Weekly Investment News and Analysis

Last week, Dow Jones fell 2%, S&P 500 lost 1.2%, and Nasdaq composite gave up 0.9%, but held its 10-day moving average. Bitcoin has staged a comeback, rallying 25% since BlackRock filed for its crypto fund. Banks holding debt from Elon Musk’s Twitter buyout might consider selling it as soon as Labor Day, the Wall Street Journal reported. Tesla deliveries rose 83% in the second quarter, in a sign that customers are galvanized by the electric vehicle maker’s frequent price cuts and new government subsidies. Rivian delivered 12,640 electric vehicles in the second quarter, a nearly three-fold increase from the same period last year when the EV upstart was in the thick of supply chain problems. Apple has been forced to make drastic cuts to production forecasts for the mixed-reality Vision Pro headset, unveiled last month after seven years in development (~130-150K in the first year vs. an initial sales target of a million units). ChatGPT app downloads are slowing down, BofA finds. Bluesky reaches 1 million downloads as Threads topples 70 million. China will control exports of some metals widely used in the semiconductor industry, its commerce ministry announced on Monday, the latest salvo in an escalating war over access to high-tech microchips between Beijing and the United States. In Canada, we saw positive funding announcements from Char Technologies, Prostar Holdings, MiMedia, Geologic AI, and a $30 million acquisition from Tiny.

As H1 2023 came to and end this Friday, S&P 500 index hit a 14-month high, Dow Jones and Nasdaq are back near 2023 highs. Apple is at a US$3 trillion market cap, for the first time. CNBC highlighted that tech stocks closed out best first half in 40 years. Even more stunning, it happened while the U.S. economy is still at risk of slipping into recession, reckoning with a banking crisis, and the Federal Reserve steadily increased its benchmark interest rate to the highest since 2007. While global economic concerns persist, highlighted by uncertainty surrounding the war in Russia and Ukraine and ongoing trade tensions with China, the NASDAQ could likely be in for some near term volatility, or see improved market breadth – we prefer the second option. That said, a sign of skepticism is the absence of a tech IPO market. There hasn’t been a notable venture capital-backed tech IPO in the U.S. since late 2021, and investors and bankers tell CNBC that the second half of the year is poised to remain quiet. M&A remains robust, with five notable transactions in the US just last week. Visa will acquire Brazilian fintech Pismo for US$1 billion. IBM will buy Apptio from Vista Equity Partners for US$4.6 billion. Databricks will acquire generative AI startup MosaicML for US$1.3 billion. Nvidia quietly acquired OmniML, an artificial intelligence startup that helps machine-learning models run on devices, rather than in the cloud. Defense technology company Anduril Industries has acquired Adranos, a startup that manufactures solid rocket motors for in-space and terrestrial applications. SpaceX is planning a sale of insider shares that would raise the company’s valuation to about US$150 billion, a rise from the company’s US$137 billion valuation reported in January. Fidelity Investments valued its stakes in Discord and Reddit slightly lower than it had previously. Shein, the Chinese online fashion retailer worth more than US$60, has registered with regulators for an initial public offering in New York.

The markets last week took a breather from multi week rallies, as we pointed out the NASDAQ looked a bit stretched last week. Dow Jones fell 1.7%, and S&P 500 and Nasdaq fell 1.4%. Tiger Global raised US$2.7 billion for its latest private tech fund, 55% less than the US$6 billion goal set last fall and 79% lower than its prior, US$12.7 billion fund. SoftBank Group CEO Masayoshi Son said on Wednesday that his tech investing conglomerate plans to shift its stance to “offence mode” amid excitement over advances in artificial intelligence. Virgin Galactic raises US$300 million, seeks another US$400 million to expand spacecraft fleet. Cloud banking vendor nCino explores sale. Amazon’s iRobot deal faces EU antitrust investigation, sources say. Shares of UK online supermarket Ocado soared on talk of Amazon bid interest. Nvidia board member cashes out on the chipmaker’s surging stock, selling over 100,000 shares for US$51 million. Cisco launches new AI networking chips to compete with Broadcom, Marvell. Google and OpenAI talk to publishers about licensing content for AI. Rivian to adopt Tesla’s North American charging standard. In Canada, Quisitive announced $6 million bought deal financing, in sign that could potentially positive investor deal appetite in H2 2023. Railtown Technologies announced an increase to its LIFE non-brokered private placement to $2 million. Calgary-based startup Eavor, which offers geothermal technologies for producing energy, has raised approximately $80 million in what it called the first close of its Series B round. Québec City-based Poka, is set to be acquired by Swedish enterprise software giant IFS, in a reported $200 million deal. Sophic Client, OneSoft Solutions, is a compelling opportunity for investors who want to invest in an AI company currently monetizing its solution with globally known brands. OneSoft has commercialized machine learning for years with major industry customers, and is forecasting 151,000 miles of pipeline miles on SaaS subscription in 2023, or ~25% of the U.S. addressable pipeline market.

