News Companion

Nvidia Becomes World’s Most Valuable Company

Nvidia Becomes World's Most Valuable Company

Nvidia’s share price surged over 3% on Tuesday, propelling the chip maker to the top spot as the most valuable company globally, surpassing tech giant Microsoft.

Impressive Stock Performance

  • Nvidia shares jumped by 3.5% to $135.58, driving its market capitalization up by over $110 billion to $3.335 trillion. This achievement comes shortly after surpassing Apple to claim the second spot in market value growth.
  • The company’s market value soared from $1 trillion to $2 trillion in just nine months by February, and in a little over three months, it skyrocketed to $3 trillion in June.

Market Comparison

  • Microsoft’s share price dipped by 0.45%, reducing its market value to $3.317 trillion. Apple also experienced a decline of over 1%, leaving its value at $3.286 trillion.
  • Nvidia’s share price has nearly tripled this year, a stark contrast to Microsoft’s modest 19% increase in shares.

Strategic Move

  • Last week, Nvidia split its stock 10-for-one, making its highly valued stock more accessible to individual investors.

Driving Force: AI Technology

The surge in Nvidia shares and market value is fueled by optimism surrounding emerging Artificial Intelligence (AI) technology.

Wall Street Dominance

  • Nvidia’s stock price surge has propelled the S&P 500 and Nasdaq to record highs.
  • The chipmaker has become the most traded company on Wall Street, with daily turnover averaging $50 billion, far surpassing Apple, Microsoft, and Tesla.
  • Nvidia now represents about 16% of all trading in S&P 500 companies.

Superior AI Processors

A high demand for Nvidia’s AI processors, known for their superiority over competitors’ offerings, has resulted in tight supply. Many investors see Nvidia as the prime beneficiary of the rapid advancement in AI technology.

Toyota Founder’s Grandson Akio Toyoda Secures Shareholders’ Approval to Remain Chairman

Toyota Founder’s

Toyota shareholders voted on Tuesday to support all the company’s proposals, including retaining Akio Toyoda, the founder’s grandson, as chairman of the board.

Details of the vote counts were not immediately available, but the company confirmed that the majority supported its positions.

The annual meeting, held at the company headquarters in Toyota City, Japan, drew attention because Toyota and other major domestic manufacturers have been involved in a scandal over fraudulent vehicle certification tests.

The cheating did not lead to recalls or safety issues. A shareholder proposal for Toyota to issue an annual report on its climate-related lobbying activities was rejected.

Toyota shareholders demand vote against chairman Toyoda as automaker embroiled in testing scandal

Untitled design 2024 06 16T133341.317 Toyota shareholders demand vote against chairman Toyoda as automaker embroiled in testing scandal

In Tokyo, Toyota’s chairman Akio Toyoda is gearing up to address some unhappy shareholders this week. Two major proxy groups are calling for a vote against keeping the founder’s grandson on its board.

This vote, scheduled for the annual shareholders meeting on June 18, follows Toyota’s recent apology for fraudulent certification tests on vehicles. This issue has been a significant embarrassment for a company known for its commitment to high-quality standards. While there haven’t been any safety concerns reported, Toyota did suspend production of three models produced by its group companies in Japan.

Over the past five years, Toyota’s stock prices soared, reaching nearly 3,800 yen ($24). However, recent troubles have caused a sharp decline, with shares now trading at above 3,000 yen ($20). This represents a loss of about 3 trillion Japanese yen ($18 billion) in market value.

Institutional Shareholder Services, which advises investors and is mostly owned by the German capital market company Deutsche Borse Group, emphasized in its proxy report that Toyoda should be held accountable. Despite Toyoda’s promises for change, which did not include reshuffling the board, ISS expressed doubts that Toyota’s plans would be sufficient to prevent future problems.

Another proxy advisory company, Glass Lewis & Co., also recommended voting against the reappointment of Toyoda and another top executive, Shigeru Hayakawa. They argued that Toyoda failed to ensure appropriate internal controls and governance measures were implemented within the group companies.

Despite these challenges, Toyoda is unlikely to be removed from his position at the upcoming shareholders’ meeting. Japanese institutional shareholders, including banks and financial institutions, are unlikely to challenge the automaker due to longstanding loyalties and cross-shareholdings among affiliates.

