Tech, Media & Telecom Roundup: Market Talk

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 - The medium- to long-term outlook for U.S. AI data centers likely involves builders offering more safeguards, local investments, and contractual commitments including electricity-bill protection, says Malik Ahmed Khan, senior equity analyst from Morningstar. Anthropic, with its focus on building AI for humanity and its high-profile spat with the DoW, may benefit from increased AI regulation under Democrats. The analyst doesn't expect any near-term impact on Anthropic's IPO, but says the dynamic warrants monitoring the next couple of years. (jiahui.huang@wsj.com; @ivy_jiahuihuang)

0905 GMT - BT Group's first-half results suggest its plans for cost cuts are intact as it completes the roll-out of fiber broadband, while dividend payments could rise, Berenberg analysts write. The telecommunication company's consumer earnings were better than expected, with overall revenue above expectations, the analysts note. The company maintains its fiscal 2027 and 2030 cash flow guidance, which implies cost cuts will continue as expected, Berenberg says. The company also makes positive comments that suggest a rise in dividend payouts is possible once its balance sheet position improves, the analysts note. BT's new pension terms allow substantial upside to its dividend after targets are met, the analysts add. Shares are up 5.4%. (michael.hennessey@wsj.com)

0428 GMT - Uncertainty over the AI buildout's speed, scale and economics keeps BlackRock Investment Institute neutral on U.S. equities. Midterm outcomes could influence decisions on permitting and construction in some jurisdictions, but the implications for AI development will vary. BII still believes in the transformative potential of AI, but questions whether capital spending can be justified by future revenues and returns and if current valuations reflect those uncertainties. Higher interest rates are increasingly differentiating companies by their ability to generate earnings and returns above the cost of capital. As the buildout becomes more debt-financed, leverage and funding costs are coming into sharper focus. BII continues to favor selective exposure to AI-related companies and listed infrastructure, where growing demand and scarcity in critical infrastructure can support attractive returns. (fabiana.negrinochoa@wsj.com)

0417 GMT - Hong Kong shares traded higher in the morning session, with the Hang Seng Index rising 3.1% and the Hang Seng Tech Index adding 4.8% at midday break. Tech stocks are leading the gains, with Alibaba shares adding 7.5% and Meituan rising 8.05%. The gain follows Wall Street's performance overnight, as investors digest U.S. midterm results. Hong Kong has been among the weaker-performing equity markets in Asia and globally so far this year, as it lacks a clear AI-related catalyst, but the market likely have reached a point for reversal, says Julia Wang of Nomura International Wealth Management. Decliners include CNOOC, which drops 2.9%, and China Petroleum & Chemical Corp, which is 0.5% lower. (tracy.qu@wsj.com)

0256 GMT - Democrat Gina Hinojosa's election as Texas governor has raised concerns over tighter data-center rules, given the state's large pipeline of planned projects, says James Ooi, Tiger Brokers' chief market strategist, in a note. Investors may be pricing in slower construction or fewer projects, Ooi says. AI accelerator and data-center infrastructure suppliers could face a longer wait for orders and revenue. By contrast, hyperscalers could see stronger cash flow as spending moderates, giving them room to resume buybacks or raise dividends. Smaller developers and operators may be more vulnerable, especially those heavily reliant on debt. Delays could pile up financing costs before projects generate revenue, Ooi adds. (venkat.pr@wsj.com)

0242 GMT - A selloff in South Korean semiconductor stocks in early Thursday trading triggers a temporary trading halt on the main bourse. The benchmark Kospi is recently down 3.8% at 5466.71, after its futures' losses of more than 5% triggered a five-minute halt aimed at easing volatility. Index heavyweight chipmakers Samsung Electronics and SK Hynix are last down 5.3% and 7.5%, respectively, after trimming their earlier losses. Investors' unease over AI spending persists after Democrats advocating for greater tech oversight gain control of both chambers of Congress in the U.S. midterm elections. Some analysts, however, see limited downside risks. The impact on supply contracts and AI stocks' earnings is likely to be limited, as data-center investment schedules are unlikely to face major delays, Kiwoom Securities analyst Han Ji-young says in a note. (kwanwoo.jun@wsj.com)

