Technology

Intel forges path to probable capital incineration

17 Sep 2024

The troubled $90 bln chipmaker landed an Amazon contract that could catapult manufacturing and is taking steps to free up cash. Investing $20 bln at a return on capital matching rival TSMC is worth a 40% share bump today. Snag is, there are many ways Intel could be a money pit.

2024’s biggest US software LBO has some good omens

17 Sep 2024

Blackstone and Vista Equity Partners are close to an $8 bln deal for Smartsheet that would probably tap loans backed by revenue, not cash flow. That has bitten Vista before. But with style drift more contained and peers like Thoma Bravo eyeing IPOs, past might not be prologue.

OpenAI’s value on human destruction short circuits

16 Sep 2024

The cutting-edge artificial intelligence outfit may be worth $150 bln, a 74% jump from its last benchmark. Take AI boosters’ claims at face value and it’s easy to justify wildly more still. The problem: that would mean OpenAI is no mere company but a force shoving aside humanity.

ASML faces bigger problems than China

16 Sep 2024

Fears of US tech export curbs have pummelled the $320 bln Dutch firm’s shares. A longer-term worry is that the growth of AI leads to new technologies, and less need for ASML’s machines that make chips smaller and efficient. That, more than trade wars, may hurt its rich valuation.

Evan Spiegel is the skunk at the founder’s party

13 Sep 2024

The Snap architect blamed his $16 bln social media network’s stock slump on tepid ad growth. Self-awareness is a positive sign, and attention to detail is a creative plus. But after 13 years it might be time for Spiegel to seek outside help.

Apple offering a peek at AI’s financial reality

11 Sep 2024

The iPhone 16 is due in stores soon, optimized for artificial-intelligence. It’s unclear if business models exist for the costly and hyped tech. Sales of the new devices may signal whether consumers will pay for it or if Silicon Valley has a solution seeking a problem.

Telegram’s route to profitability looks dubious

3 Sep 2024

The troubled app’s CEO Pavel Durov runs a lossmaking enterprise. The easiest path to profitability is to echo Facebook, but content moderation costs would further hit Telegram’s finances. The main alternative is to be a messaging app, but WhatsApp implies that’s hard to monetise.

Murdoch’s UK property gambit has a price ceiling

2 Sep 2024

Australian property listings site REA Group is eyeing $6 bln UK peer Rightmove. The News Corp-backed suitor can use cash and higher-valued shares to pay a 30% premium. Beyond that, Rupert Murdoch’s outfit might struggle to combine a successful bid with keeping him in control.

OpenAI’s mooted $100 bln value is relatively sober

29 Aug 2024

The ChatGPT maker may be worth just 16% more in its next share sale than in February’s funding round, according to reports. That looks modest, given AI darling Nvidia’s shares have nearly doubled. Senior departures and competition from rivals like Elon Musk justify a modest bump.

Carry trade chaos charts outlines of next selloff

28 Aug 2024

BIS researchers reckon cascading margin calls helped turn a local Japanese wobble into a global rout in early August, eventually wiping $1 trln off US tech stocks. It’s a similar story to a March 2020 slump and 2022’s UK bond collapse. Worse, the core drivers remain in place.

New EU antitrust tsar has better tools, harder job

27 Aug 2024

The European Union will soon have a new competition commissioner. Margrethe Vestager’s replacement has greater scope to go after Big Tech and Chinese subsidies. But he or she will also have to defend the single market from the assault of EU members’ national industrial policies.

Alibaba and JD reveal two ways to cope in downturn

16 Aug 2024

China's $190 bln e-commerce group relies on ad sales and is betting on new tech for a turnaround. Its rival sells to shoppers and is focusing on supply chains to boost earnings. The diverging fortunes rest on who spends more: cash-strapped firms or cost-conscious consumers.

Worldline buyout offers rare shot at easy returns

15 Aug 2024

The $2.5 bln French payment firm is an obvious target thanks to its depressed share price. Private equity buyers can wring out a decent return even with zero profit growth in the next few years. And seeing as France is only a minor market, the state is unlikely to meddle.

Apple begins delicate dance with Tencent in China

15 Aug 2024

The iPhone-maker wants a share of revenue from games played on the $450 bln tech giant's WeChat platform. For Apple boss Tim Cook, it's a lucrative opportunity as handset sales cool. Yet if the US company pushes too hard, it may jeopardise its hard-earned appeal in China.

Apple loses China price battle, but will win war

12 Aug 2024

Big discounts by Huawei and other local rivals have eaten into the iPhone maker’s market share. Boss Tim Cook is fighting back, to preserve nearly a fifth of revenue. In a region that often beguiles tech outfits, the $3 trln company’s resilience is impressive – and sustainable.

Taiwan is punching well above its market weight

12 Aug 2024

Share sales and convertible deals are surging on the island where TSMC’s $748 bln market value exceeds GDP thanks to an AI-led rally. The market could surpass China’s weighting in global indices as profits trump geopolitics. For bankers, it's a counterintuitive bright spot.

Google is a monopoly, long live Google

5 Aug 2024

Alphabet’s search giant illegally wields its might over rivals, a US judge has ruled. The decision also carefully stays within classic antitrust boundaries. Given how tricky disentangling the $2 trln company’s technology would be, a market-shaking penalty will be hard to impose.

Philips’ share-price revival is only half finished

29 Jul 2024

The Dutch medical group’s orders are finally growing again, boosting the stock by 10%. Yet Philips is still well below its 2021 peak, before a faulty sleep-aid crisis. Keeping margins high and sales rising may help, but selling the consumer unit may complete the rejuvenation.

UMG pays steep price for platform addiction

25 Jul 2024

The $42 bln music group’s shares sank by more than 25% on Thursday, falling below their 2021 IPO. Lower-than-expected growth in subscription revenues underlines the company’s painful dependence on pricing decisions made by big players like Amazon or Apple.

Ford and GM cushioned by economic safety features

24 Jul 2024

Detroit’s $100 bln automaking duo hit some bumps, but they’re mostly humming along. Even so, delinquent loans and growing inventories have spooked investors about vehicle prices. Bloated dealer profit, ageing cars and lower borrowing costs should smooth out the road ahead.