Despite the recent scandal, Toyota’s profits doubled in the fiscal year ending in March, exceeding its own projections. Analysts believe that the company’s fundamentals remain strong, with the recent issues expected to have only a minor impact on operations.

In his recent apology, Toyoda referenced a previous recall scandal in the U.S. during his tenure as chief executive, reassuring both himself and the public about the company’s ability to overcome challenges.

Hyundai Motor’s India Unit Plans IPO That Would Rival Record

Hyundai Motor’s India Unit Plans IPO

The carmaker plans to offer 17.5%, equivalent to 142.2 million shares, of Hyundai Motor India Ltd., as outlined in a preliminary red herring prospectus. No new shares will be issued by the unit in the IPO, and all proceeds will be directed to the parent company.

Reportedly aiming to raise approximately $2.5 billion through the IPO, with a potential listing by year-end, according to sources familiar with the matter as reported by Bloomberg News. This could mark one of the largest IPOs in India’s history, comparable to the 2022 offering of Life Insurance Corp. of India, valued at 206 billion rupees ($2.5 billion).

Sources, preferring anonymity, suggest Hyundai is eyeing a valuation of up to $25 billion. Hyundai Motor India ranks as the country’s second-largest automaker by sales, with nearly 80% of its car sales revenue coming from domestic markets, according to the draft prospectus.

As per the prospectus, anchor investors may receive up to 42.66 million shares. Qualified Institutional Buyers, including anchor investors, could acquire up to half of the shares offered. Retail buyers will have access to at least 35% of the offering, while the remaining portion will be allocated to non-institutional investors.

Based on the filing, Hyundai Motor India recorded revenue of 521.58 billion rupees for the nine months ending December. Its revenue for the fiscal year ending March 2023 amounted to 603.1 billion rupees.

Kotak Mahindra Bank, Citigroup Inc., HSBC Holdings Plc, JP Morgan Chase & Co, and Morgan Stanley are reportedly the advisers for Hyundai’s share sale, according to the draft prospectus.

G7 Leaders Approve $50 Billion Loan to Aid Ukraine in Conflict with Russia

Russia 1 G7 Leaders Approve $50 Billion Loan to Aid Ukraine in Conflict with Russia

The leaders of the Group of Seven (G7) wealthy democracies have agreed to offer a $50 billion loan to assist Ukraine in its conflict with Russia. This agreement, reached at a summit in Italy’s Apulia region, utilizes profits from frozen Russian central bank assets as security.

The loan, dubbed the “Extraordinary Revenue Acceleration (ERA) Loans for Ukraine,” is intended to aid Ukraine’s military, budget, and reconstruction efforts. It is anticipated that the funds will be accessible by the year’s end.

Ursula von der Leyen, President of the European Commission, stressed that the financial responsibility would rest on Russia rather than European taxpayers.

A senior official from the United States mentioned that the loan would involve several lenders sharing the risk, though each country’s contribution is yet to be determined. The next steps involve gaining approval from EU member states and finalizing contracts among lenders, Ukraine, and intermediaries.

Ukrainian President Volodymyr Zelenskyy hailed the agreement as a significant stride in securing sustainable support for Ukraine. President Joe Biden hailed the decision as a “historic agreement.”

Most of the frozen Russian assets, approximately $260 billion, are located within the European Union, with additional contributions expected from Canada, Japan, and other European nations. The World Bank may also assist in distributing the US portion of the loan.

World Leaders Summit in Switzerland: Urging Russia to Halt War in Ukraine

World Leaders Summit in Switzerland

World leaders convened in Switzerland for a summit on Saturday with the goal of urging Russia to halt its war in Ukraine. However, the absence of key allies of Moscow, notably China, has diluted the potential impact of the summit.

Absence of Key Allies

  • Although many allies of Ukraine are participating, China opted to stay away after Russia was excluded from the proceedings, citing the event as futile and expressing no interest in attending.
  • The absence of China diminishes hopes of isolating Moscow, particularly as recent military setbacks have put Ukraine at a disadvantage. Additionally, attention has been diverted from Ukraine due to the ongoing conflict between Israel and Hamas in Gaza.

Agenda and Discussions

  • The discussions are anticipated to address broader concerns stemming from the conflict, such as food and nuclear security, and freedom of navigation.
  • Sources indicate that a preliminary version of the summit’s declaration identifies Russia as the aggressor in the conflict.

