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Q3 Was Rough for the Tech Sector
The Technology Select Sector SPDR Fund [XLK], which tracks the S&P 500’s IT sector, declined 0.96% in Q3, while the broader S&P 500 Index gained 5.25%. IT was one of only two sectors to post losses, the other being energy. Super Micro Computer [SMCI], CrowdStrike [CRWD] and Intel [INTC] spearheaded the decline, with Super Micro dropping 50.88%, following short-seller Hindenburg Research’s allegations of “accounting manipulation”.
Huang: Blackwell Demand is “Insane”
In an interview with CNBC, Nvidia [NVDA] CEO Jensen Huang confirmed that demand for the company’s latest GPU, Blackwell, is robust. “Blackwell is in full production”, Huang said, adding that demand is “insane”. The GPUs are already being shipped to data centers and industrial clients for artificial intelligence (AI) applications, with consumer availability slated for 2025.
Red-Hot Competition in AI
Microsoft [MSFT]-backed OpenAI has completed its latest fundraising round at a $150bn valuation, the highest ever in Silicon Valley. The start-up asked investors not to fund AI rivals such as Anthropic and Elon Musk’s xAI, the Financial Times reported. Meanwhile, Character.ai is shifting focus toward improving its consumer products after the departure of its founders to Alphabet’s [GOOGL] Google in a $2.7bn deal. Dominic Perella, the interim CEO, said the company has largely stepped back from competing against giants like OpenAI, Amazon [AMZN] and Google.
Pharma Stock Pops on Jefferies Note
Novavax [NVAX] shares surged 15% on Wednesday after Jefferies issued a bullish note following a meeting with the company’s management, according to Seeking Alpha. Jefferies highlighted Novavax’s ramping up of US Covid-19 vaccine sales, which are expected to meet revenue guidance for the 2024/25 season, with most sales projected in Q4. Additionally, the firm noted Novavax’s shift toward an R&D model, with its Phase 3 flu/Covid-19 combo vaccine potentially leading to a major partnership in 2025.
Tesla Misses Targets, Still Bests BYD
Tesla [TSLA] missed market expectations for quarterly vehicle deliveries, reporting 462,890 units for Q3, up 6.4% year-over-year. Analysts had anticipated 463,000 deliveries, causing Tesla shares to drop more than 6%. Despite the miss, Tesla remains the top electric vehicle (EV) maker globally. Meanwhile, China’s BYD [BYDDF] delivered 443,426 EVs in Q3, a 2.7% increase, but saw a significant 75.6% rise in plug-in hybrid sales after introducing new hybrid technology in May.
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