Nvidia's upbeat forecast generates another selloff in shares
The stock lost in choppy trading, and other members of the group such as Microsoft and Amazon were lower after Nvidia's earnings failed to inspire the kind of gains that became a hallmark of the AI rally through 2023 and 2024. Investors were hoping its results would restart a rally that has sputtered following the "Magnificent Seven" stocks' peaks in late 2024.
Nvidia's report was eyed as a bellwether for chip spending on generative AI - and it indicated demand remains strong, though its margin outlook ebbed from previous quarters. Nvidia's "datapoints are very positive for the wider AI ecosystem," said Ivana Delevska, chief investment officer of Spear Invest, which holds Nvidia shares in an actively managed exchange-traded fund. Nvidia shares closed 8.48% down at $120.15. Microsoft ended 1.80% down at $392.53.
Starlink owner Musk wrongly accuses Verizon of faulty US aviation system
Billionaire presidential adviser Elon Musk falsely accused Verizon, a rival contractor of his SpaceX Starlink system, of putting U.S. air safety at risk through a communications system that is actually operated by L3Harris. Musk admitted that he made a mistake when he said Verizon operated the Federal Aviation Administration's communications system.
"Correction: the ancient system that is rapidly declining in capability was made (by) L3Harris. The new system that is not yet operational is from Verizon," Musk posted on social media. Verizon, which operates the largest U.S. wireless network, rejected Musk's initial accusation with a statement that it has only begun work on the system.
Big fines coming for companies with export violations, says ex- Commerce official
The U.S. Commerce Department is likely to impose hefty fines on some large companies in the coming months for offenses such as illegally shipping technology to customers in China, according to a top department official who left last month. Matthew Axelrod, as Commerce's assistant secretary for export enforcement during the Biden administration, pushed for tougher penalties against companies that violated export controls on China, Russia and Iran. Axelrod would not identify the companies under scrutiny.
But one open investigation involves chip equipment maker Applied Materials, which is being probed by both Commerce and the Justice Department over shipments to China's top chipmaker, Semiconductor Manufacturing International Co, as Reuters reported in 2023. Another probe involves Cadence Design Systems.
Warner Bros Discovery expects streaming profits to double, sets 150 million users goal
Warner Bros Discovery said it expects streaming profits to double this year and forecast at least 150 million subscribers for the business by 2026, setting a bold target as it benefits from the global rollout of Max and tight cost controls. The results are the first since the company decided in December to separate its cable TV businesses from streaming and studio operations, laying the groundwork for a potential sale or spinoff of its TV business.
The split will allow WBD to take advantage of "broader market opportunities" as they arise, CEO David Zaslav told analysts. WBD's total subscribers now stand at nearly 117 million, much lower than industry leader Netflix's 302 million and 124.6 million for Disney+. Overall, revenue came in at $10.03 billion, below estimates of $10.19 billion. The company lost 20 cents per share, while analysts expected a profit of 1 cent.
US House panel subpoenas tech giants over foreign communications
The U.S. House Judiciary Committee has subpoenaed eight major technology companies, including Alphabet, Meta, Apple and X Corp, seeking details about their communications with other countries over fears of foreign censorship, it said.
House Judiciary Committee Chairman Jim Jordan, a Republican, sent the subpoenas on Wednesday and also included Amazon, Microsoft, Rumble and TikTok, according to the statement. "The Committee must understand how and to what extent foreign governments have limited Americans' access to lawful speech in the United States," Jordan said in a statement announcing the subpoenas. A Microsoft spokesperson said the company is engaged with the committee and committed to working in good faith. Jordan pointed to laws in the United Kingdom and other countries in Europe, as well as a proposed law in Australia that could require U.S. tech platforms to remove content deemed harmful by foreign regulators.