Statements and Conditions

  • Richard Gowan, the U.N. Director at the International Crisis Group, remarked that while the summit may highlight the constraints of Ukrainian diplomacy, it also provides an opportunity for Ukraine to underscore its commitment to the principles of the U.N. Charter.
  • Russian President Vladimir Putin stated that Russia would only cease its military operations in Ukraine if Kyiv abandoned its NATO aspirations and relinquished control of four disputed provinces, demands promptly rejected by Ukraine.

Diplomatic Stances

  • Putin’s conditions reflect Moscow’s growing confidence in its military advantage in the conflict. Russia portrays its actions in Ukraine as part of a broader confrontation with the West, which it alleges seeks to weaken Russia. Kyiv and Western nations refute this narrative, accusing Russia of unlawful aggression.

Global Dynamics and Divisions

  • Switzerland, at the request of Ukrainian President Volodymyr Zelenskiy, aims to facilitate a path toward a future peace process involving Russia. However, divisions among global powers regarding the conflict have overshadowed the summit. Zelenskiy has accused Beijing of assisting Moscow in undermining the gathering, an accusation refuted by China’s foreign ministry.

Participation and Challenges

  • Approximately 90 countries and organizations have committed to the two-day summit, set to occur at the Buergenstock, a mountain resort in central Switzerland. Despite efforts to promote unity, the event faces challenges, including an alternative plan proposed by China.
  • Notable attendees include U.S. Vice President Kamala Harris and leaders from France, Germany, Italy, Britain, Canada, and Japan. Countries with friendlier ties to Russia, such as India, Turkey, and Hungary, are also expected to participate.

Outlook and Support

  • Russia, which deployed tens of thousands of troops to Ukraine in February 2022, dismisses the summit as futile without its involvement.
  • Supporters of Ukraine are organizing events in the nearby city of Lucerne to highlight the humanitarian toll of the conflict, including a demonstration demanding the release of prisoners and children taken to Russia.
  • European officials acknowledge that without support from Moscow’s key allies, the summit’s impact may be limited. Daniel Woker, a former Swiss ambassador, questions the potential outcomes of the summit, suggesting it may serve as another incremental step in garnering international solidarity with Ukraine as a victim of Russian aggression.

Is Elon Musk worth his £44bn Tesla pay package?

Elon Musk

Elon Musk might, once again, have things go his way.

His Tesla pay deal, potentially worth up to $56 billion depending on the company’s share price, has received backing from shareholders. This sum is equivalent to 75% of the entire spending for schools in England in 2024-25 (£60 billion) and roughly a quarter of the budget for the NHS (£192 billion).

Many of his supporters believe Musk deserves every penny he earns.

His ventures include Tesla, SpaceX, X (formerly Twitter), Starlink, Neuralink, and X.ai, his latest AI endeavor.

Some argue that Tesla’s success in opening up the US electric vehicle market, SpaceX’s achievement in launching the world’s most powerful rocket, and advancements such as Neuralink, where a volunteer can now control a computer with their thoughts, wouldn’t have been possible without him.

Tesla’s growth was a key factor in Musk’s pay deal, designed to ensure his continued commitment to the company. The deal, structured around specific milestones like Tesla’s market value, sales, and profit, offered a substantial reward if achieved.

Musk’s high profile and hands-on approach add significant value to his companies. Despite occasional setbacks like Tesla’s struggles in 2022, Musk’s influence remains undeniable, garnering extensive media attention and political connections.

While some legal hurdles remain regarding his pay package, Musk’s indispensability is questioned by some, noting that no individual remains indispensable forever, especially when overseeing multiple companies simultaneously.

Despite Musk’s track record of success, there have been notable failures, including Tesla’s early struggles with profitability and controversies such as the tweet that led to an investigation and Musk stepping down as CEO. However, the US market tends to tolerate and even celebrate risk-taking, a sentiment the UK could adopt according to some experts.

Despite setbacks, Musk remains unyielding and bold, recently sending a cake to Delaware in defiance of attempts to block his Tesla pay deal.

Adobe surges as AI optimism fuels annual revenue forecast

Adobe surges as AI optimism fuels annual revenue forecast

Adobe’s shares jumped 14% before the market opened on Friday. This happened after the company, known for Photoshop, increased its annual revenue forecast, thanks to more customers using its AI-powered editing tools.

