Day: September 27, 2024

After complaining that Gen Z grads are difficult to work with for the best part of two years, bosses are no longer all talk, no action—now they’re rapidly firing young workers who aren’t up to scratch just months after hiring them.

According to a new report, six in 10 employers say they have already sacked some of the Gen Z workers they hired fresh out of college earlier this year.

Intelligent.com, a platform dedicated to helping young professionals navigate the future of work, surveyed nearly 1,000 U.S. leaders. It found that the class of 2024’s shortcomings will impact future grads.

After experiencing a raft of problems with young new hires, one in six bosses say they’re hesitant to hire college grads again.

Meanwhile, one in seven bosses have admitted that they may avoid hiring them altogether next year.

Three-quarters of the companies surveyed said some or all of their recent graduate hires were unsatisfactory in some way.

Gen Z grads “unprepared and unprofessional”

So, where is it going wrong for fresh-faced graduates?

Employers’ gripe with young people today is their lack of motivation or initiative—50% of the leaders surveyed cited that as the reason why things didn’t work out with their new hire.

Bosses also pointed to Gen Z being unprofessional, unorganized and having poor communication skills as their top reasons for having to sack grads.

Leaders say they have struggled with the latest generation’s tangible challenges, including being late to work and meetings often, not wearing office-appropriate clothing, and using language appropriate for the workspace.

Now, more than half of hiring managers have come to the conclusion that college grads are unprepared for the world of work. Meanwhile, over 20% say they can’t handle the workload.

In reality, colleges know that their students are wholly unprepared for the workforce—and some have started stepping up to fill the gap.

For example, Michigan State University is teaching students how to handle a networking conversation, including how to look for signs that the other party is starting to get bored and that it’s time to move on.

Meanwhile, a high school in London is trialing a 12-hour school day to prepare pupils for adult life.

Want to be more hirable? Attitude is everything

When asked what would make college grads more hirable, bosses responded: A positive attitude and more initiative.

Intelligent’s chief education and career development advisor, Huy Nguyen, advises Gen Z grads to observe how other workers interact to understand the company culture at any new firm they may join. From there, it’s easier to gauge what’s an appropriate way of engaging with others.

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“Take the initiative to ask thoughtful questions, seek feedback, and apply it to show your motivation for personal growth,” Nguyen adds. “Build a reputation for dependability by maintaining a positive attitude, meeting deadlines, and volunteering for projects, even those outside your immediate responsibilities,” says Nguyen.”

Amazon CEO Andy Jassy recently echoed that an “embarrassing” amount of your success in your twenties depends on your attitude—and the reason why is simple: Managers would rather work with positive people.

Some leaders have even insisted that a can-do attitude at work will advance young workers’ careers more than a college degree.

Richard Branson, the billionaire founder of Virgin, has repeatedly urged young people to ditch university in favor of the “school of life”.

Meta CEO Mark Zuckerberg recently claimed that raw talent and personality trump credentials.

To that end, Cisco’s top executive in the U.K., David Meads, dropped out of school at 16 years old. He told Fortune that “attitude and aptitude are more important than whatever letters you have after your name, or whatever qualifications you’ve got on a sheet.”

Have you had to let go of a Gen Z employee? Or perhaps, you are the Gen Zer who’s just been fired. Fortune wants to hear from you. Email: orianna.royle@fortune.com

This story was originally featured on Fortune.com

Cathie Wood is the head of Ark Investment Management, which operates a family of exchange-traded funds (ETFs) focused on innovative technology stocks. Last year, Wood said software companies could be the next big opportunity in the artificial intelligence (AI) industry. She predicts they will eventually generate $8 in revenue for every $1 they spend on AI data center chips from suppliers like Nvidia.

And Wood has put her money where her mouth is. Since making that call, she has piled into AI software companies like xAI, Anthropic, and OpenAI through the private Ark Venture Fund. Plus, Ark’s ETFs hold several AI software stocks, including Tesla, Palantir, Meta Platforms, and Microsoft.

If Wood is ultimately right about AI software companies, here’s why Google parent Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) could be among the biggest winners.

Alphabet is transforming Google Search using AI

Alphabet is a tech conglomerate that is home to Google, YouTube, self-driving vehicle company Waymo, and a host of other businesses. Google Search accounted for more than half of Alphabet’s $84.7 billion in revenue during the second quarter of 2024, driven by its 90% market share in the internet search industry. But that dominance faces its greatest-ever test because of AI.

AI chatbots, like OpenAI’s ChatGPT, provide direct responses to users’ queries, giving them rapid access to information on almost any topic. Google, on the other hand, requires users to sift through web pages to find the information they need and generates revenue by charging businesses money to promote their websites in the search results. As a result, the traditional search model is very important for Alphabet.

But rather than defend what could eventually become obsolete, Alphabet decided to make drastic changes. In many cases, users who run Google Search queries will now receive AI-generated, text-based responses above the web search results to give them faster access to information. Google also launched AI Overviews earlier this year, taking that concept a step further.

