Before the bell: MIGA: Make Intel Great Again

After several days of flat trading, sellers took control yesterday. Of course, every stock sold is also bought, but sellers were more eager, willing to accept lower prices to cash in their hefty gains. The S&P 500 slipped 0.6%, while the Nasdaq fell 1.5%. Palantir dropped nearly 10%, Nvidia slid 3.5%, Meta lost 2%, and Microsoft fell 1.4%. Alphabet shed just 1%—as the cheapest of the “Magnificent 7” it has some buffer. Home Depot (+3.2%) was rewarded for modest growth after years of stagnation.European markets fared better, with gains of 0.5% for Germany’s DAX and 1.2% for France’s CAC40. In Paris, the rally was driven by LVMH (+3.1%), Pernod Ricard (+3.5%), Schneider Electric (+2.2%) and Saint-Gobain (+3.2%). The Bel20 lagged, down 0.3%, dragged lower by UCB (-1.5%), Argenx (-2.5%) and especially Sofina (-5.4%). The holding may have to accept a lower valuation for a major stake in a group of private schools.

In Asia, Tokyo slipped 1.4%, while Chinese markets opened mixed: Hong Kong slightly lower, Shanghai a touch higher. Today, Estée Lauder and Deceuninck report results. The latter posted a 9% revenue drop in the first half, with operating profit down 16%, largely due to weakness in Turkey. In the US, the Fed minutes will be published later today.

Weak half-year, but guidance intact

Like in Q1, EVS disappointed due to delays in order execution. Revenue fell 6.4% year-on-year in H1, but CEO Serge Van Herck noted the shortfall had already been made up by July 8—just eight days after the books closed. EVS is investing heavily in US expansion, hiring extensively, which pushed costs up 10%. Combined with lower revenue, the EBIT margin shrank from 23.9% to 16.1%. But by July 8, that drop was largely reversed, according to Van Herck. The company is handling larger projects and adapted its US supply chain to offset import duties. Van Herck reaffirmed ambitious full-year guidance for both revenue and profit. Growth ambitions are paying off: US sales rose 7.2% and Asia surged 37%, though Europe lagged. EVS also acquired US firm Telemetrics, a specialist in robotic cameras. The current forecasts exclude its contribution. Today at 10 a.m., EVS will host a conference call link here. We expect a negative share price reaction, but no broader loss of investor confidence given EVS’s stellar track record under Van Herck.

MIGA – Make Intel Great Again

Intel jumped 7% yesterday on news that SoftBank is taking a 2% stake via a two billion dollar capital increase. Once a PC powerhouse, Intel has missed the AI-chip boom and lost ground in its core markets. The deal looks like a bet that the US will regain relevance in chip manufacturing. Unlike Nvidia and others, Intel still owns its own fabs. The US government is reportedly preparing a ten billion dollar investment in Intel’s capital, though Treasury Secretary Scott Bessent stressed Washington “will not force companies to buy from Intel.” Still, that’s exactly what you’d expect from “Trump II.” At Spaarvarkens, we’re cautious: when governments take big equity stakes, it rarely ends well. SoftBank, with its string of money-losing bets, is hardly a reassuring reference investor either.

Did you know…

Not only have European gas prices been falling for some time, but in the US, natural gas has also dropped to its lowest level in nine months—joining crude oil, which is down to just 62.5 dollars per barrel.

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