Weekly Investment News and Analysis

Last week, Dow Jones lost ~10 bps, S&P 500 rose 0.9%, and NASDAQ Composite gained 1.7% and hit a record high on Friday. Klarna is considering a US$20 billion IPO this year. eToro is getting interest about a public market listing. Investing platform Webull will go public through a SPAC deal. Stripe struck a deal with investors that allows current and former employees to cash out some of their shares in an offering valuing the startup at US$65 billion. Hedge funds are reportedly dumping tech stocks at the quickest pace in seven months after piling in ahead of Nvidia’s wild earnings report. At the same time, options on Nvidia, accounted for 25 cents of every dollar of premium – the price of contracts – traded in U.S. single-stock options over the past month. Various companies including Apple, Fisker and Polestar signalled problems with the EV market. In Canada, Sophic Client, Kraken Robotics announced that its minehunting systems were operational with the Royal Danish Navy, under a 2020 contract. Sophic Client, UGE achieved a Notice to Proceed milestone for a second 1.4MW solar project in Texas. UGE had the project appraised by an independent third party for a fair market value of US$3.1 million or US$2.22/Watt. Sophic Client, Clear Blue provide a Q4 2023 corporate update, which bodes well for 2024 results and also announced product updates. Railtown AI closed the final tranche of its previously-disclosed non-brokered private placement. Collectively across all tranches of the Offering, aggregate gross proceeds of nearly $3 million was raised. Toronto startup ideogram raised $80 million for AI image generation, Andreessen Horowitz is leading the round.

Last week, Dow Jones rose 1.3%, S&P 500 gained 1.7%, as both indices reached new all-time highs. Nasdaq composite was up gained 1.4%, as it hit a fresh two-year high. The market value of Nvidia briefly touched US$2 trillion on Friday, two days after the chipmaker posted significant growth in its quarterly revenue. At the same time, Nvidia chips have become far easier to access than they were last year, and ChatGPT has seen declining web traffic in five of the past eight months and is currently down 11% from its May 2023 peak. Jeff Bezos, Nvidia, Microsoft and OpenAI are throwing serious cash at a human-like robot startup, Figure AI in US$675 million financing. Astera Labs, a startup that’s slated to be one of the first beneficiaries of the generative AI boom, filed documents to go public. Reddit filed to list its IPO on NYSE under the ticker RDDT. Nigeria, Africa’s most populous country, blocked access to crypto trading platforms including Binance. Electric vehicles seem to be encountering demand headwinds, according to recent data from Ford, Mercedes-Benz and the Chinese market. In Canada, Sophic Client OneSoft reported preliminary 2023 results, and provided guidance for 2024. 2023 revenue increased 51% y/y to $10.4 million, in line with previous guidance. OneSoft issued 2024 guidance for revenue of $15 million to $16 million, Adjusted EBITDA between $1.6 million to $1.9 million, and forecasted cash at the end of 2024 of between $4.7 to $5.0 million. The Company was also recognized as a top performer by the TSX Venture Exchange in the Technology sector. Sophic Client Legend Power Systems reported Q1 F2024 financial results. “While deals have taken longer to close than initially thought, we continue to advance all deals that have previously been communicated and have not lost a single opportunity,” said Randy Buchamer, Legend Power Systems CEO.