Overviews incorporate text, images, and links to third-party websites to provide more complete answers to prompts within Search. Plus, with the click of a button, the user can simplify or break down responses to gain a better understanding of the content. Alphabet has already discovered that links within Overviews receive more clicks compared to the same links in the traditional search format, so this new feature could be a big driver of advertising revenue in the future.

On top of that, Alphabet now offers its own family of AI models called Gemini (and a chatbot with the same name), which can answer complex questions and generate content like text and images. For an additional fee, Gemini is already available as an add-on in Google Workspace, which is home to productivity apps such as Gmail, Docs, Sheets, and more. As a result, it could become a powerful driver of subscription-based revenue over time.

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Google Cloud is Alphabet’s fastest-growing business

Search might be Alphabet’s largest business, but Google Cloud is growing at twice the pace. It generated a record $10.3 billion in revenue during the 2024 second quarter, a 29% increase from the year-ago period — compared to 13.7% growth in Search.

Google Cloud provides a portfolio of services to help businesses succeed in the digital age, such as data storage, web hosting, and software development tools, among others. However, the platform has also become a leading provider of AI services.

Developers can access the computing power they need to create AI software through Google Cloud’s data centers. To accelerate their progress, they can even use the latest ready-made large language models (LLMs). That includes Gemini and over 130 others from leading start-ups and third-party developers.

Google Cloud is also designing its own data center chips to give AI software developers more choices, which helps differentiate the platform from other cloud providers that rely primarily on suppliers like Nvidia. Google recently launched its sixth-generation tensor processing unit (TPU) called Trillium, which achieves almost five times the peak computing performance of the previous generation.

Most AI developers pay for computing capacity by the minute, so faster chips can substantially reduce costs. Plus, circling back to Wood’s forecast, if Google makes its own chips at scale, the payoff could be significantly larger when it uses them to create software — or leases them to other developers — because it won’t have to send billions of dollars to suppliers like Nvidia.

Alphabet stock is cheap, but there is one big caveat

Alphabet generated $6.97 in earnings per share during the past four quarters, and based on its stock price of $161.85 as of this writing, it trades at a price-to-earnings (P/E) ratio of 23.2. That makes Alphabet the cheapest of all the U.S. technology companies valued at $1 trillion or more:

But there is one glaring problem, and it has nothing to do with the company’s growth or its position as an AI powerhouse.

The U.S. Department of Justice (DOJ) filed an antitrust lawsuit against Alphabet in 2020, alleging the company engaged in monopolistic practices by paying Apple as much as $20 billion a year to make Google the default search engine on its devices. Unfortunately for Alphabet, the judge in the case handed down a decision last month and sided with the DOJ.

It’s unclear what the consequences will be. Alphabet might have to pay a financial penalty, or the government could force a breakup of the entire company. The latter would create significant uncertainty for investors because Alphabet would likely have to sell certain parts of its business to satisfy the DOJ that it won’t engage in anti-competitive behavior in the future.

Many Wall Street analysts say a breakup would be an extreme and unlikely outcome. Technology analyst Dan Ives of Wedbush Securities thinks Alphabet will reach a settlement with the DOJ within the next 18 months to bring the matter to a close. That could involve a financial penalty and some changes to how Alphabet structures deals with its partners.

Absent a settlement, it could take years to reach a final resolution while Alphabet appeals the judge’s decision, so the status-quo should prevail for now. Therefore, Alphabet stock looks like a great value at the current price, and if the company does emerge from this regulatory situation intact, it could look like an absolute bargain, considering Cathie Wood’s AI software forecast.

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

Before you buy stock in Alphabet, 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 Alphabet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Palantir Technologies, and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Cathie Wood Says Software Is the Next Big AI Opportunity — 1 Spectacular Stock You’ll Regret Not Buying if She’s Right was originally published by The Motley Fool

(Bloomberg) — The former contestants on Donald Trump’s TV show The Apprentice who co-founded his media startup wasted no time offloading millions of shares in the company after restrictions that prevented selling were lifted.

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Andy Litinsky and Wes Moss’s United Atlantic Ventures sold more than 7.5 million Trump Media & Technology Group Corp. shares within a week after a lock-up agreement expired last week, according to a regulatory filing on Thursday. The stake would have been worth at least $88 million, based on the lowest price where shares have traded during regular hours since the restrictions were lifted.

The sales likely made a nice payout for the pair who helped co-found Trump Media, which owns the X-lookalike social media platform Truth Social, even though the restrictions preventing them from cashing in the stock for nearly six months theoretically cost them hundreds of millions of dollars.

The former president and current Republican nominee has insisted he has no plans on selling shares and has apparently kept that pledge through Tuesday, the earliest day such a move would have been disclosed. His current stake of nearly 115 million shares is worth $1.6 billion, though the rules around him turning the position into cash limit how quickly any sale could happen.

Investors anticipated that Litinsky and Moss would offload stock, and are also braced for a flurry of sales from Patrick Orlando, whose fund, ARC Global Investments II LLC, sponsored the special-purpose acquisition company that merged with Trump Media to take it public. There have been no filings indicating Orlando has sold shares.

