Tech

Olympic Games can withstand Atos farce

26 Jun 2024

The French firm managing the Paris sporting event’s IT backbone is close to bankruptcy. It may find 800 mln euros of short-term financing from President Macron’s government and loans even after creditors ditched restructuring talks. But its future after the Games is less certain.

Revolut’s desired $40 bln price tag is a stretch

24 Jun 2024

The UK fintech group wants to sell $500 mln of shares at a valuation far above its last level. To get to $40 bln, investors need to assume it’s like payment giant Adyen. With a lower margin and discounts warranted in other areas, Revolut’s value looks more like $20 bln.

A warning from history about large-cap stock booms

21 Jun 2024

Five decades ago, shares in a handful of large companies like IBM and McDonald’s propelled the US stock market to new highs before collapsing. As investors pile into tech giants led by $3.3 trln Nvidia, the earlier period may be instructive for those who believe history rhymes.

Trillionaire club throws an indulgent theme party

20 Jun 2024

New $3.3 trln leader Nvidia and the five other US members are powered by AI hype. It makes chipmaker Broadcom a good prospect for induction soon. Eli Lilly could easily be the first anti-obesity joiner. Megatrends sparking giddy valuations also make the group much less exclusive.

Autodesk left a door ajar for its pushy investor

18 Jun 2024

Despite a plum niche developing software for architects, the $50 bln firm’s performance has sagged. Rabble-rouser Starboard Value has cookie-cutter fixes. But the company’s hand is weakened by poor disclosure that invites gripes about activists’ favorite target: executive pay.

Intel sketches promising factory blueprints

10 Jun 2024

The chipmaker struck an $11 bln deal with investment shop Apollo to help offset the expense of building a facility in Ireland. By 2040, the cost of such cutting-edge plants could quadruple to $100 bln. Given the solid investment return profile, similar partnerships will abound.

Autonomy’s legal endgame leaves few real winners

7 Jun 2024

A US court has cleared Mike Lynch of fraud connected to a $12 bln sale of the group he founded to Hewlett-Packard in 2011. It only heightens the sense that HP’s due diligence was lamentable. But the snail-pace of justice also cost Lynch over a decade of his career.

Trustbusters loom larger for Microsoft than Nvidia

6 Jun 2024

Tech is full of natural monopolies, and artificial intelligence may be no different. Regulators prefer to act quickly to stop abusive actions snuffing out competition. The $3 trln chipmaker’s dominance will be hard to dislodge. The software giant’s AI deals appear more fragile.

Elliott nudge may lead to slow-motion SoftBank LBO

5 Jun 2024

The US activist wants the $88 bln Japanese tech investor to boost its share price via a $15 bln buyback. That could raise SoftBank boss Masayoshi Son’s stake from a third to 40% and in time spur him to take the group private. The risk for Elliott is that he binges on AI instead.

The $5 trln AI boom could both succeed and fizzle

21 May 2024

Tech giants are making hefty investments in artificial intelligence in the hope of gigantic future profits while enjoying frothy valuations. Yet past frenzies in railways and telecom show capital-intensive innovations can change the world while leaving investors short-changed.

JD sends out bullish signal on China stocks

22 May 2024

The tech company's $1.8 bln convertible debt deal is the largest out of the People's Republic since 2021. The notes, which swap into equity at a 35% premium to the current share price, suggest optimism is returning to Chinese markets. Whether big IPOs will follow is less clear.

Hollywood is first and last defense in AI war

21 May 2024

Scarlett Johansson is calling on regulators to protect individual rights after she accused Sam Altman’s ChatGPT of using her voice. The actor’s star wattage lends heft to the threat of legislation and litigation. If Tinseltown doesn’t succeed, though, it’s the wild west.

Nvidia completes pricing-power circuitry

21 May 2024

The $2 trln chipmaker’s gross profit margin is approaching an astonishing 80%, underpinning ever-greater expectations. AI data centers are turbocharging boss Jensen Huang’s ambitions. The exorbitant demand will in turn lead to even greater clout over customers in the longer run.

AI will help treat Big Pharma’s looming illness

15 May 2024

Drug discovery is a long and costly process with success rates below 10%. Caps on prices and shorter patent periods in the US will also make life harder for the likes of Pfizer, AstraZeneca and rivals. Despite patchy results, betting on machines may be the best hope of a cure.

Timid post-Covid tech cleanup begins with mini-LBO

13 May 2024

Website builder Squarespace is going private, the latest deal for a tech firm in a post-pandemic funk. A price of 20 times EBITDA looks more modest when accounting for investors sticking around and improving cash flow. Opportunistic dealmakers aren’t yet swinging for the fences.

Elon Musk clearly sees AI hallucinations

10 May 2024

Even though the Tesla billionaire expects the cutting-edge tech to make all jobs obsolete someday, he says he hasn’t found practical use for it in some of his businesses. It’s a reality other CEOs will soon confront, too. Humans are still learning financial lessons the hard way.

Arm encounters the AI bubble’s ups and downs

9 May 2024

The $110 bln chip designer reported record revenue in the fourth quarter, but investors disliked a less punchy outlook. Big Tech’s AI-fuelled data centre land grab is powering Arm’s revenue and margins. But its toppy valuation means any perceived upset gets punished.

New ASML CEO’s job is harder than it might look

9 May 2024

The $360 bln Dutch firm is the sole maker of machines that produce the most advanced chips for Intel and TSMC. New boss Christophe Fouquet effectively runs a monopoly. But he still faces risks from staff retention, China-US spats, and as-yet-opaque risks to ASML’s domination.

Apple has a cash problem

7 May 2024

The tech giant produces over $100 bln of excess cash a year. An event showcasing a new pencil reveals its quandary. Investing in AI ventures may be necessary but is riskier for Apple than for rivals like Microsoft. But a rush gained through stock buybacks isn’t a long-term fix.

EU tech rules bite ever-closer to Apple’s core

10 Apr 2024

As Brussels gains new powers and enforces a March music-streaming ruling, the European Union can finally force Apple to change how the iPhone works with outside developers. A US antitrust case adds pressure. Users may not like the results, which means investors should care too.