Weekly Investment News and Analysis

Markets had a dramatic revival mid-week, as result, Dow Jones closed the week up 2.6%, S&P 500 was up 4%, and Nasdaq Composite gained 5.95% — their best weekly gains of the year. Market participants are widely expecting a Fed rate cut next week, with some disagreement over whether the Fed cuts 25 or 50 bps. OpenAI is reportedly raising up to US$7 billion at a US$150 billion valuation — making it worth more than 88% of S&P 500 firms. Notably, ChatGPT has passed 11 million paying subscribers. The CEOs of Nvidia, Microsoft, CoreWeave, Amazon Web Services and OpenAI met with the U.S. secretaries of energy and commerce at the White House on Thursday to discuss how the energy grid would handle growing power needs from AI and how to speed up the development of AI-focused data centers. Bitcoin prices and Coinbase shares fell after the U.S. presidential debate. Adobe shares tanked on lower year-end guidance. The European Court of Justice has ruled against Apple and Google on Tuesday, imposing billions in penalties against the tech giants. Apple will have to pay 13 billion euros in back taxes to Europe. In Canada, Sophic Client NowVertical Group streamlined its LATAM business structure, with a cash payment of US$130K satisfying all earn out obligations and the remaining holdback amount payable to the A10 vendors. Sophic Client, Plurilock entered a Critical Services partnership with TD SYNNEX to provide AI services in North America. Sophic Client, Clear Blue Technologies, announced a couple contracts in Africa. Shopify is adding PayPal to help process credit and debit card transactions for its Shopify Payments payment processing service in the U.S. BDC is writing its down venture capital portfolio by $220 million. BDC said in its report that it expects “challenging market dynamics for venture capital” to persist in fiscal 2025.

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.

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.

Last week, Dow Jones rose 0.7%, S&P 500 1.95% and Nasdaq composite 3.5%. Alameda-Backed miner, Genesis Digital Assets is weighing a US IPO — GDA traces its roots to one of the earliest crypto mining companies and received over US$1 billion worth of investment from the venture arm of Alameda Research. Northern Data is weighing its AI unit’s IPO at up to a US$16 billion value amidst some valuation controversy. Britain’s Revolut surged to a record profit as it seeks a US$40 billion valuation. SoftBank is discussing with banks how to fund investments of up to US$10 billion in energy-related projects, as artificial intelligence drives an enormous increase in demand for power. Tesla’s vehicle deliveries fell for the second quarter in a row but beat Wall Street’s estimates, sending the electric car maker’s stock up more than 8% to its highest price since January. Apple said on Friday it has approved Epic Games’ games marketplace app on iPhones and iPads in Europe. Amazon founder and executive chair Jeff Bezos plans to sell about US$5 billion worth of his stake in the company, his second major round of share sales this year. A U.S. stock rally supercharged by excitement over artificial intelligence is drawing comparisons with the dotcom bubble two decades ago, raising the question of whether prices have again been inflated by optimism over a revolutionary technology. However, tech stocks are more modestly valued now than at the peak of the dot-com bubble, trading at 31 times forward earnings, compared to as high as 48 times in 2000, according to Datastream. OMERS entered into an agreement to sell medical testing company LifeLabs to Quest Diagnostics for $1.35 billion. Canada enacted a Digital-Services Tax amid risks of a U.S. trade retaliation.

Last week, Dow Jones was down 0.1%, S&P 500 lost 0.1%, and Nasdaq composite was up 0.2%. Nasdaq and S&P 500 both reversed after hitting record highs Friday morning. Webtoon, which operates a smartphone app for authors and readers of comics jumped 9% following its IPO. Clario, a provider of software to help drugmakers advance treatments through clinical trials, has filed confidentially for an IPO and is targeting a valuation of US$10 billion+. SpaceX will value insider shares at US$112 each for a total valuation for the rocket company of almost US$210 billion. Anduril has lined up backers for one of the biggest venture deals this year as it is close to finalizing a US$1.5 billion investment, which will value the 7-year-old company at around US$12.5 billion, pre-money. Volkswagen Group plans to invest up to US$5 billion into electric vehicle maker Rivian, giving the startup a cash infusion to help it fund its heavy losses. Amazon hit a market capitalization of US$2 trillion for the first time in trading on Wednesday. OpenAI sales of conversational AI models passed a US$1 billion annual rate. Apple and Meta discussed integrating Meta’s AI assistant on Apple products. Amazon is planning to launch a ChatGPT-like consumer chatbot. In Canada, Sophic Client Legend Power reported its first orders for the city of New York. Sophic Client, Plurilock won Ua 814K three year contract with an existing customer to deliver cloud security to a major laboratory data and advisory firm. Sophic Client, Xcyte Digital announced the closing of the MCON transaction. Hut 8 will receive US$150 million from Coatue to provide AI computing power. Thoma Bravo is exploring the sale of Trader, a Canadian automotive marketplace and software provider. State Street, and Galaxy will jointly develop new digital assets ETFs. Target and Shopify teamed up to expand Target’s third-party marketplace.