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Semiconductors are essential to modern technology, and the pandemic helped to accelerate its adoption by pushing many individuals and corporations to digitize. This surge in demand for microchips has continued post-pandemic.

The introduction of generative artificial intelligence (AI), along with the Internet of Things (IoT), 5G, and autonomous vehicles, have all contributed to the continued progress of the semiconductor industry.

The good news is that you can share in the spoils of this rapid growth. The semiconductor sector includes solid growth companies that are seeing their revenue and profits soar. By parking some of your money in these stocks, your portfolio can enjoy stellar capital gains over time. These businesses should have a dominant market share and a business model that can help them capture sustainable growth.

Here are two attractive semiconductor stocks whose share prices could soar in the coming years.

1. Synopsys

Synopsys (NASDAQ: SNPS) is the market leader in designing and testing complex chips, as well as the models and processes for companies to manufacture these chips. With silicon chips becoming more advanced due to the progress of IoT, AI, and 5G, Synopsys’ services are in great demand. Foundries need guidance on the complexities of these designs to effectively produce these chips.

The company has demonstrated steady growth, with revenue rising from $4.2 billion in fiscal 2021 (ended Oct. 31) to $5.8 billion in fiscal 2023. Net income climbed from $757.5 million to $1.2 billion over the same period. The business also generated an average positive free cash flow of $1.5 billion over these three fiscal years.

This strong performance has continued into the first nine months of fiscal 2024. Revenue rose 16.6% year over year to $4.5 billion, and operating income climbed 23% to $1 billion. Net income was 30% higher than the prior year at $1.1 billion, and the company had positive free cash flow of $725.4 million.

Management is predicting strong momentum and expects full fiscal 2024 revenue to increase by 15% year over year to a new record. The company’s long-term objectives include double-digit revenue growth, free cash flow margins in the mid-30% range, and earnings per share in the mid-teens.

Sassine Ghazi, who was named CEO in January this year, said that design cycles are shortening while chip complexity is increasing, both of which are positive signs for Synopsys. AI is driving demand for high-performance computing in data centers, smartphones, and personal computers. The innovation that comes with evolving AI needs will require more-complex chipsets, which should drive higher business volumes for the company.

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Synopsys acquired Ansys in January for around $35 billion to help increase its portfolio of products and technologies, making it complementary to its business.

With this purchase, Synopsys expects to see its total addressable market increasing by 50% to around $28 billion, which will grow at roughly 11% per annum, creating significant business opportunities for the combined company.

2. Nvidia

Nvidia (NASDAQ: NVDA) is a market leader in graphics processing units (GPUs) with a market share of around 88% in 2024. GPUs are ideal for powering AI, machine learning, and other uses.

Nvidia has grown at breakneck speed over the last three fiscal years, and management believes this is just the tip of the iceberg. Revenue more than doubled from $26.9 billion in fiscal 2022 (ending Jan. 31) to $60.9 billion in fiscal 2024. Net income tripled over the period to $29.8 billion from $9.8 billion.

Free cash flow rose from $8.1 billion in fiscal 2022 to $27 billion in fiscal 2024.

In the first six months of fiscal 2025, this strong momentum continued. Revenue more than doubled year over year to $56.1 billion while net income leaped from $8.2 billion in the previous year to $31.5 billion. Free cash flow for the first half of fiscal 2025 was $28.5 billion, already exceeding the total for the whole of fiscal 2024. The company also pays a quarterly cash dividend of $0.01 per share.

CEO Jensen Huang said that demand remains very strong as data centers seek to upgrade for accelerated computing and generative AI.

Nvidia’s next-generation GPU, the Blackwell, failed to ship in the second quarter of calendar 2024 because of a manufacturing defect, causing widespread grief for many customers, which were relying on the new GPU to power their AI requirements.

But Huang assured buyers that Blackwell chips are now in full production and will start being shipped in the fourth quarter of this calendar year.

A bright outlook for semiconductor sales

Semiconductor sales experienced a cyclical year-over-year decline in 2023 because of the surge in pent-up demand for electronic products during the pandemic. The Semiconductor Industry Association announced that global sales fell by 8.2% year over year to $526.8 billion after falling from their 2022 peak.

However, there are strong indicators that 2024 and 2025 will see a sharp rebound and continued growth for the industry. World Semiconductor Trade Statistics, a group that tracks the industry, forecasts that global semiconductor sales will grow 16% year over year for 2024, followed by a 12.5% year-over-year rise in 2025 to hit $687 billion.

SEMI, representing more than 300 businesses in the industry, predicts 3.4% year-over-year growth for global sales of semiconductor manufacturing equipment to $109 billion for this year, followed by 17% year-over-year expansion to $128 billion for 2025.

These projections bode well for Synopsys and Nvidia, and both companies should see firm demand for their products and services.

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

Before you buy stock in Nvidia, 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 Nvidia 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 $740,704!*

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 September 23, 2024

Royston Yang has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Synopsys. The Motley Fool has a disclosure policy.

2 Semiconductor Stocks That Could Go Parabolic was originally published by The Motley Fool