Shares of Alibaba surged 14% in Hong Kong and climbed 4% in pre-market trading in the US, following the company’s announcement that it would invest “aggressively” in artificial intelligence (AI) over the next three years.
The Chinese ecommerce titan reported impressive financial results for the quarter ending December 31, with net income reaching 48.945bn yuan (£5.31bn/$6.72bn). This figure not only exceeded LSEG estimates of 40.6bn yuan but also marked a more than threefold increase from the 14.4bn yuan reported in the same period last year.
Revenue for the quarter stood at 280.1bn yuan, surpassing analysts’ expectations of 279.34bn yuan. Nomura analysts projected that the outlook for Alibaba’s ecommerce business will remain robust in the first half of 2025, driven by sustained trade-in subsidies.
Speaking on a call with analysts, CEO Eddie Wu highlighted the company’s strategic direction, stating that Alibaba would allocate more resources toward cloud and AI infrastructure in the next three years than it had in the past decade. However, Wu did not provide specific details on the investment size.
Barclays analysts noted that Alibaba has made “significant strides” in advancing its AI cloud business, particularly after launching its Qwen 2.5-Max flagship AI foundation model. The company has seen a substantial increase in demand for AI inference, which now accounts for up to 70% of its new demand.
“Great opportunities, however, often require significant investment,” Barclays said in a note. The analysts also emphasized that the upcoming three-year period is expected to be the most concentrated phase of investment in AI and cloud infrastructure in Alibaba’s history. Their estimate suggests that the company’s planned investment could exceed the nearly 270bn yuan spent over the last decade.
A high-level Japanese group, including former prime minister Yoshihide Suga, has outlined plans for Elon Musk’s Tesla to invest in struggling carmaker Nissan (7201.T), following the breakdown of Nissan's merger talks with rival Honda (7267.T).
According to sources quoted by the Financial Times, the group is exploring the possibility of Tesla taking a strategic stake in Nissan, with hopes that the electric vehicle giant might show interest in Nissan’s US production facilities. The group, which also includes former Tesla board member Hiro Mizuno, believes that such an investment could benefit both companies.
Nissan had been in discussions for a potential $58bn merger with Honda, but those talks ultimately fell apart. For Tesla, investing in Nissan could help boost its domestic production capabilities, particularly as president Donald Trump has threatened sweeping tariffs, including those targeting foreign-made vehicles.
Musk immediately appeared to reject the idea but Nissan’s Tokyo-listed share price still closed at 458.80, its highest since early January during short-lived merger talks with the larger Japanese rival Honda.
Shares of electric vehicle maker Rivian were down in pre-market trading after a 2.3% decline in the previous session, as the company issued a surprising forecast for a drop in electric vehicle deliveries this year.
For the fourth quarter, Rivian reported revenue of $1.73bn, exceeding the consensus estimate of $1.39bn. The company also posted an adjusted loss of $0.46 per share, a significant improvement over the anticipated loss of $0.65 per share.
It also reported a gross profit of $170m in the fourth quarter, driven by improvements in variable costs, revenue per delivered unit, and fixed costs. "This quarter we achieved positive gross profit and removed $31,000 in automotive cost of goods sold per vehicle delivered in Q4 2024 relative to Q4 2023," said CEO RJ Scaringe in a statement.
Scaringe also noted Rivian’s focus on cost efficiency is crucial for the launch of its mass-market R2 vehicle. "The R2 bill of materials is approximately 95% sourced and is expected to be approximately half that of the improved R1 bill of materials," he added, signalling Rivian’s ongoing efforts to optimise production costs.
Despite these positive results, Rivian’s delivery forecast for the year fell short of Wall Street expectations. The EV maker revised its annual delivery guidance to between 46,000 and 51,000 vehicles, below the 55,520 units predicted by analysts. This represents a slight decrease from last year, when the company delivered 51,579 units.
Rivian attributed its cautious delivery guidance to ongoing policy uncertainty, particularly the potential impact of the Trump administration. "I think they're appropriately being just cautious because it's unclear and they have no control over what's going to happen politically here," said Vitaly Golomb, managing partner at Mavka Capital, a Rivian investor.
Shares in Novo Nordisk rose by 3% in early European trading, fuelled by renewed interest from hedge fund managers.
The Danish pharmaceutical giant, known for its diabetes drug Ozempic recently reported that sales in its North American operations grew by 30% in Danish kroner in 2024, while international operations saw a 17% increase.
Looking ahead, Novo Nordisk is expected to report earnings of $0.96 per share for the current quarter, reflecting a 15.7% increase compared to the same period last year. For the full fiscal year, the consensus earnings estimate is $3.84 per share, representing a year-over-year growth of 17.1%. However, this estimate has been slightly revised down by 0.5% in the past month.
For the next fiscal year, analysts expect earnings to rise to $4.66 per share, a 21.3% increase compared to the anticipated earnings for the current year. This estimate has been revised upwards by 2.8% over the past 30 days, according to Zachs Equity Research.
Shares in Standard Chartered rose over 4% after the UK bank reported its full-year results and unveiled a $1.5bn share buyback plan.
For the fourth quarter, pre-tax profit fell 30% to $800m (£631m), below analysts’ expectations of $983m for the period. However, the bank’s underlying pre-tax profits, adjusted for restructuring and additional costs, came in at $1bn, in line with analyst consensus.
On a more positive note, Standard Chartered’s annual profits grew by 18%, reaching $6bn, up from $5bn in 2023. Along with the strong earnings, the bank announced a $1.5bn share buyback and proposed a final dividend of 28 cents per share, bringing total shareholder distributions to $4.9bn. The bank outlined plans to return $8bn to shareholders over time.
Russ Mould, investment director at AJ Bell, noted that while the profit miss typically wouldn't be well-received, investors appeared to focus on the larger dividend, significant buyback, and improvements in underlying performance.
“You wouldn’t normally expect a profit miss to get a positive reception but investors have been prepared to look past this at Standard Chartered and concentrate instead on a big increase in the dividend, a bumper buyback and a meaningful improvement in underlying performance,” Mould said. “Standard Chartered is a very different animal from most of its UK-listing banking peers, operating exclusively in much less mature markets in Africa and Asia.”
In a further shift, Standard Chartered revealed plans to significantly increase its chief executive’s pay, with the potential for Bill Winters to earn up to £13.1m under a new pay structure. The overhaul follows the UK’s removal of a long-standing cap on bonuses. Winters’ base salary would be reduced in exchange for a potentially larger bonus. Chief financial officer Diego De Giorgi could earn up to £7.7m if all targets are met under the new system, which will take effect in 2025.
Additionally, Standard Chartered announced a 7% boost to its 2024 bonuses for all employees, bringing the total to $1.7bn.
