla

Tesla shares delivered phenomenal returns to investors over the last decade, but the stock has been flat over the last few years. It’s been challenging to sell more electric cars, with higher interest rates making financing more expensive, in addition to increasing competition. Despite the headwinds, Tesla stock is up 16% over the last three months as investors have also turned their attention to other promising opportunities in the near term.

Piper Sandler analyst Alexander Potter believes the stock is a buy heading into Tesla’s robotaxi unveiling scheduled for Oct. 10. A robotaxi service should be very profitable for Tesla over time, but it also highlights the opportunity in the company’s battery production, which is intended to reduce manufacturing costs and improve margins.

Tesla’s battery production is ramping up quickly. It produced 50% more 4680 cells in the second quarter than the first quarter. This will support the rapid growth Tesla is experiencing in its energy storage business while also potentially supplying millions of electric cars on the road, especially robotaxis.

Ark Invest believes that Tesla’s operating profit per kilowatt-hour deployed could be $466 for robotaxis compared to just $60 for normal electric cars. This fits into to the firm’s projection that Tesla will increase its profitability and send the stock to as high as $2,600 by 2029.

CEO Elon Musk believes the optimistic projection is possible. The world is shifting toward electric and autonomous transportation. Tesla’s rapidly growing battery production highlights an advantage in manufacturing, which will become quite valuable. Transportation is a $10 trillion market, and Tesla is the disruptor.

2. Starbucks

Starbucks is the top restaurant brand in the world, according to Brand Finance, but like Tesla, the stock is weighed down by sluggish consumer spending. Starbucks’ comp sales declined over the last two quarters, but the stock is up 30% after the company announced it was hiring Brian Niccol from Chipotle Mexican Grill as CEO.

Niccol steered Chipotle to incredible growth over the last five years. It was already a high-performing business, but Niccol was able to squeeze higher margins out of the restaurants, which helped send the stock up 232% over the last five years.

Evercore ISI analyst David Palmer sees a similar opportunity at Starbucks. Palmer recently upgraded the stock to an outperform (buy) rating. The hiring of Niccol increases the probability of a successful turnaround for Starbucks, according to Palmer.

One factor that has benefited Chipotle is its digital ordering capabilities, which make up 35% of Chipotle’s business. Starbucks is also great at implementing mobile ordering, but it should see more enhancements under new management that could reduce wait times and improve store efficiency. Niccol’s previous record of leading similar initiatives at Chipotle should put Starbucks on a profitable growth trajectory.

Palmer  sees Starbucks annualized earnings growth reaching 15% or greater over the next three years. Assuming the stock continues to trade at a market average price-to-earnings ratio of 27, investors should see attractive returns on their investment.

Should you invest $1,000 in Tesla right now?

Before you buy stock in Tesla, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Tesla wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $731,449!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of August 26, 2024

John Ballard has positions in Tesla. The Motley Fool has positions in and recommends Chipotle Mexican Grill, Starbucks, and Tesla. The Motley Fool recommends the following options: short September 2024 $52 puts on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.

2 Top Stocks to Buy Now, According to Wall Street was originally published by The Motley Fool

Inheriting an IRA or 401(k) can add to your wealth but it can also bring some potential tax headaches. One tricky issue involves required minimum distributions or RMDs. IRA and 401(k) plan owners are required to take minimum distributions from their accounts beginning in the year they turn 72. The IRS has special rules regarding the RMD in the year of death that IRA and 401(k) beneficiaries need to be aware of. A financial advisor can help you through the ins and outs of planning for retirement to put your mind at ease.

When Do RMDs Begin?

Under the tax code, certain retirement account owners are required to begin taking minimum distributions once they turn 72. The types of accounts that are subject to RMDs include:

Roth IRAs are not subject to RMDs during the account owner’s lifetime. You will, however, be subject to RMDs if you inherit a Roth IRA. The IRS is very specific about when these distributions must begin. The required beginning date (RBD) for RMDs is April 1^st of the year following the year that the account owner turns 72. That’s important for understanding when an RMD in the year of death is necessary.

When Is an RMD in Year of Death Required?

If you inherit an IRA or another tax-advantaged account that’s subject to RMDs, the timing determines whether you’re required to take an RMD in the year of death.

Here’s how it works:

• You must take an RMD if the account owner has reached their required beginning date but has not taken a required minimum distribution for the year.

• You do not have to take an RMD if the account owner passes away before their required beginning date.

Here’s an example of how this works. Say your father turned 72 in March of 2020, making his required beginning date April 1, 2021. He passes away in November 2021 without having taken his RMD for the year. In that instance, you would be responsible for taking the distribution as the account beneficiary.

Now, say your father passed away in March of 2021 instead. Since he has not reached his required beginning date, you would not be obligated to take an RMD in the year of death.

When beneficiaries must take an RMD in the year the account owner dies, the amount is reported on their tax return as income. They must pay taxes on it, the same way that the account owner would have had to if they had taken the distribution themselves.

How to Calculate RMD in Year of Death

If you’re required to take RMDs in the year of death after the account owner passes away, the calculation method is based on the RMD they would have received. Following IRS rules, the RMD for any year is determined using this formula:

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Required minimum distribution = account balance as of the end of the preceding calendar year divided by a distribution period from the IRS Uniform Lifetime Table

The Uniform Lifetime Table is designed for unmarried IRA owners, married IRA owners whose spouses aren’t more than 10 years younger than they are and married owners whose spouses aren’t the sole beneficiaries of their IRAs. Table I (Single Life Expectancy) is used when the beneficiary is not the spouse of the IRA owner. Table II (Joint Life and Last Survivor Expectancy) is used for owners whose spouses are more than 10 years younger and the sole beneficiary of the IRA.

If the account owner named multiple beneficiaries and didn’t take their required minimum distribution, each beneficiary shares responsibility for it. Beneficiaries can split the account into multiple inherited IRAs, which would allow them to claim their share of the account balance while also shouldering their part of the tax obligation.

For RMDs in the year following the account owner’s death, distribution calculations will depend on who is the beneficiary of the account. Generally, designated beneficiaries will use the IRS Single Life Expectancy Table to figure the distributions. This table uses life expectancy and the IRA balance to determine RMDs.

What If You Don’t Take an RMD in Year of Death?

The deadline for taking RMDs in the year of death is December 31^st of the year in which the original account owner passes away. The IRS imposes a strict penalty when RMDs are required but not taken by beneficiaries. If you inherit an IRA or 401(k) and fail to take the RMD for the year of the account owner’s death, a 50% tax penalty applies.

There’s an exception if the estate is named as the beneficiary of an IRA. In that case, the estate takes the RMD and is responsible for reporting the distribution.

The 50% penalty can substantially reduce what you’re able to withdraw from an inherited IRA or 401(k). For that reason, it’s important to understand when RMDs are or are not required when the account owner passes away. Talking to a tax expert or your financial advisor can help you to prepare for any tax liability that might be created if you stand to inherit an IRA or 401(k) from someone else.

Withdrawing an Inherited IRA

The IRS rule for the year of death RMDs is not the only tax rule to be aware of with inherited retirement accounts. You also have to be aware of your tax liability for managing the account in future years.

Spouses have several options for inheriting an IRA. For instance, they can:

If you are not the account owner’s spouse, you can only set up an inherited IRA. You won’t be allowed to make any new contributions to the account. You also have to fully withdraw all of the money in the account. You have 10 years following the original account owner’s death to do so. If you fail to do so, the IRS can apply a tax penalty.

In terms of how withdrawals are taxed, they follow the same tax rules as the original IRA. So if you inherit a traditional IRA, withdrawals are taxed at your ordinary income tax rate. If you inherit a Roth IRA, RMDs are required but withdrawals are tax-free as long as the account is at least five years old. A financial advisor can help you navigate an inheritance.

