Category: Shareverse

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New UK British ISA announced in the March 2024 budget

British ISA

The new UK British ISA 

UK chancellor Jeremy Hunt revealed the British ISA as part of the Spring Budget 2024.

The British ISA aims to boost demand for UK businesses and encourage investment in UK-focused assets.

Key Features

Additional Allowance

The British ISA provides a separate £5,000 annual allowance in addition to the existing £20,000 ISA allowance.

Tax Advantages

Like other ISAs, investors in the British ISA will not pay tax on capital gains or income.

Investment Focus

While it’s not yet clear whether the new ISA will be exclusively for UK shares, it is expected to support UK-focused funds and investment trusts.

Eligibility Uncertainty

The inclusion of UK gilts or UK corporate bonds remains uncertain.

Consultation Period

The consultation period for the British ISA runs until June 6, 2024.

Potential Impact – Reviving UK Stock Market

The British ISA aims to revive interest in the UK stock market, which has faced challenges since the Brexit vote in 2016.

Supporting UK Companies

By providing tax-free savings opportunities, the ISA encourages investment in UK businesses.

Fund Industry Support

Fund management firms, including Premier Miton, lobbied for the British ISA’s creation.

Historical Context

The British ISA draws parallels with its predecessor, the personal equity plan (PEP), which focused on UK shares and funds.

ISAs replaced PEPs in 1999.

Conclusion

In summary, the British ISA introduces an additional allowance for UK-focused investments, supporting savers and UK companies alike. Its impact on the stock market and investor sentiment remains to be seen, but it represents a step toward bolstering the UK’s economic landscape

By ensuring that companies are valued fairly, a stronger stock market will facilitate the capital raising process for companies that seek to grow and attract more listings. This will have a positive impact on the economy and employment and is ultimately in everyone’s interest.

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Is AI driving a market bubble or is there so much more yet to come?

Tech bubble

As tech giant Nvidia soars on hype around artificial intelligence (AI), and as global stock indexes claim record highs, debate has grown about whether the stock market has entered a ‘bubble.’

An AI bubble of boom

We are reminded of the dotcom bubble where investment was rife in anything tech – so, are we now potentially facing a new tech bubble – an AI bubble of boom?

That’s generally seen as a period in which asset prices inflate rapidly, potentially beyond their core value; and risk crashing just as fast.

Other AI stocks are chasing the dream too adding to the hype. However, some are in the slow lane playing catch-up and this may suggest there is much, much more to come.

The likes of AMD, Intel, Amazon, OpenAI, Arm and a myriad of other tech companies big and small have much more AI to bring to the tech table.

Let’s use Nvidia as an example of a potential stock bubble

If we look at the valuation of Nvidia, justifiably it is actually very high, too high even – that’s the first sign of a potential problem, valuation. The second issue is investor positioning – whenever you have a market bubble, investors are very clustered or very concentrated, either in one market or in one sector as a whole.

Nvidia one year chart as of 29th February 2024. Price 791

Nvidia one year chart as of 29th February 2024. Price 791

Sectors

It doesn’t matter which markets you look at – the U.S., Europe or Asia markets – the problem is the same. We now have an historic valuation between the tech sector, the AI sub-sector of the tech sector, and the rest of the market.

Investors are very clustered in this tech sector. However, some leading commentators say of tech that this is not hype – this is real. It most probably is, for now, and with much more to come from the smaller tech and AI companies that have yet to show their true AI value. But all bubbles burst in the end.

Pop!

There is certainly plenty of room for AI to grow – it’s in its infancy – but the question is: ‘how and when will the bubble burst? Because, in my humble opinion, it most certainly will.

We may not see a dramatic market crash like 1999-2000 or 2007/2008, but an investor rotation out of areas of concentration into the broader market will likely happen.

If you look at the bubbles of 1999-2000, and then in 2007/2008, one key characteristic was investor leverage. And we had, whether it was retail investors or institutional investors, a very high level of leverage, and that was either through borrowings or it was through derivatives.

The AI tech boom has legs but there will almost inevitably be a rotation from AI to other sectors – that will then adjust the overvalued AI sector. And it could pullback quite hard.

Be ready!

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Intuitive luna lander reportedly tipped over, share price falls

Moon

Intuitive Machines initially reported Odysseus was standing upright. But in an update on Friday 23rd February 2024, the company reported they believe the spacecraft caught its landing gear sideways in the moon’s surface while touching down and tipped over.

