Before the bell: one AI concern less

Oracle reported excellent results and NIO posts its first ever profit.

European stock markets closed unanimously higher yesterday. The Euro Stoxx 50 rose 2.7% and the Bel20 gained 1.8%. The biggest gainers among European stocks were the German chipmaker Infineon Technologies (+6.1%) and Prosus (+9.6%), the holding company behind China’s Tencent. Prosus surged after Tencent announced the launch of a new AI agent called “WorkBuddy.” In the United Kingdom, the share price of homebuilder Persimmon climbed 6.6% following better-than-expected results in what remains a weak British housing market. In Brussels, Melexis (+3%) and Umicore (+4.2%) also performed well. Across the Atlantic, stock markets also opened in the green at the start of the US trading session. However, both the S&P 500 and the technology-heavy Nasdaq gave up their gains towards the end of the day. The share price of NIO rose 15.4% on the New York Stock Exchange after the Chinese car manufacturer reported its first quarterly profit ever.

This morning in Asia, the Hang Seng Index in Hong Kong is moving sideways while Japan’s Topix is up 1%. Today we will receive results from Agfa-Gevaert and TINC in Belgium. In the Netherlands, Basic-Fit will publish results, while in the United Kingdom CVC Capital Partners will report, in Germany Rheinmetall will release figures, and in the United States Campbell’s will present its results. On the macroeconomic front, investors will be watching the US inflation data for February. In addition, Euronext will announce the annual reshuffling of the Bel20 after the close.

Japanese skincare

The Japanese lifestyle chain Muji has a store in the heart of Brussels as well. The company aims to conquer the world with skincare products based on fermented rice bran. This ingredient has been used for centuries in traditional Japanese skincare. It therefore comes as no surprise that the skincare segment of the chain has become a success story in its home market. Revenue from this segment doubled within two years to around 100 billion yen (545 million euro) and now accounts for roughly 13% of the company’s total revenue. Muji now wants to roll out that growth story globally. The products have recently been introduced in China, Hong Kong, Taiwan and South Korea. The formulas are based on plant-based recipes in simple packaging. That such products resonate with consumers has also been demonstrated by brands such as Rituals and Aesop, which was acquired by the French cosmetics giant L’Oréal.

Oracle beats expectations

Last night Oracle published its much-anticipated results. The technology company’s quarterly revenue rose 22% to 17.2 billion dollar. Analysts had expected only 16.9 billion dollar. Revenue from the cloud segment increased by 84%, again exceeding expectations. Oracle is investing heavily in data centres in order to serve customers such as OpenAI and Meta. Six months ago investors were still deeply concerned about the enormous debt Oracle had taken on to finance large investments in AI data centres. As a result, the share price lost more than half of its market value within six months. But those investments now appear to be paying off. The company expects revenue of 90 billion dollar in the new fiscal year and plans to keep its investments stable at around 50 billion dollar. Investors applauded and pushed the share price 8.7% higher in after-hours trading.

Did you know…

that Amazon has launched one of the largest bond issuances ever? The technology giant aims to raise between 37 and 42 billion dollar to finance its massive investments in artificial intelligence and data centres.

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