Last week, markets held up reasonably well despite hot inflation reports. Dow Jones was down 0.1%, S&P 500 lost 0.4% and Nasdaq fell 1.3%. As indices remain near highs, Nvidia’s earnings report Wednesday will be crucial. The Company surpassed Amazon in market capitalization on Tuesday. OpenAI completed a deal that values the company at US$80 billion or more, nearly tripling its valuation in less than 10 months. SoftBank founder Masayoshi Son is seeking as much as US$100 billion to bankroll a chip venture to compete with Nvidia and supply semiconductors essential for AI. Nvidia also blogged about a new AI model, Sora, that produces original video based on text descriptions of what people want to see. Google on Thursday announced an upgraded version of its flagship conversational artificial intelligence, Gemini. Apple plans to release an AI-powered coding assistant this year. Walmart is in talks to buy TV maker Vizio. Uber unveiled a US$7 billion stock buyback plan. In Canada, as Sophic Client Kraken Robotics’ stock is at fresh 52 week highs, the company provided positive updates for 2023 and a strong 2024 outlook. Kraken’s sales funnel pipeline at the end of December 2023 was over $900 million, and the company expects 2024 revenue between $90 to $100 million and Adj EBITDA in the $18 to $24 million range. Another Canadian small cap company is getting taken out, as Think Research entered into a definitive agreement to be acquired by Beedie Capital, for a 100% premium to the closing price of the Common Shares on February 15, 2024 and a 75% premium to the 30-day volume-weighted average trading price of the Common Shares. Shopify’s warned operating expenses would grow in Q1, sending its stock down more than 7% in trading Tuesday morning.

Last week, Dow Jones was up just fractionally while S&P 500 rose 1.4%, moving above the key 5,000 level. Nasdaq gained 2.3%, briefly exceeding the 16,000 level. OpenAI’s CEO Sam Altman has spoken with investors about raising trillions of dollars to fund an effort to expand the world’s manufacturing capacity to make semiconductors for artificial intelligence. The effort could require US$5 trillion to US$7 trillion and a sprawling partnership between OpenAI, chipmakers, power providers and governments. China’s leading chip manufacturer, Semiconductor Manufacturing International Corporation, is setting up production lines outside Shanghai to manufacture even more advanced chips as soon as this year. The news comes despite U.S. efforts to prevent China from advancing its chipmaking abilities through sanctions and blacklists. Nvidia is in talks with Microsoft, Meta, Amazon to develop custom AI chips. Arm shares soared as much as 41% after the chip designer gave a strong forecast. Palantir stock jumped 19% as AI demand drove a revenue beat. OpenAI is developing a form of agent software to automate complex tasks by effectively taking over a customer’s device. Google launched its GPT-4 rival, Gemini Ultra, for US$20 a month. Disney’s ESPN, Warner Bros. Discovery and Fox Corp. have announced a new streaming joint venture in the U.S. that would put all of their sports programming on a single app. In Canada, Sophic Client UGE achieved commercial operation for a rooftop community solar project in Queens, New York. UGE had the Queens project appraised by a third party for a fair market value of US$3.20/watt, with a project total of US$1.2 million. With the completion of this project, UGE’s operating portfolio now stands at 5.6MW, with an additional 17.7MW of projects currently in the construction and deployment phase of development.

On the back of risks we highlighted last week, markets struggled mid week, as Fed chief Powell largely ruled out a March rate cut, and Google results weighed on tech stocks. That said, Dow Jones and S&P 500 rose 1.4% last week as both set record highs. Nasdaq gained 1.1% to close at a two year high driven by gains on Thursday and Friday owing to Meta and Amazon results. US venture capitalists are reportedly sitting on US$311 billion in unspent cash, as they shy away from risky bets on Silicon Valley start-ups and concentrate on finding ways to return capital to their own backers. Rubrik, the cybersecurity software startup that Microsoft invested in at a US$4 billion valuation in 2021, plans to go public in New York as early as April, as it handles a U.S. fraud investigation into one of its former employees. Internet discussion forum Reddit is targeting a valuation of at least US$5 billion in its upcoming initial public offering, about half the price at which it last raised funds privately. Sierra Space Corp. is making preliminary plans to go public and exploring possible acquisitions as the company drives toward debuting its long-awaited cargo spaceplane, potentially by the summer. Jeff Bezos could sell up to US$8.5 billion in Amazon stock in next year. A Delaware judge voided the US$56 billion compensation package of Tesla CEO Elon Musk. Tesla’s share price slid about 3% in after-hours trading following news of the decision. In Canada, Sophic Client Kraken was mentioned as a recent buy by PenderFund Capital Management. Sophic Client Renoworks and Eagleview announced a new all-in-one virtual 3d design and measurement tool for exterior contractors. Railtown AI announced a $2.5 million non-brokered private placement. Recent Canadian tech financings appear to have been well received by investors, which bodes well for the space. Exro will acquire California-based SEA Electric in a $332-million EV-tech deal.

Last week, Dow Jones rose 0.65%, S&P 500 gained 1.1% and Nasdaq composite was up 0.9%. Investors could now pause to see big earnings and economic news, including a Fed meeting this coming week. While Wall Street cheers on Silicon Valley, tech companies are downsizing at an accelerating clip. So far in January, some 23,670 workers have been laid off from 85 tech companies. Chipmaker Cerebras systems is weighing an IPO as soon as 2024. ASML shares closed at a record high after an earnings beat, and orders pop. Elon Musk’s xAI is in talks to raise US$6 billion. The FTC started an inquiry of AI Deals involving Microsoft, OpenAI, Google, Amazon, Anthropic. Google launched a generative AI tool for search ad buyers. Figma will offer new equity packages to employees at a price that values the company at US$10 billion, 50% lower than the US$20 billion Adobe was willing to pay for the design startup in a since-scuttled deal. Tesla shares fell 10% as a vague outlook disappointed Wall Street. Some Apple Vision Pro deliveries were pushed to April, and demand remains unclear. In Canada, we are optimistic that we are beginning to see increased capital flowing into small cap innovation after nearly three years. Sophic clients, Kraken Robotics, OneSoft Solutions, and Renoworks Software are at or near their 52 week highs. Kneat upsized its previously announced bought deal public offering to $17.4 million. MediaValet will be acquired in an all-cash transaction, at a premium of 30% and 22% to the Company’s closing price and 20-day volume-weighted average price, respectively. EMERGE signed a definitive agreement to sell WholesalePet for US$9.25 million, and plans a major debt reduction. New Sophic Capital client, ADM Endeavors provided a corporate update, and expects consistent organic growth in 2024 and beyond. Renoworks announced the new Renoworks Pro Partner program and introduced Renoworks API Hub to fuel market growth.

Last week, stock markets had a strong finish. On Friday, S&P 500 rose past its January 2022 all-time high. Dow Jones closed at all-time closing high. Nasdaq, while still not still not at a record high closed at a two year high after rising 2.9%. Reddit plans to go public by the end of March. Shein faces data privacy review from Chinese regulator, potentially complicating the Company’s US IPO. Elon Musk threatened to stymie Tesla’s development in artificial intelligence and robotics if he isn’t granted more control of Tesla. OpenAI CEO Sam Altman said that his top priority right now is launching the next version of the company’s large language model, likely to be called GPT-5. Sam Altman also plans to establish a global network of factories to manufacture semiconductors. Meta aims to build artificial general intelligence, software that can reason like humans do, CEO Mark Zuckerberg said. Google and YouTube are cutting hundreds of jobs. Baidu stock sinks the most since 2022 despite denying links to PLA AI. Chip design software maker Synopsys said on Tuesday it would buy Ansys in a US$35 billion cash-and-stock deal. The European Union intends to block Amazon’s US$1.7 billion acquisition of Roomba maker iRobot. The Justice Department could sue Apple over Antitrust by March. The U.S. Supreme Court has declined to hear the legal case between Apple and Epic Games, allowing a lower court’s decision to stand that requires Apple to open up its App Store to alternative payment systems. Sophic Client Kraken Robotics’ insider buying was mentioned in the Globe and Mail. Dye & Durham announced a $126 million bought deal offering. Flexport is raising $260 million from Shopify, one of its biggest shareholders. Sophic Client UGE announced Q4 2023 milestones and business updates.

