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.
0911 GMT - Shares of European semiconductor companies are in decline after a selloff of stocks exposed to artificial intelligence in Asia. South Korea's SK Hynix closed 5% lower, while Samsung Electronics shed 4.2%. Taiwan Semiconductor Manufacturing Co. closed 1.5% lower. In Europe, shares of Dutch semiconductor-equipment maker ASML Holding and smaller rival ASM International are down 2.1% and 1.2%, respectively. French semiconductor-materials maker Soitec is down 2.5%. German chip maker Infineon Technologies stock loses 2.3%. STMicroelectronics shares are down 3%. Investors in AI stocks are awaiting the outcome of midterm elections in the U.S. and its implications for the build-out of data centers. (mauro.orru@wsj.com)
0829 GMT - Tencent will benefit from greater user stickiness once it launches its AI agent in WeChat, strengthening the ecosystem behind one of its core businesses, Morningstar analysts say in a note. The company also sees three potential paths to direct monetization: a cut of agent-facilitated transactions; higher ad revenue from better targeting, supported by richer user-intent signals gathered by the Xiaowei AI assistant; and a paid subscription tier for advanced AI features, they say. Morningstar's valuation doesn't require the current AI spending to earn its cost of capital, they add. The analysts also expect management to scale back AI spending if returns fail to meet targets. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0445 GMT - Xiaomi's smartphone revenue likely strengthened in 3Q, thanks to the pass-through of higher selling prices and resilient demand, supported by new model launches, Daiwa analyst John Choi says in a note. The brokerage now forecasts total revenue of 106 billion yuan for the quarter. However, smartphone shipments likely fell, reflecting strict volume control as management shifts the product mix toward higher-end models. Yet the growth in average selling prices is expected to have remained robust as Xiaomi continued to execute its premiumization strategy, Choi adds. Daiwa raises its target price on the stock to HK$35.00 from HK$30.00 and maintains a buy rating. Shares are last at HK$28.64. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0225 GMT - Xiaomi's car and AI business may have faced some sequential pressure in 3Q, according to Deutsche Bank's Bin Wang. DB estimates revenue from its smart EV, AI and other new initiatives segment to have declined 4% on quarter to 23.8 billion yuan, given flat vehicle deliveries in 3Q. On the cost side, Xiaomi has guided for 2026 corporate research and development expenses of 40 billion yuan, which includes a heavy 16 billion yuan allocation to the smart EV and AI segment. Auto research and development expenses may have dragged Xiaomi's 3Q adjusted net profit on a quarterly basis, Wang says in a research note. DB keeps a buy rating on the stock, with a target price of HK$48.00. Shares last traded at HK$28.74. (tracy.qu@wsj.com)
2207 GMT - Apple emphasized its privacy protections on new AI tools, as the company looks to differentiate itself from peers such as Meta and Google. Executives mentioned privacy at least a dozen times in Monday's earnings call, primarily while discussing Siri AI, its new AI-driven personal agent. Chief Executive John Ternus notes that the data Siri AI can access is protected, so not even Apple can access it. This is a contrast with some peers, who sell consumer data to third-parties and advertisers. "We just want to make sure that users are aware of what they're giving access to," Ternus says. "We want to make sure this is done in a way that protects security and privacy." (katherine.hamilton@wsj.com)
2202 GMT - Apple Chief Executive John Ternus sees the personal data on the iPhone as one of the company's biggest opportunities when it comes to AI. "So much of your personal data is on your iPhone, whether it's your contacts, your communications, health data, financial data, all of that," Ternus says to analysts on a call. Siri AI is going to be able to access that data, with permission, and act as a personal assistant and AI agent, Ternus says. "We think that is a core differentiator that we're excited about." (katherine.hamilton@wsj.com)
2159 GMT - Palantir Chief Technology Officer Shyam Sankar takes a shot at Anthropic ahead of the AI lab's initial public offering this month. On an earnings call, Sankar directs investors to a portion of Anthropic's IPO filing touting its work to improve AIG's underwriting processes using AI. "That entire workflow and the elegant application of AI software and humans runs in AIP and was implemented by Palantir and AIG," he says, referring to Palantir's Artificial Intelligence Platform. "We are the diffusion layer, not just of choice, but of necessity." Palantir is an outspoken critic of frontier AI labs and has positioned itself as an option for enterprises seeking more control over their AI stacks. (elias.schisgall@wsj.com)
2146 GMT - Palantir CEO Alex Karp uses his quarterly shareholder letter to warn of the dangers of AI agents being deployed in enterprises without his company's technology. Without proper context, grounding, and safeguards, "the LLM agent is a virtually unlimited liability, possessing a nearly unbounded destructive potential and a blast radius that tends towards infinity," he writes. "There is simply no means of effectively and reliably connecting the language models to large enterprises without the operating model and capabilities we have pioneered." Increasingly, Karp adds, business leaders in the U.S. are waking up to this realization. (elias.schisgall@wsj.com)
2141 GMT - Apple says higher memory costs are squeezing margins. The company expects operating expenses in the current fiscal first quarter to be $20.4 billion to $20.8 billion, which would be ahead of the $20.26 billion analysts are anticipating. The higher costs are mainly related to rising memory prices, as well as some expenses related to ramping Siri AI, Chief Financial Officer Kevan Parekh tells analysts on a call. During the fourth quarter, which just ended, higher memory costs put pressure on the gross margin for both the overall company and the products business. Both margins would have been narrower had it not been for tariff refunds, Parekh says. (katherine.hamilton@wsj.com)
2138 GMT - Palantir CEO Alex Karp says businesses are increasingly being distinguished by their control over their internal AI stack, something that has come to be known as "Sovereign AI." "The Sovereign AI movement is imposing the most dramatic dichotomy between haves and have nots that I have witnessed in 30 years of business," Karp says. "Every institution--government and commercial--is rapidly being forced, voluntarily or not, into one of these two categories." The company has consistently argued that businesses are better off using Palantir to build proprietary software using open-weight AI models than relying on a third-party AI provider such as Anthropic or OpenAI. (elias.schisgall@wsj.com)
2045 GMT - Apple beat Wall Street expectations on both its top and bottom line in the fiscal fourth quarter. The tech conglomerate got a boost from tariffs, which added about 1 percentage point to its 12% revenue growth and 5 cents a share to its earnings per share of $2.10. Both figures would have been ahead of analyst expectations, even without the boost from tariffs, however. Revenue was boosted by record-high sales in Apple's services business, as well as a strong showing for the iPhone. (katherine.hamilton@wsj.com)
1724 GMT - The top AI hyperscalers and neoclouds are expected to post much wider free cash losses next year, StoneX analysts project in a note, raising questions about capital availability to bridge the deficit. Looking at six top hyperscalers, plus neoclouds CoreWeave and Nebius, analysts estimate free cash losses across the group are expected to be more than $309 billion in 2027, compared with a loss of more than $112 billion this year. "The inability to fund this free cash flow deficit over the next few years represents the single greatest concern on Wall Street at the moment, and until investors feel more confident about funding the deficit (or willingness to fund it), chip companies with heavy exposure to the data center market may struggle to re-rate higher," the analysts say.
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