Broadcom Thrives with AI Growth
Broadcom is currently experiencing a significant surge following the recent announcement of a 28% increase in fiscal Q4 profit. The company’s revenue growth has been accelerating for four consecutive quarters, with a 51% rise to $14 billion. A key driver of this impressive growth is the company’s AI revenue, which has more than tripled from fiscal 2023, reaching $12.2 billion. CEO Hock Tan is highlighting that Broadcom is developing AI chips in collaboration with three major cloud customers. He estimates that the total addressable market for AI chips and AI networking equipment could be between $60 billion and $90 billion by 2027. This optimism underscores the company’s strategic focus on the burgeoning AI sector. For the fiscal first quarter ending in January, analysts are expecting Broadcom to report a profit of $1.51 per share, a 37% year-over-year increase, with revenue projected to rise by 22% to $14.6 billion. These results are due to be released after the market close on Thursday. Broadcom’s success is particularly notable amid the broader tech sell-off, demonstrating the company’s resilience and ability to capitalize on the growing demand for AI technology. As Broadcom continues to innovate and expand its AI capabilities, it remains well-positioned for future growth in this rapidly evolving market.
Adidas Eyes U.S. Market Gains
Adidas is placing increased focus on the U.S. market as it seeks to strengthen its position against its key competitor, Nike. With growing uncertainty around consumer demand in China, many global brands are turning their attention to American shoppers for growth opportunities in 2025. Under the leadership of CEO Bjorn Gulden, has made significant strides since severing ties with rapper Ye and discontinuing the Yeezy sneaker line in 2022. The company has experienced a remarkable 160% rise in stock value since Gulden’s appointment was announced. As Adidas prepares to release its full-year financial results in early March, investors are eager to learn more about its strategies to capture U.S. market share and compete against emerging sportswear brands like On Running and Hoka. Recent data indicates that while Nike’s global sportswear market share fell to 14.1% last year from 15.2% in 2023, Adidas expanded its share from 8.2% to 8.9%. Other brands, including New Balance and Hoka, also saw gains. Despite this growth, Adidas faces challenges in North America, where its sales declined by 7% in the third quarter due to the loss of its Yeezy line. However, with overall sales increasing by 19% in the final quarter and 12% throughout 2024, Adidas appears poised for continued momentum. To solidify its presence in the U.S., Adidas has launched initiatives targeting American consumers, including collaborations with Los Angeles-based label Sporty & Rich and musician Pharrell Williams. The brand has also bolstered its roster of athlete endorsements, such as WNBA player Satou Sabally and college football star Travis Hunter, while promoting its Terrace franchise of sneakers, including the Samba and Gazelle, which have shown strong sales during the holiday season. North America remains a critical growth area for Adidas. By capitalizing on Nike’s current challenges and leveraging its recent successes in the U.S. direct-to-consumer market, Adidas could secure long-term growth and strengthen its position in the competitive global sportswear industry.!
Dell Technologies Projects Strong Annual Profit
Dell Technologies has forecasted a robust annual profit, surpassing expectations due to strategic cost reductions and increased demand for its AI-optimized servers. These servers, equipped with advanced Nvidia chips, meet the high computational demands of training large language models such as those used in chatbots like ChatGPT. This has spurred interest from various companies, enhancing Dell’s competitive position in the AI server market alongside rivals like Super Micro Computer. According to Chief Operating Officer Jeff Clarke, deals with xAI and other entities have increased the AI server backlog to approximately $9 billion. Dell is navigating a competitive landscape with other PC manufacturers, including HP Inc., especially given the potential impact of a new U.S. trade tariff on China, which could elevate tech product prices. The company is analyzing these tariff orders to determine their effects on customer pricing, which remain unaffected at this point. For fiscal 2026, Dell predicts an adjusted profit of $9.30 per share, slightly above analyst estimates. The company’s projected annual revenue midpoint of $103 billion aligns with market expectations. Additionally, Dell announced an 18% increase in its annual cash dividend and expanded its share repurchase authorization by $10 billion.