Intuitive Machines’ cargo lander, Odysseus, returned its first images from the moon’s surface over the weekend.

Historic achievement

The company’s historic IM-1 mission is now operating on the moon after landing on Thursday 22nd February 2024, becoming the first privately developed spacecraft to soft land on the lunar surface.

Despite resting on its side, Odysseus is still sending back data. Intuitive Machines expects Odysseus to operate until Tuesday morning, when its solar panels will no longer be exposed to the sun.

Intuitive Machines’ stock fell 35% in trading on Monday 26th February 2024 to close down at $6.27 a share.

Artist’s impression of Intuitive Machines luna lander on the moon
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Nikkei breaks new ground hitting new all-time high!

New record high!

Japan’s Nikkei 225 index hit a new all-time high on Monday 26th February 2024. In contrast China markets slipped after a nine-day winning streak.

The Nikkei 225 ended 0.4% higher at 39233 comfortably above its previous closing record of 39,098.68. The index breached its 1989 all-time high of 38915 on Thursday 22nd February 2024.

Nikkei 225 hit new all-time high Monday 26th February 2024 – one year chart

Nikkei 225 hit new all-time high Monday 26th February 2024
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Rolls-Royce shares up10% after 2023 profits more than double

Jet engine

Rolls-Royce, a prominent jet engine manufacturer for commercial aircraft along with power systems for ships and submarines and other major projects posted an underlying operating profit of £1.6 billion in 2023, compared to £652 million in 2022.

Rolls-Royce was the top performer in the UK’s FTSE 100 in 2023, climbing over 200% on the back of a profit forecast upgrade and the announcement in November 2023 that profits ‘could‘ quadruple by 2027.

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S&P 500 hit new all-time high and Nasdaq closing in on record

S&P 500 new high

The S&P 500 surged to a new all-time high on Thursday 22nd February 2024

Microchip maker Nvidia reported much stronger-than-expected quarterly results, lifting tech sector and markets higher.

S&P 500

The S&P 500 gained just over 2% to close at 5087, notching its best day since January 2023. The Nasdaq Composite advanced 2.96% for its best day since February 2023, closing at 16041 and ever closer to its all-time high.

Nasdaq

The tech-heavy index is very close now to its all-time closing high of 16,057.44.

Dow

The Dow Jones Industrial Average surged 456 points to surpass 39000 for the first time ever and close at a new high of 39069.

Other tech names were also higher. Meta and Amazon gained about 3.9% and 3.5%. Microsoft and Netflix each advanced more than 2%.

Nvidia driving tech gains

Shares of Nvidia climbed around 16% to an all-time high after the company said total revenue rose a massive 265% from a year ago.

Nvidia, which has become one of the largest U.S. companies by market capitalization, also forecast another stellar revenue gain for the current quarter.

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Nvidia revenue is up 265% latest figures show and stock gains 15%

AI chip

The excitement surrounding artificial intelligence (AI) technology appears to show few signs of abating

The technology company at the heart of the AI chip boom reported its Q4 earnings after the stock market’s close on Wednesday 21st February 2024, beating expectations for both earnings and sales. The company’s total revenue is up 265% from a year ago.

Investors are looking to Nvidia’s latest quarterly earnings report to see whether the company’s meteoric growth can last.

Nvidia one year share price as at 22nd February 2024

Nvidia one year share price as at 22nd February 2024

AI chips

Nvidia makes powerful computer chips that power popular AI tools like OpenAI’s ChatGPT and Microsoft’s Copilot. High demand for those chips has propelled the company into the exclusive trillion-dollar club.

As of market close on 21st February 2024 the company’s market cap sat at $1.667 trillion, putting it behind Alphabet’s $1.779 trillion market cap. It’s also behind Microsoft and Apple, which hold market caps of $2.988 trillion and $2.819 trillion, respectively.

Nvidia’s stock price has been on an upward trajectory so far this year. Shares have gained by nearly 40% since the beginning of 2024. On top of that, they’ve soared by over 225% in the last 12 months.

Although short-term demand for Nvidia’s AI chips has been strong, major companies such as Microsoft and Meta have indicated interest in buying them from other companies.

