Software

China policy risk returns as stock market grinch

22 Dec 2023

Shares in Tencent and NetEase plunged after surprise new curbs from Beijing on video-game spending and rewards. It smacks of President Xi Jinping’s crackdowns on private tutoring, tech and other sectors – and gives overseas investors another reason to be wary jumping back in.

US defense minnows will storm the barricades

20 Dec 2023

Even as conflict in Ukraine leads American arms makers to boost production, the political mood is turning against giants like Lockheed Martin. With half the $415 bln handed to American defense contractors not receiving a competitive bid, newcomers will make battlefield gains.

Adobe paints brighter future without Figma

18 Dec 2023

Unwilling to fight trustbusters, the design-software giant ditched its $20 bln deal. Since agreeing to pay the inflated price, its own AI plans have wowed investors. Even so, the hype is a bit overdone and its target now gets an extra $1 bln to sketch out new ways to compete.

Cyber-paperwork blizzard will soon blind markets

14 Dec 2023

New SEC rules force companies to divulge a hack within days of deeming it serious. CEOs wary of falling foul are apt to overshare. Such stock-swinging decisions, like ones from Clorox and Johnson Controls, will test investors’ analytical skills as much as corporate tech defenses.

Antitrust legendarily unpredictable despite Epic

12 Dec 2023

A jury ruled against Google in a case brought by the gaming firm while an emboldened FTC blocked Sanofi from snagging a new drug. Yet Pfizer is pushing ahead with a $43 bln deal. Rainmakers can be comforted that regulators’ front offices aren’t a totally impenetrable barrier.

Capital Calls: UK fund clampdown

12 Dec 2023

Concise views on global finance: Britain’s markets regulator has cancelled Christmas for fund operators like Hargreaves Lansdown and Abrdn.

Capital Calls: OpenAI’s Microsoft dilemma

11 Dec 2023

Concise views on global finance: When boss Sam Altman’s ouster threatened to implode the ChatGPT maker, $2.7 trln backer Microsoft helped restore order. That necessary boon, however, will draw ever-more trustbuster scrutiny about tech giants’ unshakable influence in AI.

SpaceX beats Tesla in business model bakeoff

7 Dec 2023

Elon Musk’s rocket company is seeking a $175 billion valuation, just one-quarter as much as his electric-vehicle firm Tesla. Yet viewed from space, based on some old-school measures of competitiveness, it’s the smaller firm that has the more solid foundations.

Trustbusters throw more bad money at Microsoft

6 Dec 2023

Lina Khan’s FTC failed to stop the tech giant’s $69 bln takeover of video-game developer Activision. Its appeals might salvage a narrow legal victory, but fighting a done deal for possibly another year looks foolish. The agency’s limited resources are better directed elsewhere.

OpenAI’s value comes full circle

5 Dec 2023

Despite recent chaos, the Microsoft-backed artificial intelligence startup is moving ahead with a share sale that could value it at roughly $86 bln. Even after the temporary ouster of boss Sam Altman that nearly spurred an employee exodus, its prospects are largely unchanged.

Capital Calls: AI funding

5 Dec 2023

Concise views on global finance: French AI model-maker Mistral is on track to notch a $2 bln valuation from investors like Andreessen Horowitz despite scant revenue.

Nvidia’s AI boom outpaces China limits

21 Nov 2023

The $1 trln semiconductor company tripled revenue, despite a crackdown on exports to the giant market. Unlike Apple, which also faces risks in China, there’s no substitute for Nvidia’s chips for fueling AI. Right now, the only limit on growth is how quickly it can meet demand.

Palantir’s mythology is far too precious

13 Nov 2023

The $40 bln data analysis company trades at 14 times revenue, a big premium to most peers despite generating only modest growth. It also has failed to demonstrate operating leverage to justify the AI exuberance. Moreover, some odd capital allocation choices warrant a discount.

Profitable Klarna poses IPO valuation conundrum

9 Nov 2023

The pay-later group is making money. Ahead of a possible float, that makes it easier for CEO Sebastian Siemiatkowski to claim he has a viable business. Yet to get an uplift on his last $7 bln price tag, he’ll have to persuade investors to value Klarna like a fintech, not a bank.

Apple’s cash insures against exuberance

3 Nov 2023

The $2.8 trln iPhone maker’s valuation is rich even as growth slows, antitrust worries cloud its services business and trade wars threaten China sales. While investors seem as confident as ever, the company’s balance sheet suggests boss Tim Cook is exercising some caution.

Uncle Sam provides shaky base for Caterpillar

31 Oct 2023

The equipment maker beat third-quarter profit forecasts with help from Washington’s infrastructure bill. Yet half of the $550 bln package has been spent, and Caterpillar’s backlog is shrinking. Like other government-supported spending, federal aid can only help for so long.

Biden AI plan is one step in avoiding crypto trap

30 Oct 2023

The president’s new executive order aims to set regulatory guardrails for artificial intelligence. It still leaves a big hole for Congress to fill. Failing to set coherent rules risks the kind of piecemeal enforcement that hobbled crypto, but for a technology with higher stakes.

Meta tenuously clings to financial reality

26 Oct 2023

Facebook’s owner grew quarterly revenue 23% and vowed to keep expenses in check. AI investments and a planned hiring spree may yet run into an economic slump, however, and reverse an ad rebound. Only then will boss Mark Zuckerberg’s power of self-restraint become clear.

Worldline crash is pivotal moment for payments

25 Oct 2023

The $7 bln French group’s shares fell 60% after it said sales would be hit by a call to ditch riskier merchants. Investors expect payment providers to be on top of flaky transactions. The fact that a leading player has had to rethink will scare them, and alert regulators.

Stolen genetic data points to mutating cyber risk

17 Oct 2023

Biotech firm 23andMe may have fallen victim to hackers, joining other sabotage targets Clorox and MGM. Companies can strengthen their systems, but human error plays a role too – with customers and employees as potential vulnerabilities. That adds a new front to an ongoing battle.