0051 GMT - SK Telecom's earnings could come under pressure partly from spending on AI data centers in coming years, Daiwa Capital's Thomas Y. Kwon and Joon Lee say. The analysts cut their 2027-2028 earnings-per-share forecasts for the top South Korean wireless carrier by 8%-9%, citing higher capital expenditure for AI data-center development as well as weaker-than-expected 3Q mobile-service revenue. They note that the company plans to begin opening new AI data centers in 2H 2029, and gradually scale up commercial operations to generate revenue, amid intensifying competition in South Korea's AI data-center market. Daiwa trims the stock's target price to 72,700 won from 77,100 won and keeps an underperform rating. Shares are 0.5% higher at 77,800 won. (kwanwoo.jun@wsj.com)

2137 GMT - Media company Sinclair said advertising for the mid-term elections in the U.S. pushed its political advertising revenue to $136 million in the third quarter, an increase of 55% versus the last mid-term elections in 2022. The company also said its full-year preliminary political advertising revenue stood at $455 million. That figure is above its prior political revenue record of $405 million in the presidential election year of 2024, and is also higher than the prior mid-term political revenue record of $333 million in 2022. Overall, the third quarter saw Sinclair's revenue rise 13%, to $893 million. (stephen.nakrosis@wsj.com)

1901 GMT - SpaceX's target for adding 10 gigawatts of data-center capacity next year looks far less achievable given the Democratic wave in Tuesday's midterms, particularly the election of Democrat Gina Hinojosa as Texas governor, Morgan Stanley analysts write in a note. They model 5.7 gigawatts of new capacity in 2027, with the company set to face headwinds from financing, chips, power, and local opposition. "After the results last night, we feel more convicted in our below consensus estimates" for data centers, they write. Still, SpaceX may not be in a worse position than peers, they say, and the company may be able to pivot to friendlier states. The results may also accelerate Elon Musk's push to put data centers in space, the analysts add. (elias.schisgall@wsj.com)

1829 GMT - State and local pension funds hold a total between $578.1 billion and $706.6 billion of investments in artificial intelligence-related companies across their portfolios, according to Equable Institute, a bipartisan nonprofit that supports public retirement systems. The total accounts for 9% to 11% of those pensions' $6.42 trillion in assets, Equable says. It adds that the 51 largest publicly traded AI-related companies account for 35.1% of all equity investments by state and local pensions. Still, such portfolio concentration calls for greater disclosure, according to Anthony Randazzo, Equable's executive director. "A negative event like an AI-bubble bursting could cause very meaningful losses that [pension] stakeholders should be aware of," he says. (luis.garcia@wsj.com; @lhvgarcia)

1801 GMT - The combination of a Democrat wave in Congress and SpaceX successfully catching both the ship and booster in its upcoming Starship test flight could accelerate Elon Musk's plans to build AI data centers in space, Morgan Stanley analysts say in a note. "If SpaceX achieves a successful ship catch (Flight 15?) we anticipate a marked change in the market's appreciation for Space as a viable domain for SI infrastructure," they say. "Space is a celestial 'escape valve' for terrestrial NIMBYism." Musk himself on Tuesday night wrote on X "data centers in space looking pretty appealing right now." SpaceX is off 4.7%.(elias.schisgall@wsj.com)

1708 GMT - The Democrat sweep of Congress doesn't change much for defense stocks, Morgan Stanley analysts say in a note, and they continue to view the sector as attractive. Substantially lower odds of a $350 billion defense funding package passing through reconciliation are already priced into defense prime stocks, the analysts say. Funding to replenish missiles is also likely to remain a priority despite the change in power, they add. "Now that the sector has put the midterms behind it, we think this could present a clearing event, and refocus the market on the fundamental geopolitical demand dynamics providing support for Defense," the analysts say. Lockheed Martin, RTX, L3Harris, and Northrop Grumman all trade in the red, while Boeing gains 2%.