If you had invested $1,000 in Nvidia

If you had invested $1,000 in Nvidia five, 10 or 24 years ago, here’s how much your investment would be worth now.

$1,000 in Nvidia five years ago, your investment would have increased by an eye-watering 1,015% and be worth around $17,542 as of 20th February 2024.

If you had invested $1,000 in Nvidia 10 years ago, your investment would have soared by about 22,340% and be worth around $148,226 as of 20th February 2024.

But, if you had invested $1,000 in Nvidia in January 1999, when Nvidia first went public, your investment would have grown by around 277,708% and be worth close to $2,784,065 as of 20th February 2024.

AI has only just started.

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Japan’s Nikkei crosses 39000 barrier for the first time

Nikkei 225 index

Japan’s Nikkei 225 hit a record high of: 39098 on Thursday 22nd February 2024.

The rally was propelled by electronics, banking and consumer stocks as robust earnings and investor-friendly measures fuel a blistering rally in Japanese equities.

The Nikkei 225 jumped 2%, surpassing the previous record high of 38,915.87 reached in 1989.

Standout performance

Both the Nikkei and the broader Topix have been standout performers in Asia up more than 10% so far in 2024 after surging more than 25% in 2023. Their best annual gains in at least a decade.

Japan Inc’s solid third-quarter corporate earnings have prompted Bank of America analysts to upgrade their 2024 year-end forecasts for the Nikkei 225 to 41000 from 38500. They raised their forecasts for the Topix to 2,850 from 2,715.

The rally has also been supported by a weaker yen.

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Magnificent 7 company profits now exceed almost every country in the world

Magnificent Seven market cap at $15 trillion

The Magnificent Seven, or MAMA ANT, is a term coined by Bank of America to describe the seven most dominant tech companies in the world

The Seven are: Microsoft, Amazon, Meta Platforms, Apple, Nvidia, Tesla, and Alphabet. These companies have not only led the tech sector in terms of innovation, growth, and profitability, but have also become some of the most valuable entities in the world by market capitalization.

Valuation at $15 trillion

Market capitalization, or market cap, is the total value of all the shares of a company that are traded on the stock market. It reflects the market’s perception of the company’s future prospects and earnings potential. 

As of January 2023, the Magnificent Seven had a combined market cap of about $15 trillion, which was more than the gross domestic product (GDP) of almost every country in the world, except for the United States, China and Japan (just).

Magnificent Seven

The Magnificent Seven have achieved such a remarkable feat by leveraging their core competencies in various fields of technology, such as artificial intelligence (AI), cloud computing, social media, e-commerce, gaming, electric vehicles, and online advertising. They have also diversified their revenue streams by acquiring or developing new products and services, such as Activision Blizzard, AWS, Oculus, iPhone, GeForce, SpaceX, and YouTube. They have also benefited from the increased demand for digital solutions amid the Covid-19 pandemic, which accelerated the adoption of online platforms, remote work, and entertainment.

Challenges

However, the Magnificent Seven also face some challenges and risks that could threaten their dominance and valuation. These include increasing competition from other tech companies, especially from China, such as Alibaba, Tencent, Baidu, and Huawei.

They also face regulatory scrutiny and pressure from governments and consumers over issues such as antitrust, privacy, taxation, content moderation, and environmental impact. Furthermore, they may encounter technical difficulties, security breaches, or ethical dilemmas that could damage their reputation and customer trust.

Conclusion

In conclusion, the Magnificent Seven are the most powerful and influential tech companies in the world, and their market cap surpasses that of almost every country in the world.

List of 10 countries by stock market capitalization

List of 10 countries by stock market capitalisation

The meteoric rise in the profits and market capitalisations of the Magnificent 7 U.S. tech giants: Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla – outstrip those of all listed companies in almost every G20 country. Of the non-U.S. G20 countries, only China and Japan (and the latter, only just) have greater profits when their listed companies are combined.

They have achieved this by exploiting their competitive advantages in various domains of technology and expanding their offerings and markets. However, they also need to overcome some challenges and risks that could hamper their growth and value in the future.

A forced size reduction to stop the monopolising of market share could help tame these beasts too and open up fairer competition.

Should we worry?

Basically, yes, we should be concerned about the size and dominance of these companies.

This level of wealth and power concentrated in just a handful of companies has led some analysts to voice concerns over related risks in the U.S. and global stock markets.

