REUTERS/Steve Marcus

Nvidia is crazy expensive compared to its semiconductor peers, and the stock may be worth the stretched price thanks to autonomous vehicles, Cowen says.

The firm launched coverage on Nvidia this week, giving the chipmaker a $325 price target and "outperform" rating. That’s about 31% above where shares were trading Friday afternoon.

"While we recognize shares are expensive, currently trading with a ~50% premium over peer multiples, we would argue NVIDIA’s growth potential and ties to multiple AI -driven growth vectors warrant an even higher multiple," analyst Matthew Ramsay told clients this week. Nvidia's estimate price-to-earnings ratio for 2018 is 31.71 verus the sector average of 21.84, according to Bloomberg data. 

Among those artificial intelligence drivers is Nvidia’s role in powering autonomous vehicles, something Cowen says is only in the extremely early stages.

"NVIDIA’s technology and thought leadership has placed it in a prime position to take meaningful share of the autonomous driving processing market in the future," said Ramsay. "We believe (1) the vast majority of personal and enterprise vehicles will have autonomous capability by 2035, and (2) significant computing (both in-car and in-datacenter) will be required to bring this ecosystem to market."

The company already has a robust network of over 20 partners using its technology, including names like Tesla, Audi, Mercedes, and Volvo. What’s more, it’s not just something to look forward to, revenue from autonomous driving could kick in as soon as next year, Cowen estimates.

"While investors rightly focus on datacenter and gaming, we believe the next leg of growth for NVIDIA as a company and NVDA shares will come in C’19-’21 in the automotive franchise," said the firm.

Nvidia was one of the best-performing stocks of 2017, contributing to its stretched valuation, and have already risen 22% in 2018 thus far.

Markets Insider

American consumers are buying personalized lip glosses from brands they only been exposed to on Instagram, or custom mattresses they've never touched or laid up on, or curated subscription boxes of form-fitting apparel.

At the same they're ordering household items in bulk with a few mindless clicks on Amazon.

And the TV industry is still focused on selling the whole country the same soap, beer or chips.

Marketing is going through a revolution, as upstart brands chip away at the business of legacy giants in nearly every category. As chronicled in a recent Interactive Advertising Bureau Report, these newbie brands are focused on selling directly to consumers, using data, sophisticated targeting and primarily digital media.

They buy ad space using automated software. And they only buy ads when they want to sell more stuff.

Yet as the top broadcast and cable networks rolled out splashy presentations of their upcoming shows in New York this past week at the fabled upfronts, it seemed clear that the TV business doesn't have a plan.

Sure, most of the sales chiefs at the big broadcast players paid lip service to data and so-called advanced TV this past week, though more often they criticized social platforms for how they misuse data. But primarily their pitches were more heart than science, hoping to get brands to tell their stories to as many people as they can alongside TV's comedies and dramas.

That may make sense for now, as the Cokes and Budweisers and General Motors and Procter and Gambles of the world still have massive media budgets compared to every indy purse maker or craft hot sauce purveyor selling products one by one on Facebook or Instagram.

The big brands will be big for a while, and TV is still a $70 billion plus market. And they'll still want to buy loads of TV ad space up front, since TV ad space is a shrinking commodity, given how ratings continue to slide.

Yet TV advertising had its first down year in a while, reported Bloomberg.

And what happens when these giant brands start fading into the background? What does TV do then?

The brands of the future look very different than the past few decades IAB

It's the biggest change to marketing in decades

Dave Morgan, CEO of the TV tech firm Simulmedia, said the shift from mass marketing to direct brands is the biggest he's seen in 15 to 20 years in the ad business.

It's not easy to quantify, but the IAB recently noted that "non store retailing" (which includes direct selling on the web, catalogs, etc.) accounted for less than 4% of retail sales in the early 1990s. That figure swelled to 9.4% of a $5.3 trillion retail economy as of 2015.

Is TV ready for this?

"TV remains an extraordinarily efficient way of connecting brands and retailers to consumers," said IAB CEO Randall Rothenberg. "That said, the broadcasters must be aware that the big, television-centric consumer brands are being challenged by direct brands ... they must adapt their capabilities and processes to be more appealing both to these disruptor brands, and to the giant incumbents."

