Here are five things you need to know this morning
Stunning sales forecast fuels Intel stock: Intel Corp. shares are on track to hit their highest level ever after the chipmaker delivered a blockbuster sales forecast that shattered Wall Street expectations. Revenue will be US$13.8 billion to $14.8 billion in the June quarter, the company said Thursday in a statement. Analysts estimated $13 billion on average, according to data compiled by Bloomberg. Intel shares soared as much as 31 per cent in premarket trading on Friday, setting up the stock to surpass its last peak about 26 years ago. It had gained 81 per cent this year heading into the report, closing at $66.78. The upbeat outlook suggests that Chief Executive Officer Lip-Bu Tan is making progress on a comeback plan that aims to position the chipmaker to benefit from the build out of artificial intelligence computing. After lining up major investments in Intel last year — helping to strengthen the company’s balance sheet — he’s now delivering on a promise to improve operations.
SAP report beats estimates in AI push: SAP SE reported revenue growth from its cloud services that beat analysts’ estimates after Europe’s biggest software company began integrating artificial intelligence agents into the service. Cloud revenue increased to €5.96 billion (US$7 billion) in the first quarter, Walldorf, Germany-based SAP said Thursday in a statement. That compared with an average analyst estimate of €5.9 billion, according to data compiled by Bloomberg. The current cloud backlog, a measure of deals growth coming in over the next 12 months, was 25 per cent at constant currencies, SAP said. That was in line with analysts’ estimates. In the company’s January financial report, SAP stock slid after the metric came in at 25 per cent, a level that Chief Executive Officer Christian Klein had previously said would be a “disappointment.” SAP maintained its annual forecast for cloud revenue of €25.8 billion to €26.2 billion. Shares in SAP rose as much as 7.3 per cent in Frankfurt on Friday morning, the most in a year. The shares are down 28 per cent so far this year.
Canadian AI hopes to offer government alternative to U.S. and Chinese sources: Artificial intelligence start-up Cohere will acquire German AI firm Aleph Alpha to offer governments and firms “sovereign” alternatives to huge U.S. and Chinese tech firms, officials said Friday. The dominance of American and Chinese giants in the AI race has raised fears in Europe and other parts of the world about the data security, especially in sensitive areas. “What is being created here is a globally competitive and vertically integrated provider that meets data sovereignty and the highest security standards,” said Germany’s digital minister, Karsten Wildberger. “Germany and Canada fully support this merger politically,” he told a Berlin joint press conference. Cohere CEO Aidan Gomez said the joint company would be built on “shared Canadian-German values where privacy, security and responsible innovation are paramount”. The deal price was not publicly disclosed, but the Financial Times newspaper estimated the total value at US$20 billion, citing sources with knowledge of the terms. Cohere has managed to become “one of the very few non-U.S., non-Chinese AI frontier firms at a global scale”, said Canadian AI Minister Evan Solomon.
More power coming to Northern Ontario: Hydro One will develop and construct the Red Lake transmission line in northwest Ontario, the company said on Friday. The proposed project consists of a new double-circuit 230-kilovolt transmission line that will run from Dryden Transformer Station (TS) north to Ear Falls TS, including associated station facilities and will continue on to connect to Red Lake Switching Station. It is expected to be in service by the early 2030s. The Red Lake Transmission Line is expected to add about 400 megawatts of electricity in northwest Ontario, nearly quadrupling existing capacity. It is also expected to strengthen regional reliability and reinforce the grid for newly connected northern remote communities and the broader region, a statement said. Proximate First Nations can invest in a 50 per cent equity stake in the transmission line component of the project. Hydro One shares closed up $1.23 to $58.11 on Thursday on the Toronto Stock Exchange.
Bruised but built to last - 12 stocks a top investor is sticking with: When a top stock takes a hit, how do you know whether to hold on or move on? BNN Bloomberg contributor Jon Erlichman spoke with portfolio manager Thomas Martin about 12 large-cap names that have been bruised but, in his view, are still built to last.
