Latest news with #RobertSchiffman
Mint
8 hours ago
- Business
- Mint
Eye for AI: Stocks recover as tech giants spend big on AI infrastructure — what lies ahead?
Shares of companies that provide infrastructure for artificial intelligence (AI) development bounced back from a tumble earlier this year, as spending by Big Tech restores investor confidence in the tumultuous sector, reported Bloomberg. Goldman Sachs Group tracked two baskets — one tracking AI data centres and electrical equipment stocks, which rose 52 per cent, and another that follows shares of companies that supply power for data centres, which also rose 39 per cent. Both went up from their April lows. Individual standouts in these baskets include Vertiv Holdings Co, which has notched a 94 per cent gain since April 4, as well as Constellation Energy Corp, which went up 75 per cent in that same period. The world's largest technology companies, including Amazon, Alphabet, Microsoft and Meta are continuing to spend big on artificial intelligence, mitigating doubts over whether money will continue flowing to the firms that are essential to AI infrastructure, said Bloomberg. Forecasts for capital expenditures to support AI demand are up by 16 per cent since the beginning of the year, according to Bloomberg Intelligence's Robert Schiffman. 'Earnings season reminded investors that generative-AI doesn't run on buzzwords — it runs on concrete, copper and gigawatts,' CEO of Roundhill Financial Dave Mazza told Bloomberg. Shares of AI infrastructure companies are witnessing an uptick over the business potential of artificial intelligence which sparked a spending spree on data centres to fund the development of AI programs like OpenAI's ChatGPT and Anthropic's Claude, reported Bloomberg. A strong start in 2025 unravelled as worries over competition from China's DeepSeek startup and broader uncertainty over global trade led investors to be wary of the billions of dollars of investment made during the period. Concerns that tech giants such as Microsoft were walking away from data centre projects further pushed the selloff. Investor sentiment improved when President Donald Trump announced the pause of most of the tariffs he had rolled out in early April, which fuelled a rally that pushed the S&P 500 Index near an all-time high hit in February, as per Bloomberg data. Another reason is the latest earnings season which helped investors gain confidence in the sector, as big tech companies indicated they were continuing to lay money out on AI development. Among these was Meta, which signalled that the hundreds of billions in AI spending it had flagged earlier in the year was still on track, said Bloomberg. Recent corporate deals also suggest that spending on AI infrastructure remains intact. Amazon plans to invest $10 billion in North Carolina to expand its data centre infrastructure to support AI and cloud computing technologies, reported Bloomberg. Deputy chief investment officer at Franklin Templeton Investment Solutions, Max Gokhman told Bloomberg that investor confidence in AI could take another hit if the trade war once again heats up and sparks concerns that a downturn in global economic growth will see companies cut on AI spending. 'If the economy falls into a recession, margins will be under pressure, companies will be forced to lay off workers and cut spending on AI,' Gokhman told Bloomberg.
Yahoo
30-04-2025
- Business
- Yahoo
Alphabet Leads Busiest Day for Euro Bond Sales Since January
(Bloomberg) -- Google parent Alphabet Inc. led the biggest rush in months into Europe's bond market on Tuesday, as borrowers seized on improving investor sentiment to raise cash. New York City Transit System Chips Away at Subway Fare Evasion NYC's Congestion Toll Raised $159 Million in the First Quarter The Last Thing US Transit Agencies Should Do Now At Bryn Mawr, a Monumental Plaza Traces the Steps of Black History At the National Public Housing Museum, an Embattled Idea Finds a Home The tech giant is set to raise €6.75 billion ($7.7 billion) from a debut sale of euro bonds in a rare five-part offering, the standout deal among the 20 borrowers coming to the market. They brought a total 27 tranches of debt, the most in a single day since Jan. 7, according to data compiled by Bloomberg. The sales came as companies took advantage of a recovery in credit markets following a slide stoked by US President Donald Trump's trade announcements. Tariff-induced swings in sentiment had put some deals on hold, and given the uncertainty over policies in the world's biggest economy going forward, there's no telling when the next bout of volatility will start. That drew issuers including the Republic of France, retailer Carrefour SA and insurer Ethias SA, as well as a junk-rated deal from German drugmaker Stada Arzneimittel AG. In total, borrowers are set to raise over €28 billion, with final sizes set but not all deals priced yet. Robust investor demand was also seen in the US on Monday, where 15 borrowers in the high-grade primary market raised $18.3 billion and compressed spreads by more than average. That included a $5 billion sale of dollar debt by Alphabet, its first since 2020. Euro Debut Alphabet's euro deal tops that for size. It includes maturities of between four and 29 years, according to a person familiar with the matter, who asked not to be identified. The final spreads tightened by around 30 basis points from initial discussions, taking the shortest tranche to 52 basis points over mid-swaps and the longest to 160. The deal is expected to price later today. The deals could lower its cost of capital and indicate the potential for larger future buybacks and AI capital investments, Bloomberg Intelligence analysts Robert Schiffman and Alex Reid wrote on Monday. The company is not lacking money: they point to Alphabet's $95 billion cash balance and the ability to generate close to $300 billion in free cash flow over the next three years. Its 29-year bond in euros would be the second-longest corporate bond sold in Europe this year, data compiled by Bloomberg shows. The company plans to use the proceeds of the sale for general corporate purposes, including the repaying of outstanding debt. The deal is being managed by Goldman Sachs Group Inc., HSBC Holdings Plc and JPMorgan Chase & Co. as global coordinators, along with Barclays Plc and Deutsche Bank AG as bookrunners. --With assistance from Paul Cohen. (Updates with final deal size details throughout.) Made-in-USA Wheelbarrows Promoted by Trump Are Now Made in China As More Women Lift Weights, Gyms Might Never Be the Same Why US Men Think College Isn't Worth It Anymore Eight Charts Show Men Are Falling Behind, From Classrooms to Careers The Mastermind of the Yellowstone Universe Isn't Done Yet ©2025 Bloomberg L.P. Sign in to access your portfolio
