The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
1015 GMT - IBM is in a good position to be a major beneficiary of the artificial-intelligence build-out, J.P. Morgan analysts write. "We are encouraged by the recovery in the quarter," the analysts say. Data-management strength will persist, while corporate clients should continue to shift to IBM's software management service as secular tailwinds boost the company's software division, they say. Software revenue growth was better than feared, rebounding to grow 9% in the quarter, the analysts say. Delayed deals from earlier in the year came to fruition in the last quarter, bolstering topline strength, they say. Shares fall 5.3% premarket amid broader pressure on AI stocks. (josephmichael.stonor@wsj.com)
1006 GMT - Sea Cloud as a new business segment could weigh on group-level profitability, says Citi Research analyst Alicia Yap in a note. The launch came as an unexpected development for Yap, though the move closely resembles the path taken by Alibaba Cloud and other hyperscalers, which initially built the infrastructure for internal workloads before commercializing their space capacity. However, building a competitive artificial-intelligence enterprise cloud platform requires significant capex, Yap notes. Even though Sea had $7.8 billion in net cash as of June, scaling aggressively could mean that existing cash reserves and organic cash flow from core businesses might face funding constraints without external financing or disciplined capital allocation, Yap adds. (kimberley.kao@wsj.com)
0950 GMT - Meta Platforms' capital-expenditure plans failed to soothe investors concerned the AI boom is slowing, Quilter Cheviot's Ben Barringer writes. The social-media company left the high end of its capital-expenditure guide for the year unchanged at $140 billion, while raising the low end by $5 billion to $135 billion. The company didn't provide detail on its 2027 spending plans but said it will continue "investing aggressively." The lack of a significant raise means "there's not much there for the AI CapEx trade," Barringer says, adding that some investors might have thought there would be a another big increase. Meta shares fall 1.75% amid a broader AI selloff, as Nasdaq futures drop 1.8%. (josephmichael.stonor@wsj.com)
0936 GMT - Nestle gave a helpful update for the third quarter that will likely build credibility, according to Jefferies analyst David Hayes. He says the company delivered stronger real internal growth--a measure of volume of products sold--than analysts anticipated. The consumer goods giant on Thursday reported sales above company-compiled estimates. Shares are up 1.13%. (aimee.look@wsj.com)
0928 GMT - Nokia reported third-quarter results that were clearly stronger than expected on a comparable basis, but the reported figures fell short due to larger one-off items, Inderes analysts Atte Riikola and Tommi Saarinen write. The Finnish company's revenue slightly exceeded consensus forecasts, but the real surprise came from profitability due to better-than-expected performances in both network and mobile infrastructure, they say. Orders from AI and cloud customers remained strong after a record second quarter, and revenue from these customers more than doubled on year. Full-year guidance remained unchanged, and the company's outlook for optical and IP networks next year is more positive than Inderes expected. "The revenue beat and the stronger-than-expected growth outlook for 2027 put upward pressure on our earnings forecasts." Shares fall 3.2%. (dominic.chopping@wsj.com)
0922 GMT - Lam Research's short-term guidance failed to beat market expectations, but the company's outlook remains very strong, Jefferies's Blayne Curtis writes. Demand for computer memory and AI will continue into next year, helping the supplier of chip-making equipment expand its profitability, Curtis says. The group's on-quarter widening of its gross margin is especially impressive given a slowdown in its sales to China, the analyst says. Lam Research shares drop 7.6% premarket amid a broader AI selloff. (josephmichael.stonor@wsj.com)
0912 GMT - Meta Platforms' third-quarter earnings show strong revenue growth in its core business as user growth remains robust, Jefferies's Brent Thill says. On-year revenue growth was 26% in the third quarter, 2% ahead of market expectations, Thill says. Daily active users of Meta products rose by 3% compared to last year, reaching 3.64 billion people, while the social-media company also did a better job of monetizing advertising, the analyst says. Investor will turn to whether the company's establishment of a new nonvoting share class presages equity fundraising in 2027, the analyst adds. Meta shares slip 2% premarket amid a broader AI selloff. (josephmichael.stonor@wsj.com)
0912 GMT - Nestle's respectable and predictable results are showing it can do what investors want it to do, analysts at RBC Capital Markets say in a note. The Swiss packaged-food group is exploiting its diversified portfolio, giving outperformers room to offset underperformers. "Nestle seems to be rediscovering its status as a default defensive investment," RBC's James Edwardes Jones says in the note. Shares are up 1.22%. (aimee.look@wsj.com)
0905 GMT - Roche Holding's underlying sales trends look disappointing and the Swiss drugmaker's third-quarter update should raise questions about its growth trajectory next year, Jefferies analysts say in a research note. The company's eye drug Vabysmo, cancer therapy Kadcyla and asthma and allergy medicine Xolair are all facing pressure, Jefferies says. It is hard to see more than low-single-digit growth in 2027 given current trends, even with new breast-cancer drug giredestrant launching, the analysts say. For 2026, the company is guiding for sales growth excluding currency movements in the mid-single-digit range. Shares fall 0.7%. (adria.calatayud@wsj.com)
0904 GMT - South Korea's Kospi could stage a rebound in 2027 as strong corporate profitability supports higher valuations, says Hanwha Investment & Securities strategist Ha Jang-kwon. He sets a 2027 target of 8500 for the benchmark index and expects it to trade within a range of 6000-9300, following what he describes as "a rerating formula." Memory-chip stocks' valuations may be higher, supported by year-end long-term supply deals and negotiations over 2027 high-bandwidth memory prices, he says. Ha prefers semiconductor and IT hardware stocks through 1Q 2027, before broadening into banks, steel, transport and utilities as pressure from rising interest rates eases and the won strengthens. The benchmark index closed 3.52% lower at 5533.77 on Thursday. (jihye.lee@wsj.com)
0853 GMT - Roche Holding's reported third-quarter sales ahead of consensus expectations, but the outperformance was partly driven by a one-off gain in Japan, J.P. Morgan analysts say in a research note. The Swiss drugmaker's sales were boosted by the timing of the implementation of a new software system in Japan, which accounted for around half of its 2% beat to consensus estimates, according to JPM. Roche reiterated its guidance, which suggests there might be limited changes in consensus estimates, the analysts say. Shares fall 0.7%. (adria.calatayud@wsj.com)
0847 GMT - Sainsbury's results were soft, but expectations had likely already come down after fellow U.K. grocer Tesco's results, Barclays' Matthew Clements says in a note. Thursday's update from Sainsbury's echo the weaker-than expected performance from Tesco's top line around two weeks ago, he adds. Sainsbury's also narrowed its expectations for the year. The grocer ended the first half with good results, so it's unclear fully why profit growth should slow in the second half, Clements says. Shares fall 3.6%.
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