Weekly Investment News and Analysis

Last week Dow Jones rose 2%, S&P 500 was up 1.8%, Nasdaq was up 2%, and the small-cap Russell rose 3.3%. Market leadership remains concentrated in the AI, semiconductors and software space. 5 trillion-dollar companies — including Nvidia, Apple, and Amazon — have been behind most of the S&P 500’s 10% gains this year. T. Rowe Price has marked down its stake in Canva by 67.6%. Twitter is now worth just 33% of Elon Musk’s purchase price, Fidelity says. Fidelity also cut its Reddit valuation by 41% since its 2021 investment. Shares of C3.ai plunged 21% after its earnings outlook fails to live up to the AI hype. Twilio shares gain after a report on meetings with an activist. SentinelOne’s shares plunged 35% after disappointing results and guidance. Okta shares plummet after CEO acknowledges sales ‘uncertainty’. Salesforce CEO Benioff predicted an AI spending boom. Even as a number of prominent artificial intelligence researchers signed onto a joint statement drawing attention to the dangers of runaway AI. In Canada, recently laid off Shopify employees filed a $130 million class-action lawsuit. Westbridge reached definitive agreements to monetize 1.4 GW Alberta solar PV portfolio for an aggregate cash purchase price, between $217 million and $346 million subject to adjustments. Generative AI Solutions intends to raise up to $5 million through a non-brokered private placement. Canadian AI computing startup Tenstorrent (valued at $1 billion) and LG partner to build chips. Sophic Clients UGE International and Clear Blue will be attending the inaugural Canadian Climate Investor Conference Thursday June 8th at the Hyatt Regency Toronto. Sophic Client Kraken Robotics announced a $9.5 million contract with the Navy of a large Asia Pacific country. The Company also reported Q1 results, and reiterated guidance — for fiscal 2023, Kraken expect revenue to be in the $66 – $78 million range and adjusted EBITDA in the $12 – $17 million range.

Last week, Dow Jones fell 1%, S&P 500 was up 0.3%, and Nasdaq composite rose 2.5%. In a single session, Nvidia’s market cap swelled by US$184 billion, only Apple, Amazon and Microsoft have ever posted higher dollar gains in a single day, each by an extra US$7 billion at $191 billion. Analysts called Nvidia’s report “amazing,” “epic,” “stunning,” “unfathomable” and “jaw-dropping.” About six-in-ten U.S. adults (58%) are familiar with ChatGPT, though relatively few have tried it themselves, according to a Pew Research Center survey conducted in March. Shares of Snowflake dropped more than 12% in extended trading after the database provider reported its slowest annual sales growth since its 2020 IPO and cut its fiscal year sales forecast. Meta was fined a record US$1.3 billion over EU user data transfers to the U.S. Elon Musk finally got approval from the Food and Drug Administration to start implanting his company’s brain chips in humans, Neuralink announced Thursday. China’s top Internet regulator said Micron Technology’s products posed a national security risk and ordered companies involved in critical information infrastructure to stop buying them. The chief executive of Nvidia, warned that the US tech industry is at risk of “enormous damage” from the escalating battle over chips between Washington and Beijing. Ford CEO Jim Farley and Tesla CEO Elon Musk announced that in early 2024 more than 12,000 Tesla Superchargers will be operational with Ford vehicles. In Canada, PopReach announced new US$115 million syndicated credit facility. Sophic Client UGE International reported one of its strongest growth quarters in its history, based on numerous metrics. Sophic Client Legend Power reported Q2 (Mar) F2023 financial results — Many new large opportunities continued to advance in our sales funnel, and we continue to believe we will hit our target bookings this year,” said Randy Buchamer, Legend CEO. A handful of deals could bring over $10 million in new potential bookings.