That's why this week's upfront presentations were striking - for hardly talking about this new reality.

"It's not inevitable that these brands get to TV," Morgan said. "But for TV's sake they better get there or it's going to lose its growth."

There's no going back for direct brands

Take Evereden, a new skin care brand for babies.

Kim Ho, the cofounder and CEO said that the company spent hundreds of hours brainstorming marketing strategies before launching, and "never once did TV come up" as an option.

To be sure, Evereden isn't exactly spending hundreds of millions of marketing dollars. But regardless, the company sees TV as simply not viable for its data-driven approach.

"We grew up on social, and we have people shopping on Facebook," she said. "We don't think about TV, because not only is our demographic hard to reach there but the analytics are just lagging."

"On Facebook, we know who is buying what, who is abandoning purchases, what people are interested in. There is no way TV could ever tell me that."

Ho's point of view regarding TV advertising is increasingly common, even among larger direct brand marketers like Warby Parker, Casper, and Dollar Shave Club.

Terry Kawaja, CEO of Luma Partners, explained the mentality of a new generation of marketing leaders this way: "The nature of the person who controls ad budgets at Airbnb is not a chief marketing officer. They're a growth officer. They're a revenue person."

Jackson Jeyanayagam, CMO of the e-commerce startup Boxed, said there's often another factor at play for these disruptive brands. Many are backed by venture capital.

"Digital is the best way to track exactly what you're going to get," he said. "When you are spending other people's money, TV's very difficult to measure and justify."

If you're Casper, what's is the point of an upfront?

For decades, the big TV networks have been able to sell roughly 70% of their annual ad inventory during just a few short weeks in the spring, at the so-called upfront. Marketers like Unilever wanted to lock up ad space, get preferred rates and importantly, not get shut out, since the amount of ad space in linear TV is finite. There are just 24 hours in a day after all.

So you can see why they'd be hesitant to change their approach.

But direct brands don't think ahead that way. They buy ads online where there's always plenty of inventory. And they buy at the last minute.

"The upfronts were built on the idea of scarcity," said prominent media investor and former top News Corp and AOL executive Jon Miller. "If you wanted to secure the best environment and context for your messaging, which for a long time was adjacent to high quality TV, you needed to participate in the upfront."

But on platforms like Facebook and Google, marketers buy ads through programmatic tools, and space is sold via an auction, not upfront.

"Some of the larger brands will continue to need this kind of lock in, but many if not most brands will and are gravitating to a pay as you go model," said Miller.

Booking.com is a big-budget direct brand that actually does some TV advertising. But upfront buying? "Probably never will unless TV's ad tech fundamentally changes," said Pepijn Rijvers, chief marketing officer at Booking.com

"This type of buying does not give us the flexibility nor the inventory nor the prices we need."

Advertisers still buy ads in shows like "NCIS: New Orleans" upfront CBS

TV advertising is not a platform

The fundamental difference between TV advertising and digital is that TV ads are sold, while digital ads are purchased. Meaning that the bulk of TV advertising is still negotiated between ad buyers and sellers on the phone and over lunches.

Compared to Facebook, Google, Pinterest and others, there's no way for a small brand to log onto a self-serve platform and start buying primetime ads on Fox. The process is largely analogue, and the cost of entry is high.

Yes TV advertising is changing. Just slowly

To be sure, all of the major TV networks are experimenting with selling more ads using sophisticated data. For example, Disney announced recently the formation of a new division, Luminate, focused on helping bring more sophisticated targeting to its networks.

And CBS announced plans to use tech to insert ads dynamically into live TV, a la digital advertising.

Turner, NBCU, Fox and Viacom are working together on an initiative called Open AP which aspires to help marketers better define specific audiences to run ads against.

But these initiatives are tiny in the grand scheme of things. According to eMarketer, addressable TV advertising (which uses cable boxes to deliver ads to specific households) is growing fast, but represents less than 2% of the US market.

"The scale is just not there yet," said Courtney Lawrie, director of brand & integrated marketing at Wayfair.

Jeyanayagam, who before joining Boxed ran digital marketing for Chipotle, said he's excited about the potential of more automated, targeted TV ad buying.

"The networks are more progressive than they get credit for," he said. "But they are going to have to move faster."

A Microsoft data center. Microsoft

There's also the Amazon factor

Ok, so new brands are not drawn to TV upfront buying. But plenty of legacy giants still are. Procter and Gamble and Unilever and others still need to sell paper towels and kitchen cleaners and the like to the whole country.

So that's a win for the TV ad business. That is, "until you just buy all that stuff on Amazon," said digital ad veteran Eric Bader.

"I really have to question whether the P&Gs, Unilevers, and multi-brand conglomerates are prepared for the next decade," he said. "They are mostly still using the formula developed over the last 70 years. These changes are significant and they are not changing fast enough."

Jeramey Lende / Shutterstock.com

But wait. This could be good for the TV networks - someday

Kawaja sees a huge opportunity for TV, if it can eventually embrace opening up its ad sales process to technology as more people stream TV shows over the internet."You may see a democratization of TV ad spending," he said.

That may require the TV business to lower pricing in some areas, so that small brands can buy ads in piecemeal. Easier said than done.

Indeed, it would be a a huge mental shift for these networks, going from selling $10 to $20 million ad packages to a few hundred advertisers to letting thousands or even millions of brands buy ads on TV whenever they want, like they do on Facebook and Google

A scary plunge for sure, but one that could reduce operational costs, said Morgan. "That kind of platform buying will actually be very good for networks since their cost of sale will be much lower," he said. "They won't have commissions, bonuses and heavy customer service costs."

Small brands like the aforementioned Evereden would love to jump on board if TV goes fully programmatic some day. "This is the future of marketing," said founder Ho. "So 100% we'd be interested."

May 18, 2018

The Misty II pre-order campaign is in full gear, with Misty II selling at a discount of 50% of its retail price. It’s 90% of the way to the stretch goal, which unlocks some fun goods. So, if you want the Apple ][ of home robots, pre-order now and get another $100 off by using my referral code!

Ian Bernstein, the co-founder of Misty (and co-founder of Sphero), has a great teardown of Misty II. He walks through all the hardware components and then opens up Misty’s brain and body so you can see the hardware inside.

Kids love Misty II also. Here are six reasons why Misty II is perfect for education along with a short video of some kids playing around with and explaining why Misty II is awesome.

If you are a kid, have kids, or are a grown-up kid, you’ve got a few more weeks to get Misty II as part of the pre-order campaign. Discounts, goodies, and a chance to be part of creating the first real, usable home robot.

Also published on Medium.

The biggest game in the world is finally coming to the biggest mobile platform in the world — "Fortnite" is expected to arrive on Android phones this summer.

At least that's the plan.

"Fortnite" developer Epic Games is "targeting this summer" for the game's Android launch, and promises more information as soon as it's available. There's no hard release date, and it's not clear which Android phones are supported.

In the case of the iPhone, which got a version of "Fortnite" back in April, models going back to the iPhone 6S/SE are capable of running it. The equivalent on Android would mean flagship phones going back at least two years could potentially run the game — a Galaxy S7, for example, or Google's first Pixel phone. That remains to be seen.

Epic Games

It's likely that the Android version of "Fortnite" looks a lot like the iPhone version, in terms of graphics and control.

As seen above on an iPhone X, the controls are represented as virtual buttons on-screen. It's otherwise the same insane game you can play on PC, Mac, PlayStation 4, and Xbox One: A 100-player fight to the death in an environment that's getting smaller over time.

Though Epic Games hasn't said as much specifically, it's likely that the Android version will cost nothing to access like the other versions.

At 2 a.m. on Thursday, a crowd of people, mostly men, are lined up outside an exclusive burlesque nightclub, The Box, in downtown Manhattan.

"Who are all these people?" a dancer in spiky gold stilettos asks a security guard.

"There's some sort of cryptocurrency conference in town," he tells her.

"What the hell is cryptocurrency?"