Economists and stock market analysts have cautioned that the U.S. stock market is rivalling 2000 and 1929 in terms of being at its most concentrated in history.

The rest is history…

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Coinbase makes some profit – the first in two years

Crypto platform

Shares of cryptocurrency exchange Coinbase soared 12% Friday 16th February 2024 after the company reported its first profit in two years.

Coinbase, the largest U.S. venue for buying and selling cryptocurrencies, said that net income totalled $273 million in Q4.

This is the first time that the company has reported positive net income since the fourth quarter of 2021.

Net revenue

Coinbase reported its net revenue was $905 million in the Q4 of 2023, up almost 50% from $605 million in the same period of the previous year.

Bitcoin ETFs

Cryptocurrencies saw a huge amount of interest from investors in the fourth quarter of 2023, following news of the U.S. Securities and Exchange Commission approving the first Bitcoin exchange-traded funds (ETFs).

Bitcoin ETFs enable retail investors to access the cryptocurrency as a share that’s traded on a regulated exchange without directly exposing them to the underlying asset.

The news has driven demand for cryptocurrencies due to anticipation that it could drive interest from retail investors.

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Jeff Bezos sells nearly 12 million Amazon shares worth $2 billion

2 billion

Jeff Bezos filed a statement indicating his sale of nearly 12 million shares of Amazon stock worth more than $2 billion

The Amazon executive chairman notified the U.S. SEC – Securities and Exchange Commission of the sale of 11,997,698 shares of common stock on the 7th and 8th February 2024.

The collective value of the shares of Amazon, which is based in Seattle where he founded the company in a garage around thirty years ago, was about $2.04 billion.

More to come

In a separate SEC filing, Bezos listed the proposed sale of 50 million Amazon shares on or around 7th February 2024 with an estimated market value of $8.4 billion.

Taxing decision?

Jeff Bezos moved from Seattle to Miami in November 2023, shortly before he announced his plan to sell up to 50 million Amazon shares by January 2025. 

Florida does not have a capital gains tax, unlike Washington state, which imposes a 7% tax on any gains of more than $250,000 from the sale of stocks and bonds. Therefore, by moving to Florida, Bezos could save up to $600 million in taxes on his stock sale – more than enough for a luxury yacht and 2 or 3 more luxury properties.

But, of course, we do not know if this was the real reason for his move.

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Arm taking its place in the AI race

AI chip stock up

Arm’s strong growth forecast has led investors to declare it an AI darling

Arm shares soared 29% on Monday, extending last week’s rally as investors continue to applaud the chipmaker’s better-than-expected third-quarter earnings and its position in the artificial intelligence boom.

Up 93% since 8th February 2024

Arm is now up 93% since it reported quarterly figures on 8th February 2024. There is no obvious reason for the 29% climb on Monday. The fear of missing out (FOMO) could be playing a part in the meteoric share price move.

The stock has almost tripled since Arm’s initial public offering in September 2023, closing at $148.97 and is now worth almost $153 billion, that’s a little more than $30 billion below Intel’s market cap.

Arm 1 year chart showing huge gain in February 2024

Arm 1 year chart showing huge gain in February 2024

AI demand fuels Arm’s success

Last week, Arm said it could double the price for its latest instruction set, which accounts for 15% of the company’s royalties, suggesting it can expand its margin and make more money off new chips. It also said it was breaking into new markets, such as cloud servers and automotive, due to AI demand.

Its royalty strength combined with Arm’s optimistic growth forecast has made the company the latest AI darling among investors, despite a higher earnings multiple than Nvidia or AMD.

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Nasdaq 100 hits new all-time high of 17962

Chart up

The index continues its march breaking all-time records on its way

The index continues on its march breaking all-time records on its journey

Nasdaq 100 climbs to new record 9th February 2024

A solid earnings season, easing inflation data and a resilient economy have charged 2024′s market rally. It has helped propel the Nasdaq 100 to close at these new highs!

We are enjoying good news at an economic and earnings level, and the market is reacting positively. The longer the good news story plays out, the more likely it will be that the market will hold from here.

FOMO or the fear of missing out is likely playing its part here too.

