Before the bell: Amazon becomes a competitor to SpaceX

Markets continue to perform strongly, bank results are met with mixed reactions, and ASML reports earnings.

Although the International Monetary Fund warns of a deterioration in the global economy, Wall Street once again delivered an impressive performance, with both the S&P 500 (+1.2%) and the Nasdaq (+2%) posting solid gains. Meta Platforms (+4.4%), Amazon (+3.8%), Nvidia (+3.8%) and Microsoft (+2.3%) outperformed the indices. The results released before the open by JPMorgan Chase (-0.8%), Wells Fargo (-5.9%) and Citigroup (+2.6%) were received with mixed reactions. European markets also moved higher, gaining an average of 1.4%. Lens manufacturer EssilorLuxottica (+3.9%) and Siemens (+3.7%) stood out. In Brussels, the Bel20 gained 1.1%, with stronger performances from Argenx (+4.1%) and Azelis (+2.6%).

This morning, Asian investors are off to a positive start. In Hong Kong, the Hang Seng Index rises 0.8%, while in Japan both the Topix (+0.6%) and the Nikkei (+0.9%) are higher. The Kospi is up nearly 3% today, with the South Korean index making up for lost ground, as the country imports almost all of its oil and gas from the Persian Gulf. In France, Hermès reports results today, while in the United States it is the turn of Bank of America and Morgan Stanley to publish their figures. At Proximus, shareholders gather for the annual general meeting.

ASML does not disappoint

At our northern neighbours, ASML Holding reported results this morning. Quarterly revenue rose 13% to 8.8 billion euro, while profit reached 2.8 billion euro (+17%). That is slightly better than expected. The chip equipment manufacturer from Veldhoven continues to benefit from heavy investment in artificial intelligence and data centers. The current quarter should be no different, as ASML expects revenue between 8.4 and 9 billion euro. The profit margin is projected at 51% to 52%, slightly lower than the previous quarter (53%). For the full year, ASML expects revenue of 36 to 40 billion euro and a gross margin of 51% to 53%. ASML remains a fantastic company. Will the share price rise sharply today? Not necessarily. Investors have become accustomed to strong results. Moreover, the stock is already up 39% this year and 118% over the past twelve months. Profit-taking would therefore be entirely logical.

Competition for SpaceX

SpaceX may be heading for an IPO soon. But Elon Musk’s company is facing competition. Amazon announced after the close yesterday that it is bidding for Globalstar, offering 11.6 billion dollar. With Globalstar, Jeff Bezos can compete with Starlink, the satellite communications business owned by SpaceX. Great minds think alike: both Musk and Bezos are investing heavily in satellite communications. This market could well double in the coming years to 200 billion dollar. By 2028, Amazon plans to offer these services via subscription, creating competition for telecom operators and companies that own communication towers. Globalstar already works with Apple, and Amazon intends to continue that partnership. Apple and Amazon have already reached an agreement on this. The satellite business is becoming attractive. Everything is changing. Everything is evolving. As an entrepreneur or investor, if you are not careful, you can quickly go from hero to zero. Shareholders of companies led by Elon Musk and Jeff Bezos benefit from having visionary leaders. The same can be said for Mark Zuckerberg (Meta), Jensen Huang (Nvidia), Sundar Pichai (Alphabet) and Wang Chuanfu (BYD). These are the kinds of companies you want in your portfolio.

Did you know…

that Elon Musk and Jeff Bezos have long been interested in space and satellites? Musk founded SpaceX in 2002, while Bezos launched Blue Origin in 2000.

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