"Like bitcoin and stuff," he says.

The group in question had just come from a cruise ship, the Cornucopia Majesty, where a pair of Aston Martins were awarded to two guests through random selection — glowing bracelets were distributed at the start of the cruise, and those lucky enough to receive the bracelets that glowed the longest were gifted the sports cars.

The crowd is visiting the city to attend Consensus, the sprawling blockchain conference that has attracted nearly 8,500 people.

Inside the club, where photos aren't allowed, women in corseted lingerie deliver bottles of vodka and Champagne to tables of reclining men in suits amid a fanfare of sparklers. Onstage, two naked women simulate fellatio as the crowd roars in approval. At one point, one of the women eats something seemingly designed to look like feces from the other's rear. A half-naked man wearing an enormous bear head gyrates against a woman whose breasts are ensconced in two clear plastic Madonna-style triangles. Bags of cocaine are passed underhand.

"If I offer you coke, do you promise not to write about it?" a woman asks.

The creator of an influential cryptocurrency explains the power of decentralized technology as a woman in a G-string undulates on the bar top beside us.

The mood is celebratory. Many of the people in attendance have gotten rich in the past decade through a technology often derided by the public. For many of them, the media's newfound captivation with cryptocurrencies is a form of validation: It is satisfying to be right.

As one man in attendance puts it: "Getting rich on crypto is something that most of us never expected. We weren't in it for the money. It's like, what do you do when you suddenly have a bunch of money that you never even thought you would have?"

For some, the answer to this question lies in an MDMA-fueled night of bottle service and entertainment at an exclusive adult club.

But for others, the money is a windfall to be spent on technologies that they believe will transform not only the internet, but the underpinnings of society itself.

Around 3 a.m., a nerdcore rapper who goes by the name YTCracker takes the stage to perform two cryptocurrency-themed rap songs, "Bitcoin Baron" and "Crypto Illuminati." He flew into New York expressly to perform at this event.

He raps:

Told you to snap up a modest position Of currency minted from factoring digits Which of you listened? Which of you listened?

In the red velvet booths below, his listeners raise glasses of Champagne.

"Blockchain is going to change the world, man," a man tells me, exuberant. "This is only the beginning."

While he's founded companies that are trying to define the future of transportation with electric vehicles, space exploration, and tunnels that would house high-speed transit systems, Elon Musk doesn't like flying cars.

During an event for his tunnel-digging company, The Boring Company, on Thursday, Musk explained why flying cars could be more trouble than they're worth. Musk said his biggest concerns are noise and the potential for a broken part to fall and hit someone on the ground.

"There will be zillions of these things flying all over the place and, inevitably, somebody's not going to service their car properly and they're going to drop a hubcap and it's going to guillotine somebody," Musk said. "And it's going to be noisy like a hurricane."

Musk has expressed similar concerns before, and believes it's better to address traffic congestion by building high-speed, underground transit systems like Loop and Hyperloop. On Thursday, Musk outlined how the Loop system might work.

Loop is a lower-speed alternative to Hyperloop, which was first proposed by Musk in a 2013 white paper. Hyperloop would be used for travel between cities, while Loop would carry passengers over shorter distances. Each would send passengers in pods through underground tunnel networks, but while Hyperloop pods would surpass 600 mph, Loop pods would travel at 150 mph due to differences in how the tunnels are pressurized.

On Thursday, Musk said Loop pods would hold 16 people. He also said a Loop system could be accessed by dozens of small stations that would transport passengers underground and take up as much space as a parking spot. Rides could cost as little as $1.

Some of Musk's competitors are developing aircraft that resemble flying cars. In early May, Uber unveiled a flying taxi prototype for its upcoming Uber Air service, which will transport passengers between rooftop landing pads the company refers to as "skyports." Uber intends to test the service in 2020 in Dallas and Los Angeles and begin offering commercial rides in those cities in 2023.

In an interview with CBS This Morning Uber CEO Dara Khosrowshahi said Uber plans to make Uber Air "affordable for normal people."

On Friday, Elon Musk offered more detail on The Boring Company's plan to dig tunnels for high-speed transportation beneath numerous major freeway arteries in Los Angeles.