The Bottom Line

Inheriting retirement accounts can add a wrinkle to your tax situation and it’s important to be aware of the rules for the year of death RMDs. The main thing to know is when the account owner’s required beginning date is, as that can decide whether you’ll need to take an RMD in the year of death or not.

Tips for Retirement Planning

• Consider talking to your financial advisor about how to handle an inherited retirement account. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

• When rolling over an inherited IRA, give some thought to which brokerage you’d like to use to hold those funds. Brokerages can vary greatly in terms of the fees they charge and the range of investment options they offer. Comparing different online brokerages can help you find the best place to keep inherited retirement funds.

• Keep an emergency fund on hand in case you run into unexpected expenses. An emergency fund should be liquid — in an account that isn’t at risk of significant fluctuation like the stock market. The tradeoff is that the value of liquid cash can be eroded by inflation. But a high-interest account allows you to earn compound interest. Compare savings accounts from these banks.

• Are you a financial advisor looking to grow your business? SmartAsset AMP helps advisors connect with leads and offers marketing automation solutions so you can spend more time making conversions. Learn more about SmartAsset AMP.

©iStock.com/dragana991, ©iStock.com/Dean Mitchell, ©iStock.com/shapecharge

The post How to Calculate RMD in Year of Death appeared first on SmartAsset Blog.

Coming up: Labor Day holiday, August job numbers and earnings from Broadcom, Zscaler, Dollar Tree

Key Takeaways

• Markets will be closed for the Labor Day holiday Monday.

• While reports on job openings and private-sector hiring will set the stage earlier in the week, August jobs data will capture attention on Friday.

• This week’s technology company earnings include Broadcom, Hewlett Packard Enterprise, and Zscaler.

• Retailers Dollar Tree, Big Lots, and Dick’s Sporting Goods also are scheduled to report their financial results.

Markets will be closed for the Labor Day holiday on Monday. After that, investors will be focused on key labor market data, primarily the Friday release of the August jobs report.

Earnings reports this week are again led by a chipmaker, with Broadcom’s (AVGO) financials on Thursday, while Hewlett Packard Enterprise (HPE), Zscaler (ZS), and Samsara (IOT) are other noteworthy tech companies also on deck. Investors will also hear from retailers Dollar Tree (DLTR), Big Lots (BIG) and Dick’s Sporting Goods (DKS).

Monday, Sept. 2

Tuesday, Sept. 3

• S&P manufacturing PMI (August)

• ISM manufacturing (August)

• Construction spending (July)

• Zscaler and GitLab (GTLB) report earnings

Wednesday, Sept. 4

• Trade deficit (July)

• Job openings (July)

• Factory orders (July)

• Federal Reserve Beige Book

• Copart (CPRT), Hewlett Packard Enterprise, Dollar Tree, Dick’s Sporting Goods, and Hormel Foods (HRL) report earnings

Thursday, Sept. 5

• Initial jobless claims (Aug 31)

• ADP employment (July)

• U.S. productivity and costs (Second-quarter revisions)

• S&P services PMI (August)

• ISM services (August)

• Broadcom, Samsara, Guidewire Software (GWRE), and DocuSign (DOCU) report earnings

Friday, Sept. 6

• U.S. employment report (August)

• Final day before Federal Reserve officials’ public-speaking blackout period

• BRP (DOOO) and Big Lots report earnings

Jobs Report Gives Fed Last Look at Labor Market Before Meeting

With the focus turning to jobs, Federal Reserve officials will get one last look at the labor market when the Bureau of Labor Statistics releases August employment and wage numbers on Friday.  Last month’s report showed an unexpected jump in the unemployment rate to 4.3%, unsettling the markets and raising questions about whether the Fed missed its opportunity to cut rates at its July meeting.