Goldman drops diversity and inclusion section from annual filing
Goldman Sachs has dropped an entire section dedicated to "diversity and inclusion" from its annual filing released, as Wall Street firms dial back their diversity initiatives after President Donald Trump took charge. "We have made certain adjustments to reflect developments in the law in the U.S.," CEO David Solomon said in a statement. The bank's previously set five-year "aspirational hiring and representation goals" are set to expire this year, the report stated.
Corporate America has softened its stance on diversity, equity and inclusion in recent weeks after Trump issued an executive order last month directing government agency chiefs to dismantle DEI policies at federal agencies and in the private sector. "We strongly believe that merit and diversity are not mutually exclusive. Our people are a powerful example of that and that’s why we will continue to focus on the importance of attracting and retaining diverse, exceptional talent," Solomon said. Apple faces likely French antitrust fine for privacy tool, sources say Apple is facing a likely antitrust fine as the French regulator prepares to rule next month on the company's privacy control tool, two people with direct knowledge of the matter said.
Called App Tracking Transparency (ATT), the feature allows iPhone users to decide which apps can track user activity, helping companies like Meta Platforms' Facebook and online advertisers tailor ads to users and measure their impact. Digital advertising and mobile gaming companies including Facebook say it has made it more expensive and difficult for brands to advertise on Apple's platforms. The French regulator is expected to issue its decision next month ordering Apple to halt its anti-competitive practice and will likely impose a fine too, the people said, making it the first regulatory veto against the ATT. Separately, Apple has been sued by consumers who said its claim that three versions of Apple Watches are "carbon neutral" and environmentally friendly is false and misleading.
Amazon unveils quantum chip, aiming to shave years off development time
Amazon Web Services showed a quantum computing chip with new technology that it hopes will shave as much as five years off its effort to build a commercially useful quantum computer. The chip, named Ocelot, is a prototype that has only a tiny fraction of the computing power needed to create a useful machine. But like its tech rivals, AWS, which is Amazon.com's cloud computing unit, believes it has finally hit on a technology that can be scaled up into a working machine, though it has not yet set a date for when it will reach that point.
The standard industry thinking has been that a chip will need about a million physical qubits to yield a useful number of logical qubits. But AWS said it had built a prototype chip that uses only nine physical qubits to yield one working logical qubit, thanks to the use of what is known as a "cat" qubit.
Congress kills Biden era methane fee on oil, gas producers
The U.S. Senate voted on a resolution that would overturn the Biden administration's proposed fee on methane emissions, one of the previous Environmental Protection Agency's final measures to force big oil and gas producers to slash emissions of the powerful greenhouse gas. The Senate passed the resolution under Congressional Review Act process, which allows Congress to reverse new federal rules with a simple majority, effectively overturning the escalating charge on oil and gas producers set by the agency they have called a tax.
The methane fee was mandated by the 2022 Inflation Reduction Act, which directed the EPA to set a charge on methane emissions for facilities that emit more than 25,000 tons per year of carbon dioxide equivalent. Separately, the cancellation of a license for Chevron to operate in Venezuela could lead to the negotiation of a fresh agreement between the U.S. producer and state company PDVSA to export crude to destinations other than the United States, sources close to the talks said.
Novavax sees royalties, reduced expenses on COVID vaccines from Sanofi partnership
Novavax posted a narrower fourth- quarter loss and said it expects its licensing deal with French drugmaker Sanofi for COVID-19 vaccines to generate royalties, and reduce selling and administrative expenses. It is banking on revenue from its Sanofi deal and vaccines in development, including an experimental COVID-flu combination shot and for bird flu, which is in pre-clinical stage. Novavax said it was eligible to receive royalties in high teens to low twenties percent on Sanofi sales, up to $350 million in launch payments for the COVID-flu combination and up to $200 million for each new vaccine launch using its Matrix-M formulation.
The company reported quarterly sales of $49.8 million from COVID vaccines, its only product on the market, down 80.2% from the year earlier. Its net loss was $81 million for the quarter ended December 31, compared with a net loss of $178.3 million a year ago.