Let's cut to the chase: The Boring Company's master plan is to "solve" the freeways by connecting all the cool places in town where relatively affluent Angelenos live and travel to, while also serving travelers who use the LAX and Long Beach airports. The idea is create a "Loop" system that could carry passengers and possibly cars.

The longest tunnel, as conceptualized, would connect Sherman Oaks to Long Beach, essentially creating a private thoroughfare that follows the path of the 405 freeway (coincidentally, Musk's commuting route takes him from his Los Angeles home in Bel Air to the SpaceX headquarters in Hawthorne, which is a small municipality south of downtown Los Angeles and east of LAX, off the 105 freeway).

I lived and drove in Los Angeles for a decade, and, like Musk, I was often trapped in the circle of hell that the 405 can become during rush hour. But I also breezed along the freeways at times when traffic was limited.

Cool — if you live in Bel Air (between Sherman Oaks and The Getty) and need to get to Hawthorne. The Boring Company

It's worth noting that the Loop plan mirrors what Angelenos already have on the mass-transit front with the Metro rail system. But Metro trains can't go 150 mph and aren't routinely ridden, I'm assuming, by Musk.

Metro

The Los Angeles traffic problem is really one of 20th-century economic and business priorities colliding with population growth and geography.

Los Angeles isn't really a traditional city — it's a cluster of towns linked by a freeway system. None of this was planned; it just developed over a century. So Dodger Stadium, which should be someplace over by the beach, is instead tucked into a hard-to-access ravine north of downtown. Hollywood is blocked from the San Fernando Valley by a mountain. Downtown itself has to share "downtown" credentials with parallel downtowns on the Westside (Century City) and in the Valley. And don't get me started on how this sprawling, extemporaneously assembled "city" is now also linked to nearby urbanizing regions, such as the San Gabriel Valley to the east and to Orange County to the south.

The freeways addressed this geographical challenge — until they didn't. The big issue now is that the places where people work in Los Angeles are often not near where they live. This is especially true for poorer Angelenos, but it's also true for rich people such as Musk. The billionaire's rocket factory is just 18 miles from his house, but when the 405 gets gnarly, the drive can consume hours.

The solution isn't a multibillion-dollar tunnel system, even if high-speed rides cost just $1 (as Musk said they would). The solution is to abandon the 20th-century scheduling preoccupation that clogs Los Angeles' freeways from 7 a.m. to 10 a.m. and 4 p.m. to 7 p.m. Workplace flextime and telecommuting for those who are able (which, for Los Angeles' creative-class workforce, is a lot) would spread traffic volumes out over the entire day.

There's some research indicating that more telecommuting may reduce congestion only marginally (and bring some unintended consequences), but anything Los Angeles can do to get people off the roads and keep them staying closer to home would be a low-cost undertaking worthy of pursuing. In many cases, it may liberate the freeways for workers whose financial situation compels them to drive and alleviate some of the infamous "negative externality" problems related to public roads that are free for all to use.

As proposed, The Boring Company's plan looks like what we're seeing more and more of these days when it comes to transportation: a pay-into-it system for those who can afford these extra costs to avoid hassles, and a broken or stressed-out existing system for everybody else.

Signal Snowboards has created a one-of-a-kind board that lights up the slopes with LEDs on the bottom. Check out a behind-the-scenes look on how the board was constructed. Following is a transcript of the video.

LED. Snowboard.

Snowboard company Signal wanted to build a board like no other. They settled on a programmable LED board. It can display whatever you want. PAC-MAN anyone?

Mark Rosolowski: That is so sick.

Bystander: Yes! Oh my God. This is cool.

The build had its challenges. The entire base of the board had to be covered in LEDs.

Dave Lee: This is the base — the beginning of the base that Mark showed me and if you can kind of see his computer screen, that is a lot of cutting. Which means that's a lot of lights and that's a lot of soldering.

Here's how they did it.

First Attempt

Mark Rosolowski: I saw a shock.

Dave Lee: What's that mean?

Rosolowski: I saw a little spark. It shorted. Wire went into another wire somewhere.

