Global Markets Rise on AI Demand and Earnings

Asia-Pacific markets mostly rose on Wednesday, with Japan's Nikkei 225 and South Korea's Kospi gaining ground. SoftBank Group's shares plummeted after the company sold its entire stake in Nvidia for $5.83 billion. The Japanese conglomerate's decision to divest from the U.S. chipmaker was seen as a strategic move to capitalize on its investment in OpenAI. Other market movers included Billionbrains Garage Ventures, which surged 20% in its market debut, and Foxconn, whose third-quarter profit jumped 17% driven by growth in its AI server business. The U.S. markets closed mixed overnight, with the Dow Jones Industrial Average reaching a fresh closing record.

SoftBank has sold its entire stake in Nvidia for $5.83 billion, but not due to concerns over Nvidia's high valuations. Instead, the Japanese conglomerate plans to redirect the funds to its $22.5 billion investment in OpenAI. This move comes amid warnings from 'Big Short' investor Michael Burry, who expressed concerns that AI companies are 'understating depreciation' of AI chips, artificially boosting earnings. Meanwhile, AMD sees 35% annual growth driven by 'insatiable' demand for AI chips, and Luckin Coffee is looking to relist in the US.

Rightmove's stock price plummeted after announcing plans to increase investment in AI, sparking concerns among UK investors about the returns on such investments. The company's decision to prioritize AI development over short-term profit growth is seen as a cautionary tale for UK businesses looking to adopt AI. The article highlights the challenges faced by UK companies in implementing AI, including high upfront costs and a shortage of skilled personnel. While some companies, like Autotrader, are making progress in AI adoption, others are struggling to keep up.

European stocks opened higher on Wednesday, driven by hopes that the U.S. government shutdown will end soon after the Senate passed a spending bill. The pan-European Stoxx 600 Index rose 0.4%, with most major bourses and sectors in positive territory. The U.K.'s FTSE index was up 0.2%, while Germany's DAX and Italy's FTSE MIB also saw gains. Several major companies, including Infineon Technologies and Bayer, are set to release earnings on Wednesday. In other news, SoftBank Group shares fell after the company sold its entire stake in Nvidia for $5.83 billion.

Foxconn, the world's largest contract electronics maker and a key supplier to Nvidia and Apple, reported a 17% year-over-year increase in third-quarter profit, driven by surging demand for AI servers. The company expects continued growth in the second half of the year, led by AI and ICT products. Foxconn is expanding its partnerships with major companies like Nvidia, Stellantis, Uber, and Mitsubishi Electric to deepen its AI and automation push, including the development of 'Level 4' autonomous vehicles and AI data center solutions.

The stock market saw a mixed performance on Tuesday, with the Dow Jones Industrial Average rising over 550 points to a record high, while the Nasdaq Composite slipped. Investors sold off technology stocks, driving a rally in more risk-off parts of the market. Consumer stocks such as Walmart and McDonald's propped up the Dow, while health care stocks like Eli Lilly and Johnson & Johnson performed well. The ADP report showed private employers cut payrolls in October, adding to worries about labor market weakness. Nuclear power startup Oklo's shares fell after its third-quarter loss widened.

Foxconn Technology Group, the world's largest electronics contract manufacturer and a key supplier to Nvidia and Apple, reported a 17% increase in third-quarter profit, exceeding market forecasts. The company's net profit for the July-September period was T$57.67 billion (US$1.89 billion), surpassing the estimated T$50.4 billion. Foxconn's strong performance was driven by sustained demand for artificial intelligence servers. The company expects significant year-on-year revenue growth in the fourth quarter, with AI server revenue anticipated to rise quarter-on-quarter. Foxconn is also expanding its manufacturing capabilities, including building 'AI factories' using Nvidia's chips and software, and has diversified its production locations to include India, Mexico, and Texas.