November 1st Newsletter

Author

Da Yu
November 01, 2024

As of the market close on October 31, 2024.

Markets are increasingly betting on a “soft landing” for the U.S. economy, expecting inflation to ease without hindering growth. This week’s newsletter features big updates from GDP data and Big Tech earnings, see below for our section featuring earnings highlights from the Magnificent 7 and more. The U.S. economy grew at a solid 2.8% in Q3, slightly down from Q2’s 3.0%, fueled by robust consumer spending (+3.7%), exports (+8.9%), and federal spending (+9.7%), showing resilience ahead of Election Day, which is 4 days away on Nov. 5. Nonfarm payroll added just 12,000 jobs in October compared to the estimated 100,000 due to the hurricanes and the Boeing strike, while the unemployment rate met expectation of 4.1%. In international news, oil prices fell over 5% as Israeli strikes avoided Iranian crude facilities, and the Biden administration is preparing new restrictions on U.S. AI investments in China. The NYSE announced plans to extend trading on its electronic exchange, NYSE Arca, to 22 hours a day, pending SEC approval. 

On a separate note, don’t forget that Sunday is Daylight savings (“Spring forward, Fall backward”), so enjoy the extra hour of sleep!

Top 5 AI highlights

[1] 🔍 OpenAI’s ChatGPT Search feature brings real-time information with in-line citations to its users, positioning it as a competitor to Google and Perplexity, which is reported to raise over $500 million at a new valuation of $9 billion. Meta is rumored to be developing its own AI search engine for Instagram and Facebook aiming to reduce reliance on Google and Microsoft by building its web crawler and expanding data and location tools. More on Bloomberg and Reuters.

[2] 🌐 “Apple Intelligence” this week introduced generative AI across iPhone, iPad, and Mac, enhancing user experiences with features like refined writing tools, intelligent photo search, and a more conversational Siri. Privacy-focused, Apple integrates on-device processing and Private Cloud computing, ensuring data security as well. Read more.

[3] 💸 Elon Musk's xAI seeks to raise several billion dollars in a funding round that could value it up to $40 billion, a surge from its prior valuation of $24 billion just a few months ago when it raised $6 billion. Details on WSJ.

[4] 🤖 AI agents are revolutionizing employee onboarding, making it smoother, smarter, and customizable for over two-thirds of companies from a survey. Additionally, LinkedIn’s new Hiring Assistant automates tasks from job descriptions to candidate engagement, leveraging OpenAI’s technology to streamline recruitment. Read more CNBC and TechCrunch.

[5] 🌱 AI’s computing demands could lead to e-waste of up to 2.5 million tons annually by 2030, the equivalent of 10 billion iPhones. Goldman Institute highlights the need for the U.S. to strategically select global partners for data center outsourcing. With companies projected to spend $600 billion on AI data centers, this growth could challenge Europe’s decarbonization efforts, prompting major investment collaborations like KKR and ECP’s $50B deal to scale sustainable power infrastructure. More details CNBC and ESG news.

Founder’s Corner

The famous 80/20 principle for founders

What we read and listened to this week

  • Boeing launched a $19B share sale, one of the largest made by a public company, to boost liquidity. (Bloomberg)

  • Microsoft accuses Google of running a “shadow campaign” to discredit Microsoft with competition authorities, and policymakers and mislead the public. (CNBC)

  • JPMorgan sues customers over a viral scheme involving fake checks (social media spread false news about the “infinite money glitch“), aiming to recover stolen funds. (Axios)

  • Washington Post’s subscriber base declines by 250,000 (10%) after the decision to forgo presidential endorsement. (Guardian)

  • Dropbox to cut 20% of the global workforce, citing the challenging market and need for operational efficiency. (WSJ)

  • EY resigned as Super Micro’s auditor, citing concerns over controls, independence, and accounting practices. (CNBC) 

Special Section: Q3 Earnings Highlights

  • Alphabet stock rose 6% after Q3 earnings beat estimates, driven by strong 35% growth in cloud revenue. (YF)

  • Microsoft reported record earnings with Q3 revenue of $65.6B, +16% YoY, driven by 33% Azure growth and net income +11% YoY. (Forbes)

  • Meta missed user growth expectations of 3.31B with 3.29B, but beat earnings forecasts, with revenue +19% YoY and increased 2025 infrastructure expenses projected for AI investments. (CNBC)

  • AMD's Q3 earnings announced revenue of $6.8B and net income of $771 million, +158% YoY. Data center sales doubled, yet shares fell 9%, contrasting with much larger gains seen by competitors Nvidia and Broadcom. (CNBC)

