The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0936 ET - Bitcoin is now down 1.1% to $82,457, tumbling after being up around $84,000 earlier this morning. A hotter-than-expected September CPI pushed the probability of an October Fed hike to 50% based on the CME FedWatch tool. The CPI news is hitting cryptocurrencies and other assets considered riskier. "The pass-through of higher energy costs into other 'core' items may be occurring more rapidly than previously thought," says Stephen Coltman of 21shares in a note. Ethereum falls 1.9% to $2,463, XRP is down 1.2% to $1.35, and solana slides 2% to $104.92. (kirk.maltais@wsj.com)
0751 ET - Enerflex is accelerating its pivot into high-growth data center infrastructure, leveraging two major behind-the-meter natural gas power awards. RBC's Keith Mackey says, "Enerflex continues to demonstrate strong execution in BTM power generation, with its backlog now exceeding 1.75GW." The analyst notes that the projects have capital-efficient deal structures where clients supply the primary generator engines, while Enerflex handles modular design and fabrication. Mackey estimates that the 1.75GW backlog maps to about $1.9 billion in prospective revenue and $366 million in gross margins. With this, he expects that the earnings stream should "comfortably exceed the $100 million incremental facility capital investment Enerflex has announced." (adriano.marchese@wsj.com)
0446 ET - Gulf telecommunications operators are expected to maintain capital spending at around 20% to 25% of revenue as they expand 5G networks, data centers and subsea cable infrastructure, S&P Global Ratings says. Companies are likely to focus on expanding existing networks and developing digital services despite uncertainty surrounding the regional conflict, according to the ratings firm. Growing demand for data sovereignty, including requirements to store and process information domestically, could also support investment in local digital infrastructure. S&P says these developments may create additional revenue opportunities for telecom operators as governments pursue national digital strategies. (farhan.rafid@wsj.com)
0436 ET - Investors are focusing on the "AI dilemma" despite chip-equipment maker ASML reporting strong results, Tickmill Group's Patrick Munnelly says in a note. ASML upgraded guidance, but warned that supply may not fully meet demand over the next two years. Munnelly thinks ASML's message captures the current dilemma: while demand is strong and supporting upgrades, supply bottlenecks, valuation pressure and concentration risk leave the sector vulnerable to disappointment. The AI trade is no longer just about revenue growth, he says. "Investors are increasingly focused on whether the supply chain can meet demand without triggering margin pressure, overinvestment or financing strains," he adds. (sherry.qin@wsj.com)
0357 ET - Samsung Electronics and SK Hynix face growing market expectations for more aggressive shareholder returns, as concerns about intensifying competition from Chinese rival CXMT could put further pressure on their shares in the near term, Douglas Kim of Douglas Research Advisory says. Investors are looking to the companies' 3Q earnings conference calls for greater clarity on their shareholder-return plans and business outlook, he writes on Smartkarma. The market expects Samsung to return 60 trillion won to 80 trillion won to shareholders through share buybacks or cancellations, on top of 30 trillion won in dividends already announced for this year, Kim says. He expects SK Hynix's shareholder returns to total 82 trillion won this year, as the company nears completion of its previously announced 40 trillion won share buyback or cancellation plan. (kwanwoo.jun@wsj.com)
0253 ET - ASML Holding reported a very strong gross margin for the third quarter, J.P. Morgan analysts write in a research note. The Dutch supplier of semiconductor-making equipment posted a gross margin of 57.5%, above Visible Alpha consensus of nearly 56% and company guidance between 55% and 57%. Analysts say the margin was driven by revenue that ASML generates from maintaining and upgrading machines that clients have already bought. For the current quarter, ASML expects a gross margin of around 57%, which analysts say is 60 basis points above consensus of 56.4%. (mauro.orru@wsj.com)
0239 ET - ASML Holding's plans to boost production of its semiconductor-making machines and remarks that some customers are expressing interest in orders for 2029 and 2030 show that demand visibility continues to improve, Citi analysts write in a note to clients. They say the debate on the Dutch stock is increasingly shifting toward the scale of expansion in 2028 and beyond and the potential boost to margins from higher prices and adoption of its higher-end machines. Finance chief Roger Dassen said ASML had now completed conversations with key customers on pricing, with effects becoming visible partly as of 2027. (mauro.orru@wsj.com)
2252 ET - Kospi's recent selloff reflects a broader reassessment of how much future AI growth is already reflected in equity valuations, says James Ooi, chief market strategist at Tiger Brokers, in a research note. The immediate catalyst was CXMT's progress on more efficient DRAM architecture, which renewed concerns over Chinese competition. However, the selloff of flash-memory maker Sandisk and hard-drive maker Seagate, despite the absence of any direct competitive threat from CXMT's technology, shows that investors are questioning the durability of the memory sector's exceptional profit margins, Ooi says. While supply shortages have driven memory prices higher, these favorable conditions may not last. "The next phase of AI investing could become more selective," he adds. (sherry.qin@wsj.com)
2233 ET - Data#3's strong start to its FY 2027 already looks priced in to analysts at Morgan Stanley. While Data#3's trading update points to solid demand for the Australia-listed tech-services provider, the MS analysts think that expectations of further earnings upside is already implied by the stock's current valuation multiple of 33 times FY 2027 earnings. They think that underlying momentum is solid and tell clients that it could be positive that the company has given guidance so early in its fiscal year. However, risk reward looks balanced to them. MS lifts its target price 18% to 13.00 Australian dollars and stays equal-weight on the stock. Shares are up 2.7% at A$13.835. (stuart.condie@wsj.com)
2223 ET - Life360's bulls at Morgan Stanley don't read much into third-party data suggesting strong September-quarter usage of its location app. MS analysts acknowledge that data from analytics provider Sensor Tower look positive for dual-listed Life360's monthly active user growth, but point out that it has provided only limited value in the past for forecasts. The analysts tell clients in a note that they view any signals as directional only, and interpret the read-through with caution. MS has an unchanged overweight rating and US$65.20 target price on the U.S. stock, which closed down 2.9% at US$42.55. Life360's ASX-listed stock is up 0.3% at A$20.37. (stuart.condie@wsj.com)
1913 ET [Dow Jones]--Data#3's better-than-expected sales trading update isn't enough to turn Morgans analyst Nick Harris bullish on the Australian tech-services provider. With an unchanged hold rating, Harris tells clients in a note the stock is more than fairly valued in the absence of any outlook upgrade. Gross sales and earnings have been tracking ahead of management's December-half expectations, but Harris points out this is down to some one-off transactions, favorable year-earlier comparisons, and strong trading conditions. The June half is expected to be more sober, he adds. Morgans raises its target price 21% to 13.40 Australian dollars. Shares are up 2.7% at A$13.83. (stuart.condie@wsj.com)
1343 ET - Apple's latest tech rollout is a shift from its focus on mobile products to technology that is anchored to customers' homes. Its biggest launch is the HomeView, an iPad-like product with a stand and new AI and voice features. The HomeView connects to a suite of other new home products, including smart thermostats, a video doorbell and door lock, and indoor and outdoor cameras, Apple says. The accessories are designed to work together and users can control every product with Siri voice commands. Users can also set up the devices to recognize key moments throughout the day, like someone leaving for work, and automatically adjust temperature, door locks and cameras, according to Apple.
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