Deutsche Telekom Urges Europe to Lead in AI Development
Tim Hoettges, the CEO of Deutsche Telekom, has called on Germany’s incoming government and Europe to take a leading role in the development of artificial intelligence (AI) and data centers to compete with the U.S. and Asia. Recently, Chinese startup DeepSeek caused a significant sell-off in global equities markets by introducing an affordable AI reasoning model that surpassed many Western competitors. DeepSeek is now rushing to release a new AI model. Hoettges predicts a 30% increase in demand for data centers in Europe, even with advancements in programs like DeepSeek that utilize less computing power. Deutsche Telekom is investing in data centers and is currently constructing four in Europe, aiming for up to one gigawatt of infrastructure. “We need data centers in Europe and in Germany,” Hoettges said during a press call following the release of Deutsche Telekom’s annual results. “Europe is in competition with America and Asia, and we can’t rely on external sources for our needs.” “More computing power is essential for the future growth of our economy and for Europe’s sovereignty in the digital age. We will make our contribution,” he added. Earlier this February, European politicians met with the tech sector in Paris to discuss AI development. At the AI summit, European Commission President Ursula von der Leyen announced a plan to mobilize €200 billion ($210 billion) in private and public funding to expand Europe’s AI infrastructure, committing €50 billion from the European Union. This initiative contrasts with the up to $500 billion in U.S. private sector investments in AI infrastructure announced by President Donald Trump last month.
Stellantis Reports Decline in 2024 Revenue and Profits
Stellantis updates its financial forecasts, anticipating a return to profitable growth and positive cash generation in 2025. The company expects positive revenue growth, a single-digit positive operating income margin, and positive industrial cash flow, reflecting both the initial phase of commercial recovery and high sector uncertainties. In 2025, Stellantis will launch ten new models. Stellantis confirms the arrival of a new CEO by the first half of 2025. During the 90 days since the leadership transition began, the interim executive committee has taken swift and decisive actions to improve the company’s performance and profitability. Stellantis closed 2024 with net revenues of €156.9 billion, marking a 17% decline compared to 2023. Consolidated deliveries decreased by 12% due to temporary product range gaps and completed inventory reduction actions. The net profit stood at €5.5 billion, a sharp 70% drop. The adjusted operating profit was €8.6 billion, with an AOI margin of 5.5%. Industrial cash flow was negative at €6 billion. Stellantis plans to distribute a dividend of €0.68 per common share. Maserati, the luxury brand of Stellantis, reported a 55.5% decline in revenues to €1.04 billion in 2024. Global deliveries fell by 57.5% to 11,300 vehicles. The adjusted operating profit was negative at €260 million, with an AOI margin of -25%. Maserati is adopting new strategic measures to strengthen its future and plans to launch new products and commercial initiatives in 2025.
Bitcoin Drops Below $90,000 by Industry Challenges
The shift in the digital asset market contrasts sharply with the post-election rally in November. Since Trump’s inauguration in January, Bitcoin has declined by nearly 20%. This drop is attributed to Trump’s aggressive trade policies and ongoing inflation concerns, which have shaken investor confidence. Adrian Przelozny, CEO of crypto exchange Independent Reserve, linked the fall in Bitcoin prices to broader economic uncertainty driven by Trump’s tariff announcements. Data from CoinGlass indicates that over $1.34 billion of bullish crypto positions were liquidated within 24 hours. Industry-Specific Issues The digital asset market’s sentiment has also been negatively impacted by recent industry-specific setbacks. These include a significant hack targeting the Bybit exchange and a memecoin controversy involving Argentina’s President Javier Milei. These events have contributed to the underperformance of digital coins compared to other risk assets, such as technology stocks. The Bybit hack has heightened concerns about the security of digital-asset platforms. Hackers, reportedly linked to North Korea, stole approximately $1.5 billion worth of Ether and began laundering the funds. This incident highlights the increasing sophistication of North Korean hackers. Additionally, memecoins launched by Trump and his wife Melania just before the inauguration have performed poorly, undermining confidence in pro-crypto policies. According to CoinGecko data, the Trump token has fallen by more than 80% since its initial peak. Caroline Mauron, co-founder of Orbit Markets, noted that the Bybit hack and questionable memecoin launches have revived negative memories for crypto market participants. The digital asset market faces ongoing challenges, with trade policies and industry-specific issues contributing to the recent downturn.
Prosus Announces Acquisition of Just Eat Takeaway for €4.1 Billion
Prosus, a tech investment firm, has revealed plans to acquire Just Eat Takeaway, known for its Thuisbezorgd service, for €4.1 billion. The iconic orange delivery boxes will remain unchanged, and Just Eat’s headquarters will stay in Amsterdam, maintaining brand continuity. Originally from South Africa, Prosus aims to expand its presence in Europe through this acquisition. The company sees growth potential in various sectors, including food delivery, groceries, fintech, and other services. Prosus has offered €20.30 per share for Just Eat, a significant 63 percent premium over the company’s closing share price on Friday. The deal has received unanimous support and recommendation from Just Eat Takeaway’s board of directors and supervisory board. Prosus also holds stakes in German delivery companies Flink and Delivery Hero. This is not the first time Prosus has attempted such an acquisition, with a similar effort made five years ago.