  • Apple’s Q4 earnings beat estimates reporting $94.9B in revenue, +6% YoY; stock fell 1.8%, partially due to a one-time EU tax reversal. (YF)

  • Amazon’s Q3 report shows revenue of $158.9B, +11% YoY, Q3 net income increased to $15.3B, compared to $9.9B Q3 2023. (BW)

  • Reddit reported its first-ever profit at $29.9M, with 68% revenue growth and 47% user increase, as their shares surged by over 25%. (The Verge)

  • DoorDash forecasts strong Q4 core profit, expecting holiday demand for groceries, and beauty; reports first-ever profit. (Reuters)

AI M&A and Fundraising news

October 31:

  • Buddy AI: an English teaching AI app for kids, raised a $11M Seed round.

  • Persana AI: a sales team AI agent, raised a $2.3M funding round.

  • Spot AI: SF-based video monitoring startup, raised a $31M equity funding round.

October 30:

  • Cornerstone AI: Healthcare data cleaning, raised a $5M funding round.

  • iGent AI: London-based software AI, raised a $6.8M seed round.

  • Neara: Australian AI grid startup, raised a $31M Series C round.

  • Sana: Swedish AI agent developer, raised $55M at a $500M valuation.

  • Sapien: Financial analysis bots, raised a $10.5M seed round.

  • Speakeasy: API creation and testing, raised a $15M Series A round.

  • Tabs: NY-based B2B revenue automation, raised a $25M Series A round.

  • Vara: AI breast cancer detection platform, raised a $8.9M funding round.

  • Verax AI: Enterprise AI control, raised a $7.6M Seed round. 

  • Wobby: Belgian knowledge platform, raised a $1.2M seed round.

October 29:

  • Abstract Security: Security data management startup, raised a $15M Series A round.

  • Auquan: AI agents for financial services, raised a $4.5M Seed round.

  • Brightwave: AI agent for financial research, raised a $15M Series A round.

  • Browserbase: Web browser automation startup, raised a $21M Series A round.

  • Elevate: Consumer-directed benefits platform, raised $20M in growth funding.

  • Fingercheck: Workforce management platform, raised $115M in a growth investment round.

  • Moondream: Vision-language model, raised a $4.5M Pre-seed round.

  • Reflexivity: AI financial research startup, raised a $30M Series B round.

  • Zenity: Security for low-code/no-code apps, raised a $38M Series B round.

October 28:

  • Boardy: AI networking startup, raised a $3M pre-seed round.

  • Casap: Dispute automation for banks, raised $8.5M.

  • Hue: User-generated video platform, raised a $4.5M Seed round.

  • Nooks: AI sales call analysis and customer interaction summary tool, raised a $43M Series B round.

  • Oboe: Personalized learning platform for students, raised a $4M seed round.

  • OLOID: Passwordless authentication startup, raised a $6M Series A round.

  • Osigu: Latin America-focused healthcare payments platform, raised a $25M Series B round.

  • paretos: German AI startup, raised a $9.2M Series A round.

  • Reactiv: Mobile commerce startup, raised a $5M seed round.

  • Read AI: Meeting and email summarization tool, raised a $50M Series B round.

October 27:

  • Arcade AI: AI jewelry designing platform, raised a $16M round.

  • Fligran: French threat intelligence platform, raised $35M in Series B funding, led by Insight Partners, with Accel and Moonfire participating.

October 25:

  • Aether: AI for rooftop solar installations, raised a $2.5M Seed round.

  • Agility: Humanoid robotics startup, is raising $150M at $1B valuation.

  • Concentric AI: Data security company, raised a $45M Series B round.

  • Pacific Fusion: Nuclear fusion startup, raised a $900M Series A round.

  • Origin: Autonomous systems for defense applications, raised a $2.6M Pre-seed round.

  • Pharos: Hospital quality reporting platform, raised a $5M seed round.

  • Socure: AI-driven fraud prevention firm, acquired Effectiv for $136M.

  • Speckle Systems: 3D data management for AEC teams, raised a $12.5M Series A round.

  • Urbint: AI risk management for utilities, raised $35M in a growth funding round.

  • Waymo: Alphabet's self-driving unit, closed $5.6B funding round led by Google.

Attached to this email, you’ll find a summary of this week’s highlights and the financial performance of select public companies, providing you with a snapshot of recent market movements.

Stepmark Weekly Market Update_11.01.2024921.51 KB • PDF File