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S&P 500 closes above 5000 for the first time

Stoks chart up

The S&P 500 climbed to a new all-time high of 5026 on 9th February 2024

Stocks rose on Friday 9th February 2024 after December’s revised inflation reading came in lower than first reported, and the S&P 500 closed above the key 5,000 level as strong earnings and economic news came in.

A solid earnings season, easing inflation data and a resilient economy have charged 2024′s market rally. It propelled the S&P 500 to close above the 5,000 level after first touching the milestone during the trading week. The index first crossed 4,000 in April 2021.

We are enjoying good news at an economic and earnings level, and the market is reacting positively. The longer the good news story plays out, the more likely it will be that the market will hold from here.

But it won’t take much to spoil the party, right now I don’t know what that might be…?

S&P 500 1-year chart 9th February 2024 – new all-time high of 5026

S&P 500 1 year chart 9th February 2024 – new all-time high of 5026

FOMO or the fear of missing out is likely playing its part here too.

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Japan’s stock markets are on a tear but are the Zombies coming?

Nikkei 225 index

After a decade-long bull run throughout the 1980’s, the Nikkei 225 index reached an all-time high of 38,915 on December 29, 1989, the last trading day of the year.

Few could have imagined, on New Year’s Eve of 1989, that the index would be lower 34 years later. As the New Year arrived, the bubble burst.

And now, Japan’s stock markets are on a tear and closing in on that elusive 38195 high of 1989 – but there’s a catch – the Zombies are coming.

Zombie companies

Zombie firms are businesses that are unprofitable and struggling to keep afloat. They don’t have excess capital to invest and grow the business, or to pay down the loan capital.

Concerns about zombie firms are coming into focus as the Bank of Japan is tipped to raise interest rates in 2024 for the first time since 2007.

It comes as the Nikkei 225 rises to its highest point in almost 34 years

Japan’s stock markets have been on a meteoric run since the start of 2023, repeatedly breaching 33-year highs and outperforming the rest of Asia.

However, there are rising concerns that so called ‘zombie’ firms, which are unprofitable and struggling to keep afloat, could cut short that rally. The Bank of Japan is widely expected to raise interest rates this year, and that could easily tip many of these firms into bankruptcy, which could have a broader impact on the economy and stock market,

Nikkei 225 1-year chart 9th February 2024

Nikkei 225 1-year chart 9th February 2024

Bankrupt businesses

Zombie firms are nothing new in Japan. They first emerged after the stock ‘bubble’ and subsequent crash of the 1990s, when banks continued to support companies that would have otherwise gone bankrupt. 

The pandemic of 2020 accelerated the problem of zombie businesses, with the number of zombie firms in Japan reportedly jumping by around 33% between 2021 and 2022. 

At the end of 2023, Japan reportedly had around 250,000 companies that are technically zombie businesses

Some experts argue that zombie firms are a drag on Japan’s productivity, innovation, and growth, as they occupy resources and crowd out more efficient firms. The debate on how to deal with zombie firms is ongoing and may have implications for Japan’s economic recovery and future prospects.

Others suggest that zombie firms may have a positive effect, such as preserving employment, social stability, and industrial diversity.

Surely, there is no room for inefficiently run businesses making little or no profit in any economy.

Watch out for the Zombies!

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All hail the rally?

U.S. stocks rally

U.S. stocks have had a good year in 2023, and a great start to 2024 with new record highs being set.

Many major indices have recorded double-digit gains. However, some analysts have warned that the rally may not last, as it has been driven by a few large-cap technology and growth stocks, while many other sectors and regions have lagged behind. 

A stock market rally is a broad and rapid rise in share prices, often defined as a 20% increase from a recent low. 

This could indicate a lack of breadth and sustainability in the rally, and potentially signal a market pullback, correction or even a crash in the future.

Bull bear, bull?

Chartists with their technical analysis might see a pattern that points to a substantial upside, but they should not get too carried away with their own observations, right now would be a sensible time for markets to find level ground, if only temporarily. 

The bullish view is that the ‘laggards’ should catch up the ‘mega cap’ stalwarts once again. The bearish view is that the ‘mega cap’ stocks’ will realise they’ve gone too far and need to ride back to the rest of the market. Too few stocks in the same sector hold the balance of power – go check out the Magnificent 7 or even the old FANG stocks.

Catch-up

Either way, there ought to be an opportunity for underrepresented sectors and industries to gain lost ground.

The question is, will there be a pause to allow laggards to catch-up, or will the mega caps simply continue on their march?

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S&P 500, Nasdaq 100 and Dow all hit new highs!

S&P 500, Nasdaq 100 and Dow all up at new highs!

The S&P 500 climbed again Wednesday 7th February 2024 and edged ever closer to the 5,000 level.

S&P 500 hit a new high of 4995

S&P 500 hit a new high of 4995 on 7th February 2024

The index, which first breached the 4,000 level in April 2021, added around 0.82% to close at 4,995.06. During session highs, the S&P hit 4,999.89. Quarterly results signalled a thriving U.S. economy.

The Nasdaq 100 jumped to a new high of 15,755

The Nasdaq 100 jumped to a new high of 15,755 on 7th February 2024

The Dow Jones Industrial Average rallied 156 points to close at 38,677 and an all-time high

DJIA closes at new high of 38677 on 7th February 2024

Euphoric

Are investors getting swept away with the latest wave of AI related tech results? Quite possibly, as some of what we’re seeing could be based on FOMO (fear of missing out) as traders/investors don’t want to be left behind like they were last year.

However, one undeniable fact is that the U.S. economy isn’t facing as recession any time soon as predicted by many.

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Happy days on Wall Street for BIG tech companies

Tech

It was a good day of earnings for Big Tech companies. 

Three of the Magnificent 7 results dominated the headlines: Meta, Amazon and Apple. Nasdaq and S&P 500 gained in ‘after the bell’ trading. This after a punishing day for Alphabet and Microsoft, despite good results.

Nasdaq 100 closed at: 17344 but climbed above 17500 in after-hours trading.

Wall Street seemed impressed with Meta’s results.

Meta

Shares of Meta surged 15% after the social-media giant defied analysts’ estimates. It posted earnings of $5.33 per share on revenue of $40.11 billion. The company also declared its first-ever dividend payment. Share buy-back was also announced.

Meta platforms Inc. One year chart

Meta platforms Inc. One year chart
  • The results show Meta’s online ad business continues to recover well from a terrible 2022.
  • Sales in the Q4 jumped 25% year on year.
  • Expenses decreased 8% year over year to $23.73 billion.

Amazon

Investors also enjoyed Amazon’s earnings, which easily topped Wall Street’s predictions. The ecommerce giant also provided a strong positive outlook. The stock jumped 7% in extended trading.

Amazon.com Inc. One year chart

Amazon.com Inc. One year chart

Q4 was a record-breaking Holiday shopping season in the U.S. and closed out a robust 2023 for Amazon. Amazon has much planned for 2024.

Apple

But Apple didn’t benefit from the same treatment despite posting strong results.

Apple Inc. One year chart

Apple Inc. One year chart

Apple also exceeded estimates, reporting revenue growth for the first time in a year. But shares slid more than 2% in extending trading after it posted a 13% decline in sales in China.

Apple’s outlook suggesting weak iPhones sales may have also disappointed investors.

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Microsoft and Alphabet report good numbers but Nasdaq slides.

Stocks

Nasdaq 100 futures declined around 0.75%. S&P 500 futures were also down around 0.4%

In after-hours trading, shares of Alphabet dropped more than 5%, while Microsoft slipped 2% after the tech giants, part of the Magnificent Seven posted quarterly earnings. However, both companies achieved on both top and bottom lines. However, advertising revenue for Alphabet came short of analysts’ expectations. 

Tech powerhouse

The tech sector powered the market rally from 2023 into 2024 and is now trading at a relatively high valuation of nearly 29 times its 2024 earnings, according to recent figures. Investors will need to see earnings expansion in order for the tech companies to be able to maintain their elevated levels.

Results were good but not good enough according to Wall Street as stocks were priced for perfection and that wasn’t delivered.

Even though the results were better-than-expected, investors are likely selling because they just want to take some money off the table.

Absolute perfection comes at a price on Wall Street.

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Microsoft hits $3 trillion market cap in intraday trading

Microsoft market cap of $3 trillion

Microsoft’s market cap surpassed $3 trillion in intraday trading Wednesday after the stock climbed more than 1% and hit around $404 per share. The stock lost some ground throughout the day to close at: $402 per share.

