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Money

Robinhood surge: Gamestop 2.0?

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Robinhood was off to a rocky start last week on its first day of trading, but its fortunes have turned

Shares in Robinhood have surged, climbing as much as 82 per cent. The volatility led to Nasdaq pausing trading several times to accomodate for the wild price swings.

It comes less than a week after the Californian-based company listed in a disappointing IPO. The app’s commission-free transactions has attracted investors who have ample time and money to spare during the pandemic.

Yesterday’s gains have lifted the platform’s market valuation above hundreds of blue-chip companies such as Ford and Heinz.

Social media frenzy

But this week’s reversal reflects retail investors embracing the stock on social media and the availability of options tied to Robinhood’s shares. There is speculation the firm could be seeing the same frenzied trading that surrounded the video game retailer Gamestop.

Momentum has also sped up as some big-name investors have bought in. this includes Cathie Wood, who manages the investment fund Ark Invest.

There was “considerable cheering for Cathie” Wood on Reddit said Ivan Cosovic, founder of Breakout Point.

Cathie Wood, pro stock-picker and founder of $60 billion ARK Invest,

Meme stocks

Robinhood is a trading hub for meme stocks, which blew up earlier this year. Users of the platform used social media platforms such as Reddit to organise buying up stocks from GameStop and AMC.

Mentions of ‘Robinhood’ blew up on Reddit yesterday morning. Investors rallied around the goal of a $60 share price, a huge jump from $35.15 on Friday.

Costa is a news producer at ticker NEWS. He has previously worked as a regional journalist at the Southern Highlands Express newspaper. He also has several years' experience in the fire and emergency services sector, where he has worked with researchers, policymakers and local communities. He has also worked at the Seven Network during their Olympic Games coverage and in the ABC Melbourne newsroom. He also holds a Bachelor of Arts (Professional), with expertise in journalism, politics and international relations. His other interests include colonial legacies in the Pacific, counter-terrorism, aviation and travel.

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Money

Big Tech pushes AI investments

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Tech giants like Microsoft and Meta are accelerating AI data center spending, with massive capital pouring into these projects.

Microsoft and Meta reported on Wednesday that AI investments are spiking their expenses, while Alphabet announced similar trends.

Amazon, due to report earnings shortly, is expected to mirror these projections, foