AnalytixInsight

Despite a bullish Wednesday, markets had a bad week. Dow Jones lost 2.1%, as did S&P 500. Nasdaq composite was down 3.35%, and is now in traditional correction territory. Cerebras, an Nvidia rival that develops AI chips, has filed confidentially for an IPO. Elliott Management, a hedge fund, said Nvidia and other megacap technology stocks were in “bubble land,” according to a letter viewed by the Financial Times. Microsoft shares fell 4% in after-hours trading Tuesday after it said revenue from enterprise software and cloud server rentals rose more slowly in Q2 than in Q1. Shares of Nvidia and other chip firms jumped Wednesday after Microsoft said Tuesday night that it plans to continue spending tens of billions of dollars on new data centers and chips for AI. Meta’s revenue rose 22% in Q2, and Apple revenue rose 5% despite weak iPhone results. Amazon Web Services revenue grew 19% y/y to US$26.3 billion in Q2, AWS’s fastest growth since 2022 but still significantly lower growth than at smaller cloud rivals Microsoft and Google. AMD projected higher AI chip sales. Qualcomm reported earnings on Wednesday that beat Wall Street expectations. Intel said Thursday that it would cut 15,000 jobs or more than 15% of its workforce over the next two years and embark on a US$10 billion cost-reduction plan to improve its competitiveness. Morgan Stanley will allow financial advisors to offer Bitcoin ETFs. In Canada, Sophic Client, Plurilock appointed a 35-year veteran of enterprise technology IT and solutions sales to its industry advisory council. Sophic Client Xcyte Digital, announced advanced AI-powered captioning and translation features. We also sat down with CEO, Randy Selman, to discuss recent acquisitions and future milestones for the company.

Last week, Dow Jones rose 0.6%, S&P 500 lost 0.8%, and Nasdaq composite fell 2.1% despite Friday’s rebound. Upcoming earnings from big techs including, Apple, and Microsoft this week and the Fed rate outlook will likely determine if the Nasdaq can turn around or heads into correction territory. Honeywell is considering an IPO of its majority-owned quantum computing firm Quantinuum as soon as next year at a US$10 billion valuation. Revolut, already the world’s second most-valuable fintech startup after Stripe, is in talks to sell the shares to new shareholders at a US$45 billion valuation. Wiz has ended deal talks with Google after the tech giant offered to acquire the startup for US$23 billion. Southeast Asia’s biggest ride-hailing and food delivery firm, Grab, has bought Singaporean dining reservation platform Chope for an undisclosed price. Anthropic projected to burn more than US$2.7 billion in cash this year. IBM shares rose 5% in extended trading on Wednesday, after Q2 results surpassed analysts’ predictions. Google’s ad revenue growth softened slightly in Q2, the company also reversed its decision to end ad trackers in Chrome. OpenAI is launching a search engine, taking direct aim at Google, sending Google shares down 3%. Tesla CEO Elon Musk said he will ask the company’s board of directors to consider investing US$5 billion in xAI. Reddit is partnering with several major sports leagues to bring more video content to the site in hopes of boosting advertising revenue. In Canada, Sophic Client, Kraken’s long thesis was highlighted by Deep Sail Capital in their Q2 investor letter. Sophic Client, Plurilock provided a corporate update, and was recognized by industry analysts for the fifth year. Sophic Client Xcyte Digital announced a strategic partnership with Pixel Canvas. Cohere raised US$500 million at US$5.5 billion valuation, and announced staff cuts. Clio topped a $4-billion valuation with the largest software funding round in Canadian tech history.

Last week, after a few weeks of markets being extended, Dow Jones rose 0.7%, S&P 500 fell 2% after hitting a record Tuesday, and Nasdaq lost 3.65%. CBOE Volatility Index, or VIX, jumped nearly 33% to 16.53, logging its largest weekly gain since March 2023. However, the VIX is still well below recent peaks of ~21. OneStream Software, backed by KKR is targeting a valuation of about US$4.38 billion in its U.S. IPO. CrowdStrike stock fell 9% on Friday morning, after a flawed software update triggered a major global tech outage that affected banks, airlines, broadcasters and other businesses. Google recently has been in talks to acquire Wiz, a four-year-old cybersecurity startup, for around US$23 billion. GitLab is reportedly exploring a sale to Datadog, sending its shares up 7%. Meta is considering buying a small stake in EssilorLuxottica. Shares of Serve Robotics soared as much as 241% on Friday after Nvidia disclosed a stake in the company. The price of bitcoin and Coinbase jumped on Monday, as investors boosted bets that pro-crypto candidate Donald Trump will win the November presidential election. Broadcom shares rose 3% after a report that the chip designer was talking to OpenAI about developing a new server chip for AI. Shares of major chip design and hardware providers fell Wednesday after reports that the Biden administration is considering tougher trade restrictions. In Canada, Sophic Client, Intermap closed the first tranche of its LIFE offering for aggregate gross proceeds of ~$1.2 million. Sophic Client, ADM Endeavors, continues to add new government clients. The Company is working on a new facility to increase capacity 5x, by the end of the year. The market value of the property value and new facility has increased significantly, representing a hidden asset on the balance sheet. Sophic Client Plurilock Security, added significant heft to its Industry Advisory Council.

Last week, markets had a big shake-up on Thursday, but major indices closed up for the week — Dow Jones rose 1.6%, S&P 500 gained 0.9%, and Nasdaq composite was up 25 bps. That said, with the NASDAQ still stretched, upcoming tech earnings could cause volatility. U.S. venture capital funding surged to US$55.6 billion in Q2, marking the highest quarterly total in two years, largely driven by a few large AI driven rounds. Ticketing app, StubHub has decided to delay its planned summer IPO until after Labor Day. Microsoft and Apple gave up on obtaining OpenAI Board seats amid Antitrust probes. Google ended acquisition discussions with marketing software firm Hubspot. MicroStrategy, the largest corporate holder of bitcoin, announced a 10-for-1 stock split on Thursday. Electric-vehicle stocks Tesla, Rivian and Lucid showed major signs of life after Q2 deliveries proved to be better than Wall Street estimates. Apple is preparing over 90 million iPhone 16 units for 2024 alone, counting on AI services to fuel demand for its new lineup after a rocky 2023. Hackers broke into AT&T’s systems and stole call and text logs of “nearly all” of its cellular customers, the company said on Friday, blaming a breach of Snowflake’s cloud service for the hack. In Canada, Héroux-Devtek, entered into a definitive agreement to be acquired by Platinum Equity for $32.50/sh in cash, representing a total enterprise value of approximately $1.35 billion — a 28% premium to the closing share price on July 10, 2024. After reaching US$100 million in revenue, Vena became Canada’s latest “centaur” company. Sophic Client, Xcyte Digital announced the closing of the Webinar asset purchase. During 2023, the assets being acquired generated ~US$2.8 million in revenue and US$615K EBITDA. In our recent report, we look at the market size for cybersecurity and the trends that we believe make this a top investment theme in 2024 and beyond, which bodes well for Sophic Client, Plurilock.