Last week, Dow Jones was up 0.4%, S&P 500 was up 1.65%, Nasdaq rose 3%. More data confirmed last week’s data of falling private valuations: For the first time in more than a decade, returns for venture funds were negative for three consecutive quarters last year, according to research firm PitchBook Data, as investors finally began to mark down startups that had ballooned in value. Initial data for the fourth quarter also show a negative quarterly return. Tiger Global is looking to offload some of its startup stakes. Snowflake is reportedly nearing the acquisition of search startup Neeva. Software company New Relic is in talks to be sold to private equity. EU approved Microsoft’s US$69 billion acquisition of Activision. Buffett exited TSMC while hedge funds Coatue, Tiger Global bought. Billionaire Stanley Druckenmiller’s family office pumped a combined US$430 million into Nvidia and Microsoft stocks in big, bold AI bets. The manufacturing cost of Apple’s mixed reality headset exceeds US$1,500 per unit. But internal projections give it the potential to eventually be as big as the iPad or the Apple Watch, as the company adds features and reduces the price with subsequent versions. Almost 5 million people are using Netflix’s ad tier. YouTube says revenue rose to US$40 billion, boosted by subscriptions. Disney is reportedly preparing a standalone ESPN streaming service. Instagram is reportedly testing a Twitter competitor — and the first leaked images indicate a summer release. In Canada, Sophic Client OneSoft reported Q1 revenue growth of 72%, and expects approximately 50% revenue growth in 2023and to achieve near cash-neutral monthly operations late in 2023. Sophic Client Kraken received $1.1 million of synthetic aperture sonar orders. Sophic Client Clear Blue Technologies received a $300,000 roadway expansion project in Oregon. Year to date, Clear Blue’s bookings are $4.6 million, of which $4 million is expected to be recognized in 2023. Canadian venture capital continues to fall back to pre-pandemic levels, according to CVCA. Despite seeing a decline in venture funding both quarter-over-quarter and year-over-year, Québec attracted more investment than any other Canadian region in the first quarter of 2023.

Markets looked a bit weaker by Friday’s close, as Dow Jones fell 1.1% last week, S&P 500 was down 0.3%, and Nasdaq composite was up 0.4%. The median valuation for growth-stage startups fell to US$90 million in the first quarter, a 75% drop from 2021, according to research firm PitchBook. Klaviyo filed confidentially for a U.S. IPO. PayPal’s profit rises 56% as expenses kept in check. Airbnb reported 20% higher revenue in the first quarter, which it credited to a roughly equivalent increase in the number of nights and experiences booked. Palantir soars 15% after company reports strong earnings and says demand for its AI tool is ‘without precedent’. Berkshire Hathaway cuts stake in EV maker BYD as Warren Buffett and Charlie Munger say they don’t want to compete against Elon Musk. Tesla recalls virtually every car it has sold in China. Shortage of AI servers prompts Microsoft-Oracle negotiations. Google CEO discloses ‘Gemini’ AI to rival OpenAI’s GPT. Metaverse could contribute up to 2.4% of US GDP by 2035, a new study shows. Apple’s Reality Pro headset still coming to WWDC, but Apple is ‘anticipating production issues’. Meta unveils generative AI tool for advertisers. Nintendo warns of big slowdown in Switch console sales. Netflix reportedly plans to cut spending by US$300 million this year. Sophic Client, Kraken Robotics received a $16 million order for SeaPower batteries. Sophic Client LuckBox announced April KPIs including Global Customer Deposits and Player Growth – the Company announced a major step towards profitability in April, by outperforming last month’s record player deposits, all with 40% less Marketing spend. Crypto mining companies like Hive and Hut 8 Mining are finding opportunities to repurpose their GPU-based equipment for another industry on the precipice of a possible boom: artificial intelligence, according to Bloomberg.

After another busy earnings week, Nasdaq was up ~0.1%, as it re-approaches its 2023 highs, Dow Jones was down 1.2% and S&P fell 0.8%. SoftBank’s chip maker Arm Ltd has filed with regulators confidentially for a U.S. stock market listing, Arm said last Saturday, setting the stage for this year’s largest initial public offering. Alibaba’s global online commerce arm weighs a US IPO. Chegg shares plunge 38% after ChatGPT warning. Shares of AMD dropped more than 5% after the chip maker reported a 9% revenue decline in the first quarter. Apple’s revenue fell 3% despite iPhone sales growth. Samsung surpasses Apple in smartphone shipments by 1% amid a persisting market decline. Qualcomm gives a light forecast, phone chip sales fall 17%. Uber revenues rise 29% as ride-hailing business expands. Coinbase revenue drops 34%, and the Company cuts back on costs. OpenAI reportedly lost US$540 million developing ChatGPT in 2022, as the business is expected to be very capex intensive — OpenAI CEO Sam Altman may be aiming to raise up to US$100 billion in the next few years to develop artificial intelligence so smart it can improve itself. Google DeepMind boss predicts AI as powerful as the human brain could arrive within the next few years. IBM to pause hiring for jobs that AI could do. Viasat’s recent satellite launch adds power and flexibility in satellite broadband competition — Potential positive for Sophic Client Clear Blue contract wins. In Canada, venture capital investment in Q1 2023 dropped by 82 percent compared to last year. Sophic Client Kraken Robotics (PNG-TSXV, KRKNF-OTC) forecasts 2023 revenue to be in the $66 – $78 million range and adjusted EBITDA in the $12-$17 million range. The mid-point guidance range ($72 million in revenue and $14.5 million in EBITDA) implies revenue growth of 76% over 2022 and adjusted EBITDA growth of 275%. Shopify soared 28% on strong earnings and the sale of its logistics unit, the Company plans to slash headcount. BlackBerry is considering breaking up its businesses as it reviews its portfolio.

