Before the bell: make AI great again

Today is all about artificial intelligence, following the announcement of a major investment in the sector. Netflix and Sofina are also contributing to the positive market sentiment.

Wall Street had another strong trading day. While the Nasdaq gained 0.6%, the S&P 500 rose by 0.9%, and the Dow Jones climbed 1.2%. 3M (+4.2%) was rewarded for its strong pre-market earnings report. Caterpillar (+3.6%), Nike (+3.3%), and UnitedHealth (+3%) also performed well. Prologis, a real estate investor specializing in logistics properties, did even better with a 7.1% gain. Apple (-3.2%) retreated following a downgrade, and Walgreens Boots Alliance fell 9.2% after the U.S. Department of Justice filed a lawsuit against the pharmacy chain, alleging improper dispensing of opioid medications. European markets were largely flat yesterday, although Novo Nordisk (+4%), LVMH (+2.7%), and Hermès (+2.6%) managed to advance.

This morning, Japan’s Topix rose 0.9%, while Hong Kong’s Hang Seng Index dropped 1.8%. Japanese tech investor SoftBank (+10.5%) surged on news of an alliance with Oracle (after-hours +4.5%) and OpenAI. In the U.S., Procter & Gamble and Johnson & Johnson are set to release earnings today. In Belgium, Gimv is hosting an investor day. Barry Callebaut reaffirmed its forecast but noted that the chocolate sector remains challenging.

Record quarter

In the third quarter, Netflix added 5 million subscribers, bringing the total to 282.7 million by the end of September. Analysts had predicted the U.S. streaming giant would attract around 10 million more viewers in the final quarter, but that forecast proved far too conservative. In the last three months of 2024, Netflix gained an impressive 19 million new subscribers, bringing its total to approximately 302 million by December 31. The boxing match between Jake Paul and Mike Tyson generated extra publicity and subscribers for Netflix. The company plans to further expand its content offerings this year and has announced its first price hike in two years. Shareholders are thrilled—the update was released after the market closed, but the stock price is expected to rise 14% when trading resumes.

A lot of money

Sofina announced yesterday after the market closed that its net asset value stood at 10.1 billion euro at the end of last year, up from 9.5 billion euro six months earlier. The per-share value increased from 286 euro to 307 euro. With yesterday’s closing price at 232 euro, the stock is trading at a 24.4% discount. Analysts believe this discount is unjustified and argue that a 10% discount would be more realistic, implying a share price of 276.3 euro—19% higher than the current price. By investing in Sofina, small investors can gain exposure to various unlisted companies in the firm’s portfolio. This private equity portfolio includes holdings in ByteDance (TikTok), SpaceX, and pollination company Biobest.

Did you know…

Sofina has also invested in OpenAI? The AI company, led by Sam Altman, plans to invest 500 billion dollar in artificial intelligence infrastructure alongside SoftBank and Oracle. The initiative, called “Stargate,” was announced last night by Donald Trump during a White House press conference.

This article was translated from Dutch and was originally published on Spaarvarkens.be.