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TD Cowen Reviews ADP as Segment Performance Diverges

Automatic Data Processing, Inc. (NASDAQ:ADP) is included among the Dividend Growth Stocks: 25 Aristocrats.

TD Cowen trimmed its price objective on Automatic Data Processing, Inc. (NASDAQ:ADP) on January 29 to $255 from $263. The firm also kept a Hold rating on the stock, noting ADP continues to perform well in its Employer Services business, but softer results in the PEO segment are raising some caution. TD Cowen added that broader pressures across the sector are still weighing on the outlook.

That cautious stance comes even after a better-than-expected quarter. A day earlier, on January 28, ADP raised its full-year revenue forecast and beat profit estimates, supported by steady demand for payroll and HR services. Second-quarter revenue came in at $5.36 billion, slightly ahead of the $5.34 billion analysts were expecting, based on data from LSEG. Adjusted earnings were $2.62 per share, topping the consensus estimate of $2.57.

Following the results, ADP said it now expects revenue to grow about 6% for the year, which sits at the upper end of its previous guidance range. The company’s U.S. pay-per-control metric, which reflects how many employees are on client payrolls, rose 1% from a year ago, in line with trends seen over the past few quarters.

The labor market backdrop remains mixed. Layoffs are still relatively limited, but hiring has slowed noticeably, which could temper growth going forward.

Automatic Data Processing, Inc. (NASDAQ:ADP) provides cloud-based human capital management solutions through its Employer Services and Professional Employer Organization segments.

While we acknowledge the potential of ADP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ADP and that has a 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 13 Companies that Just Started Paying Dividends and 10 Best Monthly Dividend Stocks to Buy Now

Disclosure: None.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

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It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

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