Market Highlights: Google surges while Snap Inc plunges, as Mizuho puts bet on AI stocks
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Local shares are set to open higher again on Wednesday as Wall Street staged a mini rally. At 8am AEST, the ASX 200 index futures was pointing up by +0.3%.
Overnight, the Dow Jones extended its winning streak to 12 straight days, rising by 0.1%. The S&P 500 was up +0.3%, and tech heavy Nasdaq climbed 0.76%.
Alphabet’s share price rose 6% after the bell as its Q2 profits beat expectations, with growth attributed mainly to steady demand for its Google Search and Cloud services.
Snap Inc plunged 19% after the bell as it announced that projected current quarter revenue is at the lower end of analysts’ estimates.
General Electric jumped 6% after raising its annual profit forecast, while General Motors fell 3.5% after posting a decline in profits and margins in North America.
According to data from Refinitiv, earnings from stocks in the S&P 500 are now expected to decline by 7.7% in Q2 after these latest results.
Meanwhile, FOMC members have convened for the first of its two-day meeting, with a rates decision expected later today (US time).
A 25bp hike is already priced in by traders, and analysts believe the central bank would not go against what the market is already expecting.
Looking ahead to today’s ASX session, the much anticipated June quarter inflation data will be released by the ABS.
Consensus says headline inflation will fall to 6.2% from the 7% reported in May.
Mizuho analysts said the outlook for artificial intelligence (AI) technology and generative AI (GenAI) is very rosy.
According to their analysis, AI server unit penetration will reach approximately 11% by the end of 2027.
Amazon’s AWS Inferentia, Tesla’s Dojo, and Alphabet’s Google are poised to capture more market share as a result.
Mizuho also believes chipmaker Nvidia still has a lot of upside.
The analysts estimate that if Nvidia achieves AI revenues between US$30 billion and US$100 billion, the implied share price would range from US$490 to US$769.
Nvidia is currently trading at US$457.
Gold rose +0.5% to US$1964.82 an ounce ahead of a guidance from Fed Reserve chair, Jerome Powell.
Franklin Templeton’s gold portfolio manager Steve Land said the yellow metal could push above US$2,000 as the Fed comes closer to pausing rate increases.
Crude prices lifted around 0.7%, with WTI now trading at US$79.34 a barrel.
Analysts predict that oil could have more upside as effects of recent production cuts by the OPEC and Russia are beginning to be felt.
Iron ore (62% Fe) was trading modestly higher to $US112.72/a tonne.
Bitcoin meanwhile was 0.2% higher in the last 24 hours to US$29,221.
The environmental tech company reported record new sales in Q4 of $6.8m, up 13% on pcp. This includes New ARR (annual recurring revenue) of $3.1m. Total ARR has now grown 12% on pcp to $59.4m. The company’s relationship with BHP Group has also grown, with two new sites added during the quarter including a large copper mine in Chile.
Online retailer Redbubble announced that its US subsidiary, Redbubble Inc, has received two favourable decisions from a US Court in the ongoing litigation commenced by Brandy Melville and Atari relating to alleged intellectual property infringement. The court agreed that Redbubble cannot be held contributorily liable when third parties misuse Redbubble’s service to infringe without the company’s knowledge. In the Atari case, the court upheld the district court’s judgment in Redbubble’s favour.
Catapult Group (ASX:CAT)
The sports analytics company said its ACV (annual contract value) growth YoY for Q1 exceeded 20%. Revenue growth also exceeded 20%. Catapult has reaffirmed its guidance to be free cash flow positive in FY24 following the strong quarterly result.
Vitura Health (ASX:VIT)
Vitura announced that the World Health Organisation (WHO) Good Distribution Practices certification has been achieved at the company’s Gold Coast and Melbourne distribution centres. Vitura says the certification demonstrates Vitura’s dedication to good distributive practices and quality in every aspect of its service.
Battery Age Minerals (ASX:BM8)
BM8’s maiden drill campaign is off to a positive start with expedited assays returning multiple +20m high grade intercepts and continued visual intercepts of mineralised pegmatites. Significant intercepts include: 27.6 metres @ 1.37% Li2O from 16.65m down-hole, and 21.92 metres @ 1.44% Li2O from 5.7m down-hole.
At Stockhead we tell it like it is. While Battery Age Minerals is a Stockhead advertiser, it did not sponsor this article.