[Bystander]: Nothing

Lee: Nothing.

[Bystander]: Nada.

Lee: Let's go back to soldering.

[Weak laughter]

Lee: It was a crazy night. We had everything going for us. We were champions. We had this thing done. And then you pull it out, everyone's still excited, you go, and you touch the points, and you got nothing. And that's how it goes. These one-offs. This crazy idea, where you try it for the first time, it's not always gonna work. But, we rally, we do it again, and we're gonna make it work.

But it was worth it in the end.

Second Attempt

Dave Lee: OK.

[Cheers]

Lee: Woo! Nice. How good do you feel right now?

[Bystander]: Like, honestly. Amazing dude.

Lee: It looks insane. What's crazy is you'll look up on it, like this, and it's really hard to see. You step back, and it's super clear. We're running a video right now. It's crazy. So, next step, we go ride it.

Google Cloud is hustling hard to sign on large enterprise customers as the company works to close the gap with the leading Amazon Web Services and the second-place Microsoft Azure.

So it's a solid feather in Google's cap that Credit Karma, a well-known personal-finance service with 80 million users that's said to be valued at $4 billion, is moving the entirety of its data-processing services to Google's Cloud in a project expected to be completed by the end of the year.

It should be noted that Credit Karma relies on Amazon Web Services for some of its corporate applications. But for data processing, Credit Karma is already using the Google BigQuery data-crunching tool, and now plans to use it even more.

Overall, Credit Karma says it does 8 billion predictions a day based on its data to recommend credit cards and other financial products to its customers.

Of the decision to bet on Google's data tech, Credit Karma CTO Ryan Graciano told Business Insider, "It really feels like Google is a step ahead."

He added: "So why don't we leverage their infrastructure?"

Credit Karma was founded in 2007, when there "wasn't as much cloud," Graciano said. Amazon Web Services was in its infancy, and Microsoft and Google hadn't yet gotten into the cloud business. As such, Credit Karma's only real option was managing and maintaining its own servers in its own data centers, something it does a lot of today.

"We have a fair amount of physical infrastructure," Graciano said.

The conventional wisdom holds that much of the move toward cloud computing comes from a desire to cut costs — it's a widely held belief that it's cheaper to host servers from the mega-efficient platforms run by Amazon and others than it is to keep your own.

Diane Greene, Google's cloud boss. Google

That's not the case with Credit Karma though, according to Graciano. The real value, he says, is that Google Cloud makes it way faster for Credit Karma engineers to build, test, and deploy new concepts and updated models.

About half of Credit Karma's workforce of more than 700 people are engineers of some type, so those productivity gains add up very quickly, he says.

"It's all about developer efficiency," Graciano said. "I can try to cut costs on servers, or I can make those people way more efficient."

Where before a new service or model might take two years to see the light of day on Credit Karma's old systems, Graciano boasts that the turnaround time now could be two days.

"That's way better than 2% savings in capex," says Graciano, referring to the capital expenditures needed to maintain a data center.

He says there was some initial pushback on the project from some of the Credit Karma engineering staff members, especially from those who had worked closest with the data centers and server infrastructure. But as the project has progressed and they've seen those productivity gains, Graciano says they've come around.

It'll be a while before Credit Karma moves everything over to the cloud, Graciano says, just because there's so much data there — the company collects 8 to 9 terabytes of data a day, all of which has to be accounted for and migrated.

Still, the goal is for Credit Karma to be 100% based in the cloud. At that point, the data centers could shut down.

"We have this vision of getting to cloud as kind of this final, major step," Graciano said.

Once Credit Karma gets all its data processing into the cloud, it plans to take advantage of other Google Cloud tech, particularly around artificial intelligence, Graciano says. Credit Karma already does a lot of predictions; Google's AI could help it do more, and faster, he says.

"I want them to keep innovating there, because I want to take advantage of those things," he said.

Graciano praises the experience of working with Google but demurs when asked whether this means Credit Karma will ditch Amazon Web Services and go all-in on Google Cloud.

"I think it's too early to call," he said. "We want to see this project through."