The market had another strong week, especially the Nasdaq, even after some modest losses Friday. With the Nasdaq now appearing stretched from its moving averages, some caution may be warranted, especially with the handful names driving most year-to-date gains. Last week, Dow Jones was up 1.25%, S&P 500 was up 2.6% (best weekly performance since March), Nasdaq was up 3.25% for its 8th consecutive weekly advance. Arm in talks with big clients about investing in IPO, which include, Intel, Alphabet, Apple, Microsoft, TSMC, and Samsung. Salesforce pledges to invest US$500 million in generative AI startups. Microsoft CFO says OpenAI and other AI products will add US$10 billion in revenue. Nvidia GPUs are so hard to get that rich venture capitalists are buying them for the startups they invest in. AMD reveals new A.I. chip to challenge Nvidia’s dominance. Nasdaq announced a US$10.5 billion deal to scoop up a behind-the-scenes tech provider. Bloomberg reported Apple is aiming to release a more affordable AR/VR spatial computer product by the end of 2025. Netflix subscriptions rise as password-sharing crackdown takes effect. US cyber insurance premiums surged 50% in 2022 as increased ransomware attacks and online commerce drove demand for coverage. In Canada, Executives at Shopify began discussing a sale of the e-commerce giant’s logistics business in late 2022, even as they publicly committed to investing more money to build out its fulfillment network, The Information reported on Tuesday. Québec City-based automotive software provider LeddarTech has inked a SPAC deal to go public on Nasdaq. US-made wind and solar components are now cheaper than imports, according to researchers. New guidance from the US Treasury could unleash billions in renewable energy investment. Previously, to make the most of the tax credits available to them, renewable energy project developers had to create complex and expensive tax equity deals. Sophic Client Clear Blue received a $375K order. This contract increases Clear Blue’s 2023 Year-To-Date bookings to $4,975,000, of which $4,325,000 is expected to be recognized in 2023. Dapper Labs made an investment in Web3 gaming company GameOn.

Last week, Dow Jones rose 0.3%, S&P 500 was up 0.4%, and Nasdaq composite was up 0.1%, the small-cap Russell 2000 rose 1.65%. As the S&P was just above the 20% rise threshold, it’s technically a new “bull market”. According to market watchers, it’s taken longer to get here than any other Bull market since the 1950s. While market leadership has remained very narrow and AI focused, the move up in the Russell 2000 is encouraging. Apple on Monday unveiled a headset that blends virtual reality with augmented reality—digital content and apps overlaid on the real world. Shares of Unity Software popped more than 11% Monday after Apple announced that it was working with the company on its new headset. The SEC is cracking down on crypto and sued Coinbase, Binance and its CEO, Changpeng Zhao. Elon Musk’s Neuralink saw its valuation soar to US$5 billion after private stock trades. Intel will raise about US$1.5 billion from Mobileye stake sale. GitLab shares surged 18% on 2Q, FY24 outlook. Shares of Stitch Fix surged more than 25% on Wednesday, after company laid out plans to further cut costs and focus on the U.S. Billionaire investor Stanley Druckenmiller plans to hold on to Nvidia stock for at least the near future as the chipmaker is exposed to an artificial intelligence trend could be as “transformative as the internet.” General Motors will make its electric vehicles compatible with Tesla’s supercharger network, the series of 12,000 chargers across the country for recharging the batteries of EVs, the company said Thursday. In Canada, Toronto based OpenAI rival, Cohere was in the news last week, as it raised US$270 million from Oracle, and Nvidia, bringing its total funding to US$435 million, and the Company is also preparing to work closely with Oracle. Sophic Clients UGE International and Clear Blue presented at the inaugural Canadian Climate Investor Conference in Toronto last week.

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.