After the first week of 2024 saw lots of selling, perhaps to optimize taxes on 2023 capital gains — last week was better for investors. Major indices, having found support at key levels are now at important resistance levels. Dow Jones was up 0.3% last week, S&P 500 gained 1.8%, hitting 52-week highs and is now within a few points of its all-time high. Nasdaq rose 3.1% and is encountering resistance at 15,000. More than 100 companies are getting ready to list on Nasdaq after filing confidentially with the SEC, Nasdaq’s CEO Adena Friedman told investing publication Barron’s. Circle has confidentially filed for an initial public offering, the company said on Thursday, signaling the stablecoin issuer is taking another run at becoming a publicly traded firm after a special purpose acquisition deal fell apart in 2022. The first Bitcoin ETFs were approved by US regulators, and saw US$4.6 billion in volume on the first day of trading. Microsoft passed Apple in market capitalization as of Friday’s close, becoming the most valuable company. OpenAI launched a new store for users to share custom chatbots. Twilio’s CEO is stepping down, under pressure from activist shareholders. Numerous companies announced job cuts, including Alphabet, Amazon, Twitch, Discord, Unity, Humane. Hewlett Packard Enterprise said it’s agreed to buy networking gear vendor Juniper Networks for about US$14 billion, or US$40 per share, in an all-cash deal. Bain Capital and Hellman & Friedman are competing to acquire DocuSign with a market value of about US$12.5 billion. Apple’s Vision Pro headset could sell out quickly at launch, a top analyst predicted. Carta said late Monday it was closing a part of its business under fire for improperly using private customer data. Sophic Client, UGE reached commercial operation on a rooftop Community Solar project in Peekskill, New York. Independent third party values the project at US$1.4 million or US$2.98/Watt.

As the year comes to an end, may the Holiday Season bring you happiness and 2024 be filled with investing success. We will be back in January. Last week, the market looked past Wednesday’s sell-off and major indexes rose for an eighth straight week — Dow Jones rose 0.2%, S&P 500 was up 0.75%, Nasdaq gained 1.2%. Software startup ServiceTitan is preparing for 2024 IPO. Anthropic, is in talks to raise US$750 million in a venture round led by Menlo Ventures. OpenAI is in talks to raise new funding at a valuation of US$100 billion or more. ByteDance’s sales broke US$110 billion to pass Tencent in 2023. China’s iPhone ban accelerates across government and state firms. Adobe and Figma called off the US$20 billion acquisition of Figma by Adobe. Adobe now has US$6 billion for AI and buybacks after the deal collapsed. Cybersecurity firm Okta will buy startup Spera for a reported US$100 million. Shares of Micron gained about 6% in premarket trading Thursday, after the largest US maker of memory semiconductors indicated data center demand is compensating for a slowly recovering market for personal computers and smartphones. Apple is aiming to sell the Vision Pro in February, the company has also developed a breakthrough method for Running LLMs on iPhones. Google might already be replacing some Ad sales jobs with AI. Google will pay US$700 million to settle claims by a group of state attorneys general. BlackRock’s proposed bitcoin ETF will now allow cash redemptions after pushback from the SEC. In Canada, HIVE announced a $25 million bought deal. Sophic Client, Legend Power reported Q4 F2023 results, management is focused on advancing sales opportunities. Sophic Client, Kraken received a Synthetic Aperture Sonar Order from NATO CMRE. Sophic Client Ionik unveiled a fully rebranded website, taking another step in its brand evolution.

With the Fed possibly pivoting to rate cuts in 2024, Dow Jones hit an all-time high, S&P 500, Nasdaq composite, Russell 2000 and S&P MidCap 400 – all hit 52-week highs. For the week, Dow Jones was up 2.9%, S&P 500 gained 2.5%, and Nasdaq composite rose 2.85%. Publicly traded electronic signature company DocuSign is working with advisers to explore a sale, potentially setting up one of the largest leveraged buyouts in recent years. A private equity consortium led by Insight Partners and Clearlake Capital Group is in advanced talks to take data analytics software company, Alteryx private for around US$5 billion, including debt. Global Payments is considering an acquisition of US peer Shift4. TikTok and Indonesian internet firm GoTo, have announced a deal in which TikTok will acquire GoTo’s Tokopedia e-commerce subsidiary in Indonesia. Oracle stock dropped 8% on slower revenue growth. Adobe shares fell 6% after hours after the company issued a revenue projection for its new fiscal year that implied a smaller boost from its new artificial intelligence products than investors had been hoping. Etsy is laying off around 11% of employees, as the site struggles to grow sales amid fierce competition from bargain-priced sellers like Shein and Temu. Epic Games’ victory against Google has put Apple back under App Store pressure. In Canada, Sophic Client, Kraken maintained strong Q4 service utilization, with a record number of survey awards. Sophic Client, Xcyte Digital, hosted the Metaverse Spectrum and celebrated a successful business conference, expo, awards, and pitch fest, where 27 companies had the opportunity to pitch to a panel of judges and connect with over 120 investors. TMX Group, the owner of the Toronto Stock Exchange, said on Wednesday it had acquired an around 78% stake in U.S. data analytics company VettaFi Holdings for US$848 million ($1.14 billion).