After a rough Tuesday, and a week full of earnings releases, the markets closed the week up. Dow Jones rose 0.9%, so did S&P 500, Nasdaq was up 1.3%. Meta’s Q1 revenue increased 3% as ad business slowly recovers, sending the stock surging after hours. Roku reported flat Q1 revenue, and expects the weak ad market to persist. Intel reported a 36% sales decline, and expects a second half rebound. Sales at Amazon’s cloud computing business grew 16% in the first quarter, the lowest year-over-year growth rate since it started breaking out that segment. Microsoft’s US$68.7 billion Activision takeover has been blocked by UK competition regulator. Apple won its appeal in the App Store legal battle with Epic Games: In one of the most significant battery breakthroughs in recent years, the world’s largest battery manufacturer CATL has announced a new “condensed” battery with 500 Wh/kg which it says will go into mass production this year. Sophic Clients, Kraken Robotics (PNG-TSXV, KRKNF-OTC), OneSoft Solutions Inc . (OSS-TSXV, OSSIF-OTC), and UGE International (UGE-TSXV, UGEIF-OTC) presented at the Planet MicroCap Showcase in Las Vegas this past week, their presentations are available to rewatch in this post. UGE International achieved a notice to proceed milestone for 2.7MW community solar project in Oakland, Maryland. UGE has reached NTP on 12.7MW of projects and commercial operation on 1.4MW of projects so far this year. Sophic Client Clear Blue Technologies announced 2022 financial results. The Company does not need to raise capital, expects to be EBITDA positive by FYE2023, and significant order intake year to date of $3.5M, of which $3.2M to be realized in 2023. Sophic Client LuckBox (LUCK-TSXV, LUKEF-OTC) filed 2022 results. 2022 set the foundation for 2023 player and global betting handle growth, both of which were up significantly following Q4 2022. University of Toronto, and Université de Montréal got a combined $325 million as part of $1.4 billion federal investment into university innovation. Smart display company E2ip Technologies raised $120 million. Ontario Teachers fund to steer clear of crypto after US$95 million FTX loss.

The sideways chop in the markets continued last week, Dow Jones lost 0.2%, S&P 500 fell 0.1%, Nasdaq composite was down 0.4%. Market breadth remains poor, and most investors we speak with remain on the sidelines as they expect that in the near term, either breadth will increase, or indexes will pull back and remain range bound. Event ticketing company SeatGeek filed confidentially to go public. Silver Lake will acquire Germany’s Software AG for €30 a share (50% premium to Friday’s close). Lululemon is exploring a sale of Mirror fitness unit it bought in 2020. Meta begins its next round of layoffs. Lyft is planning a round of layoffs. AI is coming soon to Google Search with ‘Magi’ as Samsung considers making Bing the default search engine on its devices. Google’s big AI push will combine Brain and DeepMind into one team. Elon Musk is planning an artificial intelligence start-up to rival OpenAI. SpaceX’s 400-foot Starship rocket exploded during its inaugural launch. Apple launches high-interest savings accounts with Goldman. Kroger is now rolling out Apple Pay support to stores across the United States. TSMC seeks up to US$15 billion from U.S. for chip plants but objects to conditions. The US Energy department commits US$3 billion to expand rooftop solar access. Under the deal, Sunnova will devote a portion of the lending to homeowners with below-average credit scores and to Puerto Rico. In Canada, last week saw some interesting VC funding announcements. Miovision purchased fellow traffic management company Global Traffic Technologies (GTT) in a deal valued at US$107 million. The acquisition is backed by a recent $260 million investment from various investors. Sophic Client Kraken Robotics, announced orders totaling $7 million. Sixteen projects under Canada’s Ocean Supercluster (OSC) will see $52 million in funding flow towards them, including Kraken Robotics. Sophic Client Legend Power’s next generation SmartGATE more than doubled the product’s previous generation’s financial benefit across initial 30 installations.