This new forecast eased investor concerns that Adobe, a key player in photo and video editing tools, might lose customers to AI startups like OpenAI, which creates image-generating software like Dall-E.

The forecast also indicated that Adobe’s AI initiatives, including its Firefly image-generating software introduced last year, are successful. Senior executive David Wadhwani mentioned that current users are upgrading to more expensive plans to access Firefly.

RBC Capital analysts noted that the wider availability of Firefly has led to increased engagement from both new and existing users.

If these premarket gains continue, Adobe’s market value will rise by about $30 billion. Currently, Adobe’s shares have dropped about 23% this year, while the S&P 500 index has gained nearly 14%.

On Friday, at least six brokerage firms increased their price targets for Adobe’s stock.

On Thursday, Adobe raised the midpoint of its fiscal 2024 revenue forecast to $21.45 billion, up from the previous midpoint of $21.40 billion.

Adobe reported $3.91 billion in revenue from its digital media business, which accounted for approximately 74% of its total second-quarter revenue of $5.31 billion. Analysts had anticipated total sales of $5.29 billion.

Microsoft to invest $7.16 billion in new data centres in northeastern Spain

Microsoft to invest $7.16 billion in new data centres in northeastern Spain

Microsoft’s Expansion Plans in Aragon, Spain

Microsoft is set to invest a significant amount in building new data centers in Aragon, Spain, solidifying the region’s position as a key cloud computing hub in Europe.

Investment Details:

  • Amount: 6.69 billion euros ($7.16 billion)
  • Timeline: Over the next 10 years

The regional government of Aragon confirmed that Microsoft has applied for a construction permit near Zaragoza, as reported by El Heraldo.

Competition with Amazon AWS:

  • Microsoft’s move aligns with Amazon’s cloud computing unit AWS, which plans to invest 15.7 billion euros over the next decade in data centers in Aragon.

Sustainability Focus:

  • Amazon emphasizes the use of renewable energy to power its data centers.

Significance of Aragon:

  • Aragon boasts significant wind power capacity, contributing to its appeal as a location for data centers.
  • Zaragoza, Spain’s fifth-largest city, serves as a vital logistics and transportation hub, strategically positioned between Madrid and Barcelona.

($1 = 0.9340 euros)

Fox Sports to Broadcast IndyCar Races from 2025 Onwards

Fox Sports to Broadcast IndyCar Races from 2025 Onwards

On Thursday, Fox Sports announced that it would start broadcasting IndyCar races from 2025 onwards. This means Fox Sports will now cover two of the most significant races globally:

  • The Indianapolis 500
  • NASCAR’s Daytona 500

Coverage Details

  • Fox Sports is already broadcasting the first half of the NASCAR schedule.
  • The specifics of the deal between IndyCar and Fox Sports were not disclosed.
  • Fox assured that all races would be aired nationally, along with the qualifying rounds for the Indy 500.

Previous Coverage

  • Previously, NBC held the rights to IndyCar since 2009, with a recent extension reportedly valued at $20 million per season.
  • However, NBC Sports had moved some coverage to its streaming platform, Peacock, and many races were only available on cable.

Fox Sports’ Plan

  • Fox Sports confirmed that all IndyCar races would be broadcast on Fox and the Fox Sports app.
  • Fox Deportes will provide exclusive Spanish-language coverage.
  • Qualifying sessions and practices will be aired on cable channels FS1 or FS2.

Record-Breaking Deal

  • This deal sets a record with 19 IndyCar events aired on broadcast television.
  • IndyCar will be the sole premier motorsports series in the country with exclusive major network coverage for all its races.
  • Unlike NASCAR, whose 2025 schedule spans across various networks.

Reactions

  • IndyCar CEO Mark Miles expressed excitement about the partnership, emphasizing the exposure and growth opportunities it presents.
  • Fox Sports CEO Eric Shanks welcomed the addition of the Indianapolis 500 to their lineup, highlighting their commitment to premier sporting events.

2025 Schedule Highlights

  • The 2025 IndyCar schedule remains largely unchanged.
  • The All-Star race is becoming a points race.
  • Milwaukee will not host a doubleheader.
  • The season will kick off on March 2 in St. Petersburg, Florida, and conclude on August 31 in Nashville.