Thought Leadership

Last week, Dow Jones dropped 2.9%, S&P 500 lost 4.25% (worst weekly losses for both indices since March 2023), Nasdaq composite fell 5.8% (worst weekly loss since January 2022). Investors appear concerned the Fed may be behind the curve on a slowing economy, and the sell-off in AI stocks intensified. Nvidia plunged 9.5% on Tuesday, wiping nearly US$300 billion off the chipmaker’s market cap and pulling chip stocks down with it. Intel fell almost 8%, Marvell slid 8.2%, and Broadcom lost about 6%. AMD dropped 7.8%, and Qualcomm fell nearly 7%. Nvidia on Wednesday denied reports it received a subpoena from the Department of Justice over antitrust concerns. OpenAI CEO Sam Altman’s plan to raise money for new data centers, power sources, and chip manufacturing plants for artificial intelligence will start in the U.S. and could cost tens of billions of dollars, according to a Bloomberg report. Investors in other countries such as Canada, Korea, Japan and the United Arab Emirates also plan to participate, the report said. CBOE plans to start a platform for trading private company shares. Shares of AI software Firm C3.ai dropped 17%, despite stronger revenue growth projection. In Canada, Exro announced a public financing of up to approximately $30 million. Kits Eyecare increased its previously announced secondary offering of common shares to $11.4 million and increased the block trade of its common shares. Shopify will become Roblox’s first platform commerce partner. Sophic Client Ionik acquired Nimble5, a performance marketing company headquartered in San Diego, California for a total aggregate purchase price of ~US$33.7 million for cash, debt and stock, plus an earn-out consideration. Sophic Client Plurilock won a US$1.1 million contract with a U.S. agency.

Despite a strong Friday, markets ended the week mixed. Dow Jones rose 0.9%, S&P 500 was up 0.2% and Nasdaq Composite fell 0.9% during the week. Nvidia, Apple, Microsoft have been in talks about participating in a financing that would value OpenAI at over US$100 billion. Nvidia’s quarterly forecast on Wednesday sent its stock down 6% in after-hours trading, weighing on shares of other chipmakers. CrowdStrike shares slipped 4% in extended trading on Wednesday after the cybersecurity software maker reported strong fiscal second-quarter results but reduced full-year guidance in the wake of a global outage. Affirm shares closed more than 30% higher on Thursday, a day after the installment lender said it expects to turn profitable on a GAAP basis by the fourth quarter of its fiscal year ending next June. Intel is exploring strategic options to turn around its business and has hired investment banks. Super Micro stock plunged 27% as it delayed its 10K filing a day after scathing short-seller report. ChatGPT has 200 million weekly active users, Meta AI has more than 185 million weekly active users and Apple is working on next-gen humanlike AI ‘personality’ that’s not Siri. In Canada, yet another small cap innovation company was taken out, as Shift4 will acquire Givex. Sophic Client Plurilock announced gross proceeds of over $2 million from warrant exercises and engaged Clear Street to review U.S. strategic options. Sophic Client, Intermap announced a strategic partnership with Aon. Sophic Clients, Ionik, OneSoft, Xcyte Digital, Plurilock, Clear Blue Technologies all reported quarterly results. Sophic Client, ADM Endeavors, Inc. is building a new facility to serve as a centralized manufacturing hub, fulfillment center, and retail storefront to support the Company’s growth. We believe the property and future facility are hidden assets not reflected in the stock price. The Potential fair market value vs. book value of the land and facility is about 3-5x. Canadian AI, Viggle announced it had raised a $19 million Series A led by Andreessen Horowitz.

Last week, Dow Jones rose 1.3%, S&P 500 gained 1.45%, and Nasdaq composite was up 1.4%. Federal Reserve Chairman Powell indicated interest rate cuts are imminent. The next catalyst for tech investors is Nvidia earnings next week. AMD is acquiring ZT Systems, which sells AI infrastructure for cloud computing firms, for US$4.9 billion in cash and stock. Palo Alto Networks shares traded up nearly 3% in after-hours trading after the Company’s earnings report, and are up nearly 20% year-to-date. Snowflake posted stronger than projected growth and raised its projection for full year growth. Even so, Snowflake shares fell 8% in after-hours trading. Sophic Client, Kraken Robotics reported strong Q2 results – revenue increased 67% to $22.8 million, Adjusted EBITDA increased 79% to $5.4 million. Guidance remains unchanged — revenue $90.0 to $100.0 million, Adjusted EBITDA $18.0 to $24.0 million. The stock was also called out as a top pick on BNN by a portfolio manager. Sophic Client, Legend Power reported Q3 F2024 results. Revenue of $1.04 million versus $470 thousand in Q3 F2023. Adjusted EBITDA loss of $392 thousand versus a $884 thousand loss in Q3 F2023. Initial orders and deliveries of Gen3 systems and an LOI for another $3 million from the DOD, brought order visibility to $5.5 million over the last few quarters. Sophic Client, Xcyte Digital announced a significant expansion of its partner ecosystem, marking a major step forward in its mission to revolutionize the virtual and hybrid event landscape. As TikTok Shop gains traction, YouTube expanded its partnership with Shopify to onboard more brands for its YouTube Shopping affiliate program. Bitfarms agreed to acquire Stronghold Digital Mining for ~US$125 million in stock while the Company fends off a takeover attempt by Riot Platforms. Agilysys acquired Markham based Book4Time for $204 million.

