AI: in Search of the Next Big Thing

AI: the Next Big Thing

In the past three months, investors have thrown over $27bn at US artificial intelligence (AI) start-ups, according to data from PitchBook. The Financial Times reported that AI “godmother” Fei-Fei Li has built a start-up called World Labs, valued at more than $1bn. Elsewhere, Anthropic is to collaborate with Menlo Ventures on a new $100m fund for AI start-ups; its chatbot, Claude, will recommend deals. Samsung [SSNLF] announced Thursday it is to buy British AI start-up Oxford Semantic Technologies.

Chip Politics: Winners and Losers

Taiwan Semiconductor Manufacturing Co [TSM] reported a 36% increase in net profit for Q2, driven by the ongoing AI boom. Nevertheless, a chip selloff continued on Thursday; Samsung dropped as much as 3.3% and Tokyo Electron [8035:T] by 11%. However, US-based firms such as Intel [INTC] and Globalfoundries [GFS] bucked the trend, closing up 8.2% and 14% Wednesday; Bloomberg reported that investors are increasingly turning from mega-caps to “underdog” chip stocks, such as Intel or AMD [AMD].

Nokia Still Stuck in 5G Doldrums

The share price of the Finnish giant [NOKIA:HE] fell 9% Thursday morning in Helsinki, after it reported Q2 sales were the lowest they’ve been since 2015. Weak investment in network upgrades remains a headwind for both Nokia and regional rival Ericsson [ERIC], Bloomberg reported. Shares in ABB Ltd. [ABB:ST] also fell, after the Swedish-Swiss robotics firm reported a decline in orders; weaker demand for its automation products undercut gains in its power grid arm.

Pharma Stocks Rise on J&J Earnings

Johnson & Johnson [JNJ] posted better-than-expected Q2 2024 earnings on Wednesday. “We have strong momentum with key end-market products and continue to advance our pipeline with significant clinical and regulatory milestones being attained,” said CEO Joe Wolk on the earnings call. With J&J widely considered a bellwether for the broader sector, other pharma stocks including Bristol-Myers Squibb [BMY] and AbbVie [ABBV] rose on the news. Meanwhile, Italy’s Angelini is weighing a merger with one of three US biotechs.

EV Sales Grow in Europe

Italian electric vehicle (EV) demand more than doubled in June following government subsidies. Second-hand EVs are now as affordable as petrol cars in the UK, according to data from Auto Trader reported by the Financial Times. Used EV sales were up 63% in H1. Elsewhere, Volvo [VLVCY] reported better-than-expected Q2 results Thursday but lowered its full-year retail sales forecast over EV tariffs; Renault [RNLSY], meanwhile, said its H1 sales volume rose 1.9% on strong demand for hybrids.