The achievement comes nearly two weeks after Microsoft eclipsed Apple as the world’s most valuable public company on 12th January 2024. However, Apple has reclaimed top spot – its market cap closed at around $3.01 trillion on Wednesday 24th January 2024.

Microsoft share price 24th January 2024 – $402.00, 1year chart

Microsoft share price 24th January 2024 – $402.00, 1 year chart

Microsoft shares are up more than 7% year to date as investors remain bullish about the company’s investments in artificial intelligence.

It is strongly expected that Microsoft will deliver good results in the Q2 earnings report, because of its leadership position gained in generative AI.

Microsoft due to announce Q2 figures on 30th January 2024

Microsoft due to announce Q2 figures on 30th January 2024
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Meta and Microsoft say they will buy AMD’s new AI chip – Wall Street loves Artificial Intelligence

AI microchips

Meta, OpenAI, and Microsoft said they will use AMD’s newest AI chip, the Instinct MI300X.

An indication that tech companies want alternatives to the expensive Nvidia graphics processors that have been essential for artificial intelligence (AI).

If the MI300X is good enough and inexpensive enough when it starts shipping early next year, it will likely lower costs for developing AI models.

AMD CEO Lisa Su projected the market for AI chips will amount to $400 billion or more in 2027, and she said she hopes AMD has a sizable part of that market.

Wall Street rallies on AMD and Google AI news

Wall Street resumed its rally after a short break as technology giants intensified their AI race, pushing up tech stocks.

When you witness Google launching a new AI model (Gemini) and AMD chasing a slice of the hot AI chip market, you know a pre-Christmas cheer will wash over investors.

To think, just a handful of years ago, other than in Science Fiction novels, the term ‘artificial intelligence’ didn’t exist in our vocabulary and now it is becoming more and more integrated with our day-to-day lives.

Stock markets love it. AI is fast becoming a business necessity and not just an option.

AI chip image
Wall Streets love affair with AI – how long will it last?
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Spotify to cut jobs

Music app

Music streaming service Spotify is laying off some 17% of its workforce, in a dramatic move aimed at reducing its costs and adjusting for a slowdown in growth, CEO Daniel Ek said Monday 4th December 2023.

It is reported Ek said Spotify invested too much in 2020 and 2021 and had to ‘rightsize’ its costs for a new economic reality.

Spotify reported a 65 million euros ($70.7 million) profit in the third quarter, citing lower spend on marketing and personnel.

The latest round of cuts is reported to equate to roughly 1,500 jobs – but this has not been confirmed by Spotify.

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Nvidia’s AI chip boom continues, latest figures show

Nvidia AI chip

Nvidia’s revenue grew 206% from year 2022 during the quarter ending 29th October 2023, according to data from Nvidia.

Net income, at $9.24 billion, or $3.71 per share, was up from $680 million, in the same quarter of 2022.

The company’s data centre revenue came in at: $14.51 billion, up a massive 279% and above consensus of $12.97 billion. Half of the data centre revenue came from cloud infrastructure providers such as Amazon, and the other from consumer internet and large companies, Nvidia said. Healthy uptake also came from clouds that specialized in renting out GPUs to clients.

Earnings: $4.02 per share, adjusted, vs. $3.37 per share expected

Revenue: $18.12 billion, vs. $16.18 billion expected

The gaming segment contributed $2.86 billion, up 81% and higher than the $2.68 billion general consensus. Nvidia’s future guidance suggested $20 billion in revenue for Q4, implying a nearly 231% revenue growth.

Year on year Nvidia share price movement.

Year on year Nvidia share price movement – Nov 2022 – Nov 2023

During the quarter, Nvidia announced the GH200 GPU, which has more memory than the current H100 and an additional Arm processor onboard. The H100 is expensive and in demand. Nvidia said Australia-based Iris Energy, an owner of bitcoin mining data centers, was buying 248 H100s for $10 million, which works out around $40,000 each.

Nvidia’s revenue grew 206% year over year during the quarter ending 29th October 2023, according to data from Nvidia.

Nvidia share price moved down 1% in after-hours trading on Tuesday 21st November 2023 after the reporting fiscal Q3 results that surpassed predictions. But the company called for a negative impact in the next quarter because of export restrictions affecting sales to organizations in China and other countries.

‘We expect that our sales to these destinations decline significantly in the Q4 2024, though we believe the decline will be more than offset by strong growth in other regions’, Nvidia reported.