Since then, jobless claims have been fairly steady and close to expectations. However unexpected movements in the data could raise more questions about how the Federal Reserve will cut rates at its Sept. 17-18 meeting. Wednesday’s job openings report, Thursday’s private-sector ADP employment report, and weekly jobless claims data will set the stage for the Friday labor report.

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Chipmaker Broadcom Leads Tech, Retail Earnings

Following the momentum from last week’s market focus on Nvidia (NVDA), another chipmaker will take the spotlight when Broadcom reports its earnings on Thursday. Nvidia slid despite a beat on its earnings, and Broadcom’s report comes after its recent 10-for-1 stock split.

Market watchers will have other tech earnings to study this week, including additional Thursday reports from Samsara, Guidewire Software, and DocuSign. Hewlett Packard Enterprise headlines Wednesday’s report schedule as the server provider looked to continue to stoke results with earnings from its artificial intelligence (AI) products. Cybersecurity provider Zscaler and software platform GitLab report on Tuesday.

A handful of value retailers are scheduled to deliver reports this week, including Dollar Tree, which is coming off a disappointing prior quarter, and Big Lots, whose report comes on the heels of talk of bankruptcy amid a decline in its home and furniture sales.

Read the original article on Investopedia.

Opendoor Technologies (NASDAQ: OPEN) and Redfin (NASDAQ: RDFN) are cut from the same cloth in many ways. Both are real estate tech stocks aiming to disrupt the massive real estate industry. They have a lot of exposure to the housing market, which has sunk both stocks in the post-pandemic slump.

As the chart below shows, Opendoor and Redfin are both down sharply from their previous peaks.

Both stocks are down roughly 90% from their pandemic-era peaks, but as investors look forward to interest rate cuts, expected to begin in September, Redfin and Opendoor are suddenly popping.

As of Aug. 27, Redfin was up 75% from where it closed on Aug. 7, while Opendoor is up 49% in the same timeframe.

Those rallies make sense. Investors now widely expect the Federal Reserve to cut benchmark interest rates in September, especially after Jerome Powell’s comments last week. Lower mortgage rates should help revive the struggling housing market, boosting Opendoor and Redfin.

But if you’re trying to choose between these two stocks, which is the better one to buy today? Let’s take a look to see who comes out on top.

Opendoor vs. Redfin: business model

Though Opendoor and Redfin position themselves as tech-forward real estate disruptors, they operate with different business models. Opendoor is essentially a home flipper. The company seeks to purchase homes and resell them for a higher value after making modest repairs or improvements that, in addition to a 5% service fee, it typically charges the seller.

Opendoor aims to disrupt the housing market by presenting a form of home-selling that it believes is easier and more efficient than the traditional route. By selling to Opendoor, a seller can avoid finding an agent, preparing the home for showings, hosting visits, waiting for offers, and negotiating over repairs, as well as the risk that the seller will back out.

Redfin, on the other hand, functions as an online real estate brokerage. The company charges most home sellers a commission of 1%-1.5%, compared to traditional brokerages’ 2.5%-3% standard rate. However, that could change after the National Association of Realtors (NAR) settlement.

In addition to the traditional brokerage business, the company offers rentals, mortgages, and title services in an effort to be a one-stop shop for prospective homebuyers. Redfin previously had a home-flipping business similar to Opendoor, called Redfin Now, but it shuttered it in 2022 as it was losing money and found it too hard to predict prices accurately.

Opendoor vs. Redfin: financials

Both Redfin and Opendoor have been historically unprofitable, especially amid the challenges in the housing market. Redfin was briefly profitable on an operating income basis during the pandemic, while Opendoor has never been operating-income profitable since it went public, though it came close in 2022 before mortgage rates started to rise.

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In its most recent quarter, Opendoor reported a gross profit of $129 million on $1.51 billion in revenue and an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $5 million. Opendoor’s numbers had improved substantially from the quarter a year ago as the company cleared its overpriced inventory.

