Tech

The CNBC Investing Club’s “Morning Meeting” discussed market pressures on Big Tech due to CoreWeave’s weak outlook, raising concerns about AI investment sustainability and debt levels. Soft labor market data also contributed to downward pressure. Linde shares rose after a UBS upgrade citing future earnings growth. Nvidia declined following SoftBank’s stake sale to fund OpenAI, reinforcing debt concerns around AI data centers despite the Club’s long-term view. The rapid-fire segment covered CoreWeave, Paramount Skydance, Amgen, Dutch Bros, and Coterra Energy.

CoreWeave (CRWV) shares plummeted 13% after CEO Mike Intrator cited data center delays impacting its full-year projections. While Intrator portrayed the issue as isolated, CNBC’s Jim Cramer suggested broader problems, potentially tied to Core Scientific (CORZ), whose shares also fell 7%. CoreWeave revised its 2025 revenue forecast downwards despite a strong third-quarter revenue growth of 134%. The market reacted to the ambiguity surrounding the delays’ extent and their potential impact on CoreWeave’s ability to fulfill major AI infrastructure contracts with companies like Meta and OpenAI.

US equities rose amid optimism for a government shutdown resolution. The Nasdaq saw its biggest gain since May, driven by AI stocks. Bitcoin surged past $105,000. SoftBank reduced its chip sector exposure, focusing on OpenAI. Paramount Skydance announced cost cuts and layoffs. Air travel faced disruptions from the shutdown, and Warren Buffett plans to accelerate charitable giving, preparing Greg Abel for succession at Berkshire Hathaway.

Oura, the smart ring maker, projects sales near $2 billion next year, doubling its 2024 revenue. This surge is driven by women’s health features, international expansion, and AI integration. The company has sold over 5.5 million rings since 2015 and is focused on preventative health, incorporating glucose monitoring and researching blood pressure. Oura leverages AI to provide personalized health insights and has launched Oura Advisor, an AI-powered health chatbot. While an IPO is speculated, no immediate plans have been announced.

This earnings season, tech giants are increasing capital expenditure for AI-driven growth, but smaller players like DoorDash, Duolingo, and Roblox face investor skepticism after announcing similar spending increases. DoorDash’s investments in autonomous delivery and acquisitions, Duolingo’s focus on user growth with AI, and Roblox’s platform safety measures all raise concerns about near-term profitability. While companies argue these are essential for long-term growth, analysts question if returns will justify the investments, contrasting with the confidence afforded to larger firms like Amazon and Alphabet.

SoftBank Group divested its entire $5.83 billion stake in Nvidia, selling 32.1 million shares in October. This move aims to bolster SoftBank’s AI investments, including its significant backing of OpenAI. While Nvidia shares saw a slight dip, analysts suggest the sale is driven by SoftBank’s need to rebalance its portfolio and fund ventures like the $500 billion Stargate AI data center project. SoftBank’s Vision Fund reported a $19 billion gain, contributing to doubled profits in the fiscal second quarter, reflecting its aggressive expansion in the AI sector.

AI stocks rebounded Monday, led by Nvidia, Broadcom, and Microsoft, as investors focused on long-term growth despite valuation concerns. Sentiment shifted towards future earnings potential. The market anticipates a potential end to the U.S. government shutdown, further boosting optimism. However, CoreWeave’s mixed earnings highlight profitability challenges in AI infrastructure. Putin ordered accelerating rare earth metal production in Russia, which has the world’s fifth-largest reserves.

Apple removed gay dating apps Blued and Finka from its Chinese iOS App Store following directives from China’s Cyberspace Administration (CAC). Apple cited compliance with local laws, stating the apps were already unavailable elsewhere. A lighter version of Blued remains. This follows the 2022 removal of Grindr and stricter app regulations in China, including mandatory registration and licensing. The CAC also requested the removal of WhatsApp and Threads in April 2024. This action reflects increased scrutiny of LGBTQ content and the challenges multinational corporations face in navigating diverse regulatory landscapes.

SoftBank Group reported a significant $19 billion gain on its Vision Fund for Q2, exceeding expectations and driven by strategic investments. Profit reached 2.502 trillion yen, surpassing last year’s 1.18 trillion yen. Despite market anxieties, SoftBank is doubling down on AI, including a reported $30 billion investment in OpenAI, and remains committed to Artificial Super Intelligence (ASI), though facing potential regulatory and ethical concerns. The company’s stock, while volatile, is up over 140% YTD, reflecting confidence in its tech investment arm.

Sony Group reported a strong Q2 operating profit exceeding expectations, driven by music and imaging businesses, with a surprising drag from its animated movie, ‘KPop Demon Hunters.’ Operating profit rose 10% YoY, and revenue increased 5%. A share buyback of up to 100 billion yen was announced. The full-year outlook was revised upwards, projecting an 8% increase in operating profit. Despite robust sales in gaming, profitability slightly decreased. The picture business saw a profit contraction due to licensing the streaming rights of a highly successful film to Netflix.