The stock market was mixed last week, Dow Jones rose 0.6%, S&P 500 fell 0.1%, and Nasdaq fell 1.1%, even as the 10-year US Treasury yield tumbled 22 basis points to 3.28%, a seven-month low. Global startups raised US$76 billion in the first quarter—a figure that includes US$10 billion raised by OpenAI and US$6.5 billion raised by Stripe—a steep decline from the same period last year. Instacart boosted its valuation 18%, mirroring stock market bounce. Marketing software company Klaviyo has hired bankers and is targeting a public debut as early as this fal. C3.ai plunged 26% after a short-seller said the buzzy AI company has ‘serious accounting and disclosure issues’. The world’s largest AI fund, the Global X Robotics & Artificial Intelligence ETF to a stronger start in 2023 than even the red-hot Nasdaq 100. Google’s CEO said Chatbot feature is coming to search. Ahead of Apple’s US$3k headset, only 4% of teens who own a VR device actually use it. Walmart is building a nationwide electric vehicle fast charging network. Tesla’s cut prices in the US yet again, this time by as much as US$5,000. In Canada, Vancouver-based Web3 startup LayerZero Labs is now valued at $3 billion after closing a $120 million Series B funding round. WonderFi, Coinsquare, and CoinSmart will merge as Canada’s crypto industry consolidates. Sophic Client, Jasper Commerce closed a second and final tranche of a Convertible Debenture unit financing, raising a total of $900,000 from insiders and a new institutional investor. Sophic Client UGE reported fiscal year 2022 financial results, and on the earnings call, highlighted positive expected balance sheet milestones. Sophic Client LuckBox announced strong March KPIs & record Q1, as March Global Betting Handle was $5.0 million, up from February’s record $2.8 million, and the registered player base reached 387,000. Sophic Client Swarmio Media, introduced a new payment solution, to drive accretive revenue growth. The company and etisalat by e& (largest telecom operator in the MENA region) also launched a promotional campaign for gamers in the Arena esports platform.

After a in uninspiring start, the markets made a bullish turn in the second half of the week. Dow Jones was up 3.2%, S&P 500 rose 3.5%, and Nasdaq was up 3.4%. Twitter was recently valued at US$20 billion in a new employee stock grant, even as Fidelity marked down its stake in Twitter by another 7.9%, bringing its total writedown on its stake since its acquisition to 63.5%. Disney cut its metaverse division as part of a broader restructuring. EA is laying off 6 percent of its workers. Alibaba stock jumped 10% as the Chinese tech giant begins its biggest reorganization ever and eyes new IPOs. Alphabet’s DeepMind and Google Brain set aside rivalry, and target OpenAI. Microsoft now claims GPT-4 shows ‘sparks’ of general intelligence. Bill Gates says self-driving cars will be as revolutionary as the PC after riding in one. Apple reportedly demoed mixed-reality headset to executives in the Steve Jobs Theater last week, even as mass production was reportedly pushed to Q3 2023. Netflix appears to be working to bring games to TVs with the iPhone as a controller. Meta Platforms will allow European users to opt out of personalized advertising on Facebook and Instagram after the European regulators in January fined Meta 390 million Euros for unlawfully forcing users to consent to personalized ads in its apps. Bitcoin has stormed to a 72% gain over the last three months and is on track for its strongest quarter in two years. The token has outperformed both the Nasdaq 100 and gold, which are up 15% and 9%, respectively, in the same stretch. In Canada, Sophic Clients, UGE and Jasper, both plan on closing second tranches of their previously announced financings in the coming weeks, with Jasper announcing an increase of the offering to $900,000 from $750,000. UGE’s Green Bonds’, which mature on June 30, 2027, and bear interest at a rate of 9% per annum, payable semi-annually, second tranche is expected to close by the end of April 2023.