Redfin’s revenue rose 7% to $295.2 million in the second quarter, and its gross profit was up 9% to $109.6 million. It also reported flat adjusted EBITDA, up from a loss of $6.9 million in the second quarter.

Opendoor vs. Redfin: valuation

Valuing the two companies is difficult because they aren’t profitable. Revenue is also a poor metric to use with Opendoor because its revenue is essentially pass-through income from the sales of the homes it purchases. It can easily generate unprofitable revenue.

Perhaps the best way to compare the two companies on valuation is by using gross profit. The two companies have similar valuations, with Opendoor trading at 4.1 times gross profit while Redfin is valued at 3.9. The difference is negligible.

Opendoor vs. Redfin: Which is the better buy?

As you can see from the comparisons, the two stocks have a lot in common, including similar valuations, financial challenges, and disruptive-yet-unproven business models in the real estate industry.

Of the two companies, Redfin seems to have a slight edge right now. The brokerage model is profitable in a healthy real estate environment, and Redfin could benefit from the NAR settlement, which could encourage more agents frustrated with what could be lower commissions from traditional brokerages to work with Redfin.

Redfin also seems better positioned to capitalize on lower rates as that seems likely to bring homebuyers back into the market and drive a rebound in housing inventory for sale. Opendoor is more reliant on home prices rising, but that may be more difficult since they are already at all-time highs.

Between the two, Redfin looks like the better way to play the real estate recovery, but investors looking for a range of options wouldn’t be remiss to buy shares of Opendoor. Both stocks have a lot of upside potential as the housing market comes back to life.

Should you invest $1,000 in Redfin right now?

Before you buy stock in Redfin, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Redfin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $731,449!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

See the 10 stocks »

*Stock Advisor returns as of August 26, 2024

Jeremy Bowman has positions in Redfin. The Motley Fool has positions in and recommends Opendoor Technologies and Redfin. The Motley Fool recommends the following options: short November 2024 $13 calls on Redfin. The Motley Fool has a disclosure policy.

Better Real Estate Stock to Buy: Opendoor vs. Redfin was originally published by The Motley Fool

Marc Benioff said Microsoft’s Copilot AI hasn’t lived up to the hype.

The Salesforce CEO said on the company’s second-quarter earnings call that its own AI is nothing like Copilot, which he said was unimpressive.

“So many customers are so disappointed in what they bought from Microsoft Copilot because they’re not getting the accuracy and the response that they want,” Benioff said. “Microsoft has disappointed so many customers with AI.”

Microsoft Copilot integrates OpenAI’s ChatGPT tech into the company’s existing suite of business software like Word, Excel, and PowerPoint that comes with Microsoft 365. Launched last year, Copilot is meant to help companies boost productivity by responding to employee prompts and helping them with daily tasks like scheduling meetings, writing up product announcements, and creating presentations.

In response to Benioff’s comments, Jared Spataro, Microsoft’s corporate vice president for AI at work, said in a statement to Fortune that the company was “hearing something quite different,” from its customers.

“When I talk to CIOs directly and if you look at recent third-party data, organizations are betting on Microsoft for their AI transformation,” he said.

The company’s Copilot customers also shot up 60% last quarter and daily users have more than doubled, Spataro added.

Benioff’s comments come as he prepares to show off Salesforce’s new AI platform, dubbed Agentforce, at the company’s annual Dreamforce meeting next month. The platform will be targeted at sales and customer service at first and will launch publicly in October.

Meanwhile, Agentforce is already being used by some of Salesforce’s biggest customers including payroll and HR software company ADP, restaurant reservation platform OpenTable, and the Wyndham hotel chain, Benioff told CNBC. He added that its Agentforce AI agents were resolving more than 90% of ADP’s customer service inquiries.

On the earnings call, Benioff predicted Agentforce AI agents are going to be a breakthrough for its customers.

“With our new Agentforce platform, we’re going to make a quantum leap for AI,” he said.

This story was originally featured on Fortune.com