Microsoft Is Buying Nuance For $19.6 Billion In Massive Bet On Healthcare AI Technology

Plus, Fed Chairman Powell said the U.S. economy is at an “inflection point” in an interview this weekend, Apple is reportedly building a new Apple TV device, and Uber reported record gross bookings in March.

Stocks were lower at the open on Monday with the Dow dropping 25 points, or less than 0.1%. The S&P 500 slid 0.1%, while the Nasdaq opened 0.3% lower.

Microsoft is buying Nuance Communications for $19.6 billion, making a huge bet on health-care artificial intelligence. The software giant announced it will pay $56 per share for Nuance in an all-cash deal, and marks Microsoft’s largest acquisition since LinkedIn. Microsoft CEO Satya Nadella said in a tweet, “AI is technology’s most important priority, and healthcare is its most urgent application. Together with Nuance, we will put advanced AI solutions into the hands of professionals to drive better decision-making and create more meaningful connections.” Wedbush analyst Dan Ives said in a note that the “Nuance deal would be a trophy for” Microsoft. “Nuance is in the midst of an unprecedented strategic turnaround the last few years under the leadership of CEO Mark Benjamin and we believe the company represents a unique asset on the health care front for Microsoft,” Ives said. 

Auto and tech CEOs get their chance today to make their pleas for chips to President Joe Biden. More than a dozen chief executives, including General Motors CEO Mary Barra, Ford CEO James Farley Jr., and Alphabet CEO Sundar Pichai will participate in a virtual summit with top Biden administration officials to discuss the global semiconductor shortage that has idled automakers worldwide. While White House officials have previously said there is no short-term fix for the shortage, the meeting is a signal that the administration is serious about addressing supply chain constraints and softening the blow for the companies and workers affected. “We hope in the meeting, whoever is gathered there will get an understanding of how we get to where we are fulfilling 100% of orders and provide a road map of what that looks like,” said Matt Blunt, president of the American Automotive Policy Council, which lobbies for Ford, General Motors, and Stellantis NV (formerly Fiat Chrysler).

Federal Reserve Chairman Jerome Powell said the U.S. economy is at an “inflection point” with stronger growth and hiring ahead thanks to rising vaccinations and massive policy support, but warned COVID-19 is still a threat. “We feel like we’re at a place where the economy is about to start growing much more quickly and job creation coming in much more quickly,” Powell said on CBS’s “60 Minutes” which aired on Sunday. “The outlook has brightened substantially. And that’s the base case. I would say again though, there really are risks out there. The principal risk to our economy right now really is that the disease would spread again. It’s going to be smart if people could continue to socially distance and wear masks.” Powell also added, “I think it’s highly unlikely that we would raise rate anything like this year year. I’m in a position to guarantee that the Fed will do everything we can to support the economy for as long as it takes to complete the recovery.”

Apple is reportedly in the early stages of building a new Apple TV device that would combine the set-top box with a HomePod speaker and include a camera for video conferencing through a connected TV, in addition to other smart-home functions. The device’s other capabilities will also include standard Apple TV box functions like watching video and gaming plus smart speaker uses such as playing music and using Apple’s Siri digital assistant, and would represent Apple’s most ambitious smart-home hardware to-date if launched. People familiar with the matter also said that Apple is also considering the launch of a high-end speaker with a touch screen to better compete with market leaders Google and Amazon, with the device combining an iPad and HomePod speaker.

And Uber shares are up nearly 3% this morning after the company posted record gross bookings in the month of March, signaling a pickup in demand for its ride-hailing business. Uber said in a filing with the SEC that its mobility unit, which handles ride-hailing services, passed $30 billion in annualized gross bookings run rate through March, with average daily bookings rising 9% from February. “As vaccination rates increase in the United States, we are observing that consumer demand for Mobility is recovering faster than driver availability, and consumer demand for Delivery continues to exceed courier availability,” Uber said in the filing with the SEC. 

Stocks We’re Watching

Affimed N.V. (NASDAQ: AFMD): Affimed announced today pre-clinical data on its Innate Cell Engager (ICE) AFM24 as mono therapy and in combination with adoptively transferred NK cells. “AFM24’s novel mechanism of action is independent of EGFR signaling and has the potential to change the treatment paradigm for EGFR-expressing solid tumors,” said Dr. Arndt Schottelius, Affimed’s Chief Scientific Officer. “Demonstrating that AFM24, in combination with NK cells, shows tumor regression in vivo is an important pre-clinical proof of concept. Combination therapies with NK cells could broaden the potential AFM24 opportunities to treat a range of EGFR-expressing malignancies.”