Last week, major market indices posted good gains, despite a volatility during the week. Dow Jones was up 1.2%, S&P 500 rose 1.4%, and Nasdaq composite was up 1.7%. Consensus seems to be that the Fed’s rate hikes will pause in May, followed by rate cuts in July. Accenture announced it will cut 19,000 jobs (2.5% of its workforce), and Amazon will shed 9,000 more jobs, adding to the 18,000 employees Amazon had already cut starting in November. Block slides 15% after short-seller Hindenburg says its 2-year investigation indicates the company has ‘wildly overstated’ genuine user counts. Nvidia CEO says generative AI is an ‘iPhone Moment’. Apple to splash US$1 billion a year on films to break into cinemas. Netflix’s ad-supported tier is reportedly gathering momentum in the US, and the Company plans to release 40 more games this year. Microsoft is planning a mobile games app store to rival Apple and Google. Coinbase says it could get sued by the SEC, which has identified ‘potential violations of securities law’ at the exchange. Nasdaq to launch crypto custody service by end of June. Microsoft is building a cryptocurrency wallet into its Edge browser. In Canada, Magnet Forensics’ shareholders approved the $1.8 billion Thoma Bravo acquisition. Cormark launched research coverage on Sophic Client Kraken Robotics with a buy rating and $1 price target. Sophic Client UGE achieved a Notice to Proceed milestone for a 2.7MW Community Solar Project — With this project, UGE has reached NTP on 6.2MW of projects and commercial operation on 1.4MW of projects so far this year. Sophic Client LuckBox “to reveal new product in Q3”.as CEO Thomas Rosander recently took part in a Q&A session with Proactive Investors. From IPOs to busts: What went wrong for public esports companies — Sophic Capital, recently spoke with Esports.net, which provides news & guides for a growing Esports community.

After a wild week, which saw sharp losses, a bounce back and more losses, Dow Jones was down 0.2%, S&P 500 rose 1.4%, and Nasdaq was up 4.4%. The 10-year Treasury saw huge daily swings as well, and the two-year yield fell ~75 basis points to 3.85%, in its biggest weekly drop since 1987. Bitcoin notched a 9-month high after inflation data bolsters speculation of smaller rate hike. Silicon Valley Bank’s parent company filed for bankruptcy after worry spread among its long-established customer base of tech startups, prompting regulators to seize the firm’s banking unit. Hedge fund Tiger Global marked down the value of its venture capital funds in 2022 by 33%, or US$23 billion. China’s robotaxi upstart WeRide confidentially filed for an IPO. Amazon and Rivian are considering ending their exclusivity agreement. Google unveils new AI tools for Cloud, Workspace. Microsoft announced Copilot: the AI-powered future of Office documents. OpenAI on Tuesday began selling access to GPT-4, the newest version of its machine-learning model. Baidu debuted China’s answer to ChatGPT via a recorded video, disappointing investors. Meta will cut another 10,000 jobs and cancel ‘low priority projects’. Amazon plans to offer first satellite internet service next year. YouTube TV is raising its prices by US$8 per month, citing in part rising content costs. Tesla relaunches Powerwall sales. In Canada, Last week’s sudden collapse of Silicon Valley Bank (SVB) could choke funding for Canada’s technology start-ups and place them in the hands of domestic lenders who may be more selective in financing new ventures. Sophic Client Swarmio received an interest-free loan of $1 million from a strategic shareholder. Sophic client UGE achieves a Notice to Proceed Milestone for 2.7MW community solar project in Maryland.

Last week, the market suffered big losses last week as SVB Financial collapsed, which along with crypto bank Silvergate Financial sparked intense losses for bank stocks. Dow Jones lost 4.4%, S&P 500 fell 4.55%, and Nasdaq lost 4.7%. Silicon Valley Bank failed on Friday morning, as the Federal Deposit Insurance Corp took control of the bank, deepening uncertainty for startups and venture capital firms that rely on the bank for financial services. Several public companies disclosed they had money on deposit at failed Silicon Valley Bank, including Roku and Roblox, a sign of how widespread SVB’s tentacles reached. Stripe’s fundraise to reach US$6 billion, at a US$50 billion valuation, as the company faces a US$3.5 billion tax on employees’ shares expiration. Chinese online fashion retailer SHEIN is set to raise around US$2 billion in a new funding round this month and is aiming for a U.S. listing in the second half of this year. Uber is considering spinning off freight logistics division. Meta plans new layoffs that could match last year’s in scope. Microsoft Bing hits 100 million active users in bid to grab share from Google. In Canada, Toronto-based startup Cohere is among the first four companies to receive funding from Salesforce Ventures’ newly-launched US$250 million fund. As the battle to stop Magnet Forensics’ $1.8 billion sale rages on, an independent advisor has recommended shareholders vote for the deal. The Waterloo startup released a statement on Wednesday noting that Egan-Jones Proxy Services has recommended it gets approved. Sophic Client UGE announces placement of up to US$3 million of project development green bonds. Sophic Client Kraken Robotics received nearly $3 million in orders for its Synthetic Aperture Sonar for NATO and US defence customers. Sophic Client LuckBox announces triple digit growth across core KPI’s, as Global betting handle in February reached a record $2.8 million, as the player base now stands at 350,000.