Business Times
29-04-2025
- Business
- Business Times
Google parent Alphabet kicks off sale of debut euro bonds
[CALIFORNIA] Google parent Alphabet is looking to raise at least 2.5 billion euros (S$3.72 billion) from a debut euro bond sale on Tuesday (Apr 29), just after selling US$5 billion of debt in the US. The tech company is offering an unusual five-part deal with benchmark sizes and maturities between four and 29 years, according to a person familiar with the matter, who asked not to be identified. The deal is expected to price later today. Initial price discussion for the offerings are from around 85 basis points over mid-swaps for four-year tranche, to around 190 basis points above for the 29-year securities, the person said, which are likely to tighten throughout the day. The sale comes as companies rush to raise funding after credit markets recovered much of their initial slide stoked by President Donald Trump's trade announcements. US tariff-induced swings in sentiment put some deals on hold, and given the uncertainty over the policies of the world's biggest economy going forward, there's no telling when the next bout of volatility will start. Alphabet's sale could lower its cost of capital and indicates the potential for larger future buybacks and AI capital investments, Bloomberg Intelligence analysts Robert Schiffman and Alex Reid wrote on Monday. The company is not lacking money: they point to Alphabet's US$95 billion cash balance and the ability to generate close to US$300 billion in free cash flow over the next three years. The company plans to use the proceeds of the sale for general corporate purposes including the repaying of outstanding debt. Its dollar offering on Monday was the company's first since 2020. The 29-year bond in euros would be the second-longest corporate bond sold in Europe this year, data compiled by Bloomberg shows. BLOOMBERG
Irish Independent
24-04-2025
- Business
- Irish Independent
Tech giants dig into their $500bn cash holdings to fund programme of share buybacks
Move allows firms give support to their own stock ©Bloomberg While many investors have been scared away from tech giants at the centre of this year's equity rout, the companies are likely to continue plowing money into buybacks that will offer at least one source of continuing support for the stocks. The big tech firms could be tempted to hold onto their cash to guard against the economic turmoil created by US president Donald Trump's tariff policies. However, buybacks remain attractive because companies like Microsoft, and Apple are sitting on piles of cash worth north of $500bn (€440bn). 'My sense is we're going to see probably little to no slowdown in buybacks, said Robert Schiffman, a senior credit analyst at Bloomberg Intelligence. 'You don't need to hoard cash if you have $30, $50, $100bn in cash on your books.' The first signals of the trajectory should come from Alphabet's earnings announcement today. Apple, which is the biggest buyer of its own shares, reports on May 1. Both companies typically use the first quarter earnings season to report new buyback authorisations and other capital return plans. Sitting on cash doesn't make a lot of sense A year ago, Alphabet authorised the repurchase of $70bn in shares and initiated a dividend, while Apple earmarked $110bn for buybacks. The threats from tariffs – to economic growth and profits – have driven investors out of the technology stocks that led US markets higher for most of the past two years. The tech-heavy Nasdaq 100 index is down about 18pc from a record high just two months ago, and the biggest names have fallen even more. Apple has dropped 23pc from a December peak while Alphabet is off 27pc from a February record high. In the face of such uncertainty, buybacks can be a show of financial strength. Two weeks ago, Broadcom reported a $10bn buyback plan – the first since 2022. CEO Hock Tan said it reflected board confidence in the strength of the chipmaker's businesses. 'As an investor, it's always about risk-reward – and if you have a business trying to help you see where relative value is, it maybe gives them confidence that there's a natural buyer at those levels or lower,' said Keith Lerner, chief market strategist at Truist Advisory Services. 'That by itself can be positive.' ADVERTISEMENT The capital returns of tech giants have long been a source of attraction for investors and a display of their immense profitability. Buybacks in particular are seen as an efficient way to return cash to shareholders, by reducing the number of shares outstanding, which boosts earnings per share. Despite many of the big tech companies spending heavily to beef up their artificial intelligence computing capacity, the sector is still generating plenty of cash. Combined free cash flow for the six biggest technology companies – Apple, Microsoft, Nvidia, Alphabet, and Meta Platforms – is expected to be nearly $100bn in the first three months of 2025, according to analyst estimates compiled by Bloomberg. 'The Big Tech balance sheets have never been stronger,' said Mr Schiffman. 'If you don't have anything else to spend it on, sitting on cash doesn't make a lot of sense.'