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OpenAI saga continues – I’m in, I’m out, I’m back. Altman is back after getting the sack!

OpenAI

At the speed of AI, the story at OpenAI moves at lightning speed.

Hundreds of OpenAI employees signed a letter demanding the OpenAI board resign or face an employee exodus to Sam Altman’s new venture at Microsoft ‘imminently‘.

The board then attempted to negotiate Altman’s return, but those talks were unsuccessful.

At the touch of a button – resignation letter sent to the OpenAI board of directors

To the Board of Directors at OpenAI

OpenAI is the world’s leading AI company. We, the employees of OpenAI, have developed the best models and pushed the field to new frontiers. Our work on AI safety and governance shapes global norms. The products we built are used by millions of people around the world. Until now, the company we work for and cherish has never been in a stronger position.

The process through which you terminated Sam Altman and removed Greg Brockman from the board has jeopardized all of this work and undermined our mission and company. Your conduct has made it clear you did not have the competence to oversee OpenAI.

When we all unexpectedly learned of your decision, the leadership team of OpenAI acted swiftly to stabilize the company. They carefully listened to your concerns and tried to cooperate with you on all grounds. Despite many requests for specific facts for your allegations, you have never provided any written evidence. They also increasingly realized you were not capable of carrying out your duties, and were negotiating in bad faith.

The leadership team suggested that the most stabilizing path forward – the one that would best serve our mission, company, stakeholders, employees and the public – would be for you to resign and put in place a qualified board that could lead the company forward in stability. Leadership worked with you around the clock to find a mutually agreeable outcome. Yet within two days of your initial decision, you again replaced interim CEO Mira Murati against the best interests of the company. You also informed the leadership team that allowing the company to be destroyed “would be consistent with the mission.”

Your actions have made it obvious that you are incapable of overseeing OpenAI. We are unable to work for or with people that lack competence, judgement and care for our mission and employees. We, the undersigned, may choose to resign from OpenAI and join the newly announced Microsoft subsidiary run by Sam Altman and Greg Brockman. Microsoft has assured us that there are positions for all OpenAI employees at this new subsidiary should we choose to join. We will take this step imminently, unless all current board members resign, and the board appoints two new lead independent directors, such as Bret Taylor and Will Hurd, and reinstates Sam Altman and Greg Brockman.”

In just 5 days

  • Sam Altman sacked from OpenAI.
  • Altman appears to move to Microsoft.
  • OpenAI staff revolt.
  • No confidence in OpenAI board.
  • Space for staff to move to Microsoft and create new AI company under Altman’s leadership.
  • OpenAI mass employee resignation letter emerges.
  • Microsoft CEO Nadella says OpenAI governance needs to change no matter where Altman ends up.
  • Altman back at OpenAI after board changes.

Now, Altman is back after getting the sack.

So, is all OK at OpenAI? I asked CHATGPT the question, here is the answer…

Searching for: OpenAI news

Generating answers for you…OpenAI

It seems that there is some turmoil at OpenAI, the company behind ChatGPT. According to the latest news, the former CEO Sam Altman, who was ousted and hired by Microsoft last week, has made a stunning return to OpenAI as the CEO again1. The company also announced a new board of directors, including Bret Taylor, the former chair of Twitter1. This comes after a series of protests and resignations from OpenAI employees, who were unhappy with the direction and culture of the company2. OpenAI also unveiled new models and products at its DevDay event, such as GPT-4 Turbo, Assistants API, GPT-4 Turbo with Vision, and DALL·E 3 API3. These are some of the developments that have been happening at OpenAI recently. I hope this answers your question. 😊

There you have it, sacked and now back!

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Nvidia stock closes at all-time high

AI chip image

Nvidia stock closes at all-time high, a day before earnings

Shares of Nvidia closed up 2.3% at an all-time high of $504 on Monday 20th November 2023. The record comes ahead of the company’s Q3 results due Tuesday 21st November 2023, when analysts are expecting to see revenue growth of over 170%.

And, if that’s not enough, the forecast for Q4, according to some analysts, is likely to show a number close to 200% growth.

Nvidia is still by far the market leader in GPUs for AI, but high prices and competition are fast becoming an issue.

Can Nvidia continue the AI ride and hold this remarkable market share position?