In today’s top stories, tech M&As rebound, Nintendo CEO says he won’t hike up prices and Wall Street speculates whether the selloff in China tech has bottomed. Meanwhile, Citi advises on how to beat volatility and BofA adds Meta to its best ideas list.
Tech M&A heats up
August has already been a busy month for deal activity, with around $13.4bn worth of tech-related mergers and acquisitions taking place in North America in the first 10 days of the month. Notably, ecommerce giant Amazon [AMZN] announced a $3.5bn deal with 1Life Healthcare last month and a $1.65bn agreement with iRobot (maker of the Roomba vacuum — pictured above), while the largest deal was inked by Vista Equity Partners and tax software provider Avalara for $8.4bn.
Citi’s advice on how to beat volatility
While it appears stocks are rebounding, Citi and Goldman Sachs analysts aren’t so optimistic. Citi analyst Kristen Bitterly says to expect more volatility, but points out that there are opportunities. For example, “quality” tech like cybersecurity could offer high single-digit or low double-digit yields. Bitterly also says it is important to maintain a balanced exposure, as there are still opportunities to make gains from growth stocks that have lost favour among investors.
Meta among BofA’s best ideas list
With the broader communications sector making gains on Wednesday, Facebook owner Meta Platforms [META] was added to BofA Securities’ US 1 list. The Meta share price was up close to 6% on Wednesday, while the Communication Services Select Sector SPDR Fund was 2.9% higher — marking its best day since 27 July. To make space for Meta, BofA removed Alphabet [GOOGL] from its list, though it maintained a ‘buy’ rating.
Nintendo isn’t considering price hikes
An interview with Nintendo’s president Shuntaro Furukawa revealed that the company isn’t considering raising the price of its Switch console. Though Switch sales fell 23% in Q2, Furukawa remained confident that Nintendo can achieve its 21,000 sales FY 2023 goal and pointed out the “lineup of new games” that should help to generate sales. However, the Switch will soon be up against more competition after Logitech announced its partnership with Tencent to develop a new handheld games console.
China tech selloff may not be the bottom
Despite a $1.2trn selloff since February last year, some investors think that China’s three largest tech stocks haven’t reached a bottom yet, The Wall Street Journal reported. Alibaba [BABA], Tencent [TCEHY] and Meituan [3690.HK] have struggled amid the regulatory crackdown and strict Covid-19 lockdowns, though some large fund managers see a buying opportunity as political pressure eases and consumer spending starts to recover.
Can wind power players weather the storm?
Demonstrated by this week’s passing of the landmark $369bn climate bill, clean energy stocks are poised for further growth. Wind power will play an important role in the energy transition, which should benefit key players like Nordex [NDX1.DE], Siemens Gamesa [SGRE.MC] and Greencoat UK Wind [UKW.L]. However, it isn’t all plain sailing for the clean energy theme in 2022, with rising raw material costs just one pressure potentially shrinking companies’ profits.
Episode 123 — Legendary investor Jim Rogers’ market predictions
This week, Opto Sessions revisits one of its most popular episodes with market veteran Jim Rogers, who co-founded the Quantum Fund with George Soros. The interview provides a captivating look back at a market aficionado’s geopolitical predictions which, while only two years have passed, were made in an almost unrecognisable market environment. Since speaking with Rogers in May 2020, the S&P 500 has been in two bear markets as a devastating pandemic and war weaken global economies.
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