Last week, the market had modest gains, driven in the second half of the week. For the week, Dow Jones gained 2 points, S&P 500 index was up 0.2% and Nasdaq composite rose 0.7%. S&P 500 hit its 2023 high on Friday, and Nasdaq is coming up to that level. The market rally could be ready to run, but sentiment is already bullish. Out of 128 closely held companies that achieved valuations at or above US$1 billion as of 2021, nearly 90% were estimated to be valued lower in private trades, and about a third of the startups’ valuations in the group dropped below US$1 billion. SpaceX is discussing allowing a sale of company shares by employees and other investors at a valuation of US$175 billion or more, an increase of at least 17% over the last such offering. Fidelity and Jane Street backed CoreWeave at a US$7 billion valuation. CoreWeave, is a cloud computing provider that’s among the hottest startups in the artificial intelligence race. Elon Musk is looking to raise US$1 billion for xAI, his AI company. OpenAI rival, Mistral nears a US$2 billion valuation with Andreessen Horowitz, Nvidia, and Salesforce backing. Google’s new Gemini AI model is getting a mixed reception after its big debut yesterday, but users may have less confidence in the company’s tech or integrity after finding out that the most impressive demo of Gemini was pretty much faked. AMD holds launch event for AI chips that challenge Nvidia. AMD stock didn’t move on the news but is up 82% so far this year. Insiders sold or filed to sell about 370,000 shares last month. Moves come after the stock more than tripled in value in 2023. In Canada, there was news of a number of start ups securing funding, totalling ~$220 mln, well weekly 2020 and 2021 highs, but nonetheless encouraging for investors’ innovation risk appetite.

Last week, Dow Jones rose 2.4%, S&P 500 was up 0.8% and Nasdaq composite gained 0.4%. Dow Jones hit a 52-week high, S&P 500 set a 2023 closing high, with Nasdaq not far behind. Russell 2000 also finally rose above a key level. Reddit is again holding talks with potential investors for an IPO. Rubrik, a Microsoft Corp.-backed cloud and data security startup, is also considering an IPO as soon as Q1 2024. Kim Kardashian’s Skims, valued this summer at US$4 billion, is also discussing strategic options including an IPO. Shein confidentially filed for U.S. IPO. Lineage Logistics is targeting a valuation of more than US$30 billion in a large 2024 IPO. Tiger Global’s biggest venture fund has a 18% loss after markdowns. Neuralink, Elon Musk’s brain implant startup, quietly raised an additional US$43 million. OpenAI is not planning to give Microsoft, and other investors board seats. Blackstone will buy Pet-Care site Rover for US$2.3 billion. Snowflake reported revenue growth of 32% as its CEO hails ‘stabilizing’ software market. Salesforce revenue rose 11%, the company said customers are embracing a ‘new era’ of AI. Amazon has grabbed the crown of biggest delivery business in the U.S., surpassing both UPS and FedEx in parcel volumes. SoFi is shutting down its crypto business, even as MicroStrategy made its biggest bitcoin purchase in years. In Canada, Shopify merchants set a sales record over Black Friday, Cyber Monday. Open Text will sell the AMC business to Rocket Software for US$2.28 billion in cash. Constellation Software was mentioned in the Economist magazine, it is now Canada’s second largest tech firm. Will it lead to the magazine curse? Sophic Clients, Kraken, Ionik, UGE, Clear Blue and Renoworks reported financials last week. New institutional investors appear to be accumulating Kraken based on recent trades, as the Company is hitting an inflection point.