Before the bell: Apple struggles with AI

A US data center specialist gains 10%, but Cisco and Apple suffer heavy losses. A hamburger chain reports results later today.

Yesterday, the Bel20 rose 0.6%, while the average European stock lost 0.4%. During the first part of the trading session, the Euro Stoxx 50 was firmly in positive territory. However, once Wall Street opened, those gains completely evaporated. The S&P 500 and the technology-heavy Nasdaq fell 1.6% and 2% respectively. Investors once again dumped technology stocks following disappointing results from Cisco (-12.3%) and news from Apple (-5%), which is again facing delays in the AI update of its virtual assistant Siri. Siri 2.0 is supposed to be capable of a wide range of tasks. For example, with a single voice command, the assistant should be able to locate a photo, edit it, and then send it to a contact. But as is often the case, investors prefer to see results before believing the promises. For Apple, Friday the 13th has arrived a little early.

This morning in Asia, the Hang Seng Index in Hong Kong is down 2.1%. Japan breaks its positive streak with its first negative trading day of the week. The Topix falls 1.2% and the Nikkei is down 0.9%. Even so, investors in Japanese equities have little reason to complain, as the indices have gained 5.5% and 6.8% respectively this week. However, Japanese stocks are not immune to the negative sentiment in the technology sector. SoftBank, a key shareholder in OpenAI, is down more than 8% in Tokyo. On a weekly basis, the technology holding still remains 10.6% higher. Today we will see results from healthcare real estate player Aedifica, vaccine producer Moderna and US fast-food chain Wendy’s. On the macroeconomic front, the US January CPI inflation figure will be released.

Data center company performing well

The pace of data center construction offers a good indication of the outlook for artificial intelligence. Equinix is a US REIT (Real Estate Investment Trust) specializing in data center infrastructure. In that sense, it can be seen as a kind of canary in the coal mine for artificial intelligence. And that canary appears to be thriving. Equinix expects to generate revenue between 10.12 and 10.22 billion dollar in 2026, whereas analysts had forecast just 10.07 billion dollar. This is supported by a well-filled order book. Equinix manages more than 280 data centers worldwide, including more than 100 outside the United States. The stock rose more than 10% yesterday on the New York Stock Exchange. A US REIT is structurally similar to a Belgian GVV (regulated real estate company). For that reason, Belgian GVVs are sometimes referred to abroad as BE-REITs.

Odido postpones IPO

It has been an unfortunate week for Odido. The Dutch mobile and cable provider, formerly known as T-Mobile, had planned to go public, but those plans have been postponed because investor appetite turned out to be weaker than expected and the valuation would have been significantly lower than desired. The Dutch telecom provider must now also admit to a massive data breach. During the weekend of 7 and 8 February, cybercriminals gained access to Odido’s customer contact system. The attackers subsequently stole the data of 6.2 million customers. Despite the heavy correction in the software sector, it seems clear that cybersecurity companies remain essential in an increasingly digital world.

Did you know…

that artificial intelligence is finding more and more practical applications? Australian slaughterhouses are now using AI to count sheep, allowing farmers and processors to finally sleep peacefully after decades of disputes.

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