Last week, Dow Jones was up 2.9%, S&P 500 rose 3.9% (its best weekly gain in 2024), and Nasdaq composite gained 5.3% — all strong gains from Aug. 5 lows. Investors are back lavishing millions onto megacaps as the high-flying tech stocks resume their climb, shrugging off the vestiges of last week’s market meltdown. Traders poured a net US$210 million into the Invesco S&P 500 Top 50 ETF on Monday, the biggest one-day influx in the fund’s nearly 20-year history. Among the fund’s biggest holdings are Apple, Meta Platforms, Nvidia, Alphabet, Amazon and Microsoft — the leaders of the so-called Magnificent Seven which have accounted for the bulk of the market’s gains this year. In Canada, Sophic Client OneSoft entered into an Arrangement Agreement to be acquired by irth Solutions for $0.88/sh in cash, a premium of 42% and 28% to the closing price and 20-day volume weighted average closing price of the Shares. Sophic Client UGE International announced the closing of its Plan of Arrangement to be acquired at $2/sh. Sophic Client, Intermap announced 125% revenue growth in Q2. Sophic Client, NowVertical Group, reported Q2 results, revenue was up 2% y/y adjusted for recent divestitures. Income from Operations was US$0.7 million, a 125% y/y increase due to gross margin and administrative expense improvements. Sophic Client ADM Endeavors reported Q2 results – Revenue was US$1.2 million, a 5% decrease y/y, but up 16% q/q. Sophic Client, Plurilock filed a Nonprovisional Patent application for AI-driven cloud access security broker technology for generative AI – hitting a new 52 week high. Well Health plans to spin out, and publicly list its SaaS and services business in 2025. Bitcoin miner Riot Platforms raised its stake in rival Bitfarms to 18.9%. Toronto based Radical Ventures, raised almost US$800 million for a new fund, according to Bloomberg. Radical Ventures was an early backer of model maker Cohere, recently valued at US$5.5 billion.

After a brutal Monday, due to fears of the yen-carry-trade unwinding and an Nvidia AI chip delay, the market ended the week well above Monday’s lows. Dow Jones fell 0.6% last week, S&P 500 ended the week almost flat, and Nasdaq composite lost 0.2%. WeRide, a Chinese autonomous driving company, is getting ready for its U.S. IPO. The company is selling almost 6.5 million American depositary shares, priced between US$15.50 and US$18.50 each. Shares of AI chipmaker Black Sesame tumbled as much as 35% on their Hong Kong debut, dealing a blow to Hong Kong’s efforts to lure more technology listings. Nvidia shares dropped 6% Monday after reports that the company’s upcoming AI chips are facing production delays by at least three months due to design flaws. Groq, an Nvidia challenger, raised US$640 million in Series D funding at a valuation of US$2.8 billion. Warren Buffett’s Berkshire Hathaway slashed its stake in Apple in half as part of a selling spree in Q2. A federal U.S. judge ruled Monday that Google has illegally held a monopoly in two market areas: search and text advertising. Later in the week, Palantir’s shares surged on a rosy profit outlook signaling AI demand. Uber posted sharply higher profits, and Airbnb warned of a U.S. growth slowdown. In Canada, Shopify’s revenue grew 21% y/y, beating the company’s own outlook of high-teens growth, sending its shares up more than 20% on Wednesday morning. Sophic Client UGE International announced that the closing of its previously announced go private transaction, is now expected to occur on or about August 14, 2024, as opposed to on or about August 8, 2024. Sophic Client Intermap closed the final tranche of its Private Placement, for a total of ~$3.3 million raised. Sophic Client Clear Blue Technologies’ stakeholders provided a financing package of $2.2 – $2.9 million.