Apple’s $500 Billion Investment Plan in Response to Increased Tariffs
Apple Inc. has announced plans to invest over $500 billion (approximately €478 billion) in the United States over the next four years. The announcement followed a conversation between Apple CEO Tim Cook and U.S. President Donald Trump. Earlier this month, President Trump raised tariffs on products imported from China by 10 percent, posing challenges for Apple, which manufactures many of its devices in China. According to Bloomberg, this increase in tariffs is a significant factor driving Apple’s substantial investment in the U.S. The funding will support the construction of a new manufacturing facility in Houston. This new facility, set to open next year, will produce servers that are currently manufactured outside the U.S. The Houston factory will span more than 23,000 square meters and create thousands of new jobs, Apple said. Additionally, the company plans to expand its data centers in states such as North Carolina, Iowa, Arizona, and Nevada. By shifting a portion of its production to the U.S., Apple aims to mitigate the impact of the tariffs and contribute to domestic economic growth.
Super Micro Computer Stock Soars Amid Anticipation of 10-K Filing
The driving force behind this substantial increase is the investor anticipation surrounding Supermicro’s upcoming 10-K filing. The company’s annual report, which has been delayed due to accounting controversies, is expected to be submitted by February 25. This report is eagerly awaited as it promises to bring much-needed clarity to the company’s financial standing and performance. The stock’s outlook has been clouded by uncertainty since July, when Hindenburg Research released a short-seller report alleging numerous instances of accounting malpractice within Supermicro. This report led to the resignation of Ernst & Young, the company’s public results auditor, in October. Ernst & Young cited an inability to rely on management’s statements and concerns over the independence of the company’s auditor committee as reasons for their resignation. In the wake of these challenges, Supermicro has brought BDO on board as its new auditor. The upcoming 10-K filing, conducted with BDO, is expected to be a significant catalyst for the company’s stock. Investors are hopeful that the report will not contain major downward restatements of previously reported results. If this is the case, it could lead to a substantial boost in the stock’s valuation. Supermicro has projected robust sales growth, anticipating sales of $40 billion in its next fiscal year, despite lowering its sales guidance for the current year to between $23.5 billion and $25 billion. Investors have been piling into Supermicro stock with the expectation that the company’s annual report will arrive without significant issues, thereby clearing up lingering accounting concerns. The coming week will be critical in shaping the sentiment surrounding Supermicro. The company’s performance, coupled with the clarity provided by the 10-K report, will determine whether Supermicro gains more valuation credit for its sales and earnings or if investors continue to approach the stock with caution.
Berkshire Hathaway’s Record Earnings
Berkshire Hathaway, led by CEO Warren Buffett, reported record operating earnings of $47.4 billion in 2024. Despite more than half of its 189 operating businesses experiencing a decline in earnings, the company’s overall performance exceeded expectations. The surge in earnings was largely driven by improved yields on Treasury Bills and an increased investment in these highly-liquid short-term securities. At the close of 2024, Berkshire’s cash reserves and cash-equivalent holdings, including Treasury Bills, stood at $334.2 billion, nearly double the $167.6 billion recorded at the end of 2023. The value of the company’s equity portfolio was $272 billion, a significant decrease from the $354 billion valuation at the end of 2023. This decline was primarily due to major sales of Berkshire’s stake in Apple during the first three quarters of 2024, reducing the value of its holdings in the tech giant by approximately $100 billion. Buffett reassured shareholders that despite the large cash position, the majority of their investments remain in equities, predominantly American, with many having significant international operations. He emphasized that this investment strategy would remain unchanged. Berkshire’s total revenues for 2024 amounted to $371.4 billion, up from $364.5 billion the previous year. However, its investment gains fell to $41.6 billion from $58.9 billion in 2023, reflecting the inherent volatility of these figures. In his annual letter to shareholders, Buffett addressed the mistakes made over the years, both in capital allocation and managerial assessments. He highlighted the importance of transparency and honesty in reporting to shareholders. Buffett also acknowledged the upcoming transition of leadership to Greg Abel, assuring that the company’s core values and investment philosophy would continue under Abel’s stewardship. Buffett took pride in Berkshire’s significant tax contributions, noting the $26.8 billion paid to the IRS in 2024, the highest amount ever paid by a single company to the U.S. government. He lauded the long-term benefits of reinvesting profits, which have allowed Berkshire to grow and impact all corners of the country. The letter also mentioned changes to the annual shareholders’ meeting schedule, with the Q&A session starting and ending earlier. Buffett, along with Vice Chairmen Greg Abel and Ajit Jain, will address shareholders in a slightly adjusted format. Berkshire Hathaway’s strong financial performance, strategic adjustments, and commitment to its core values underscore its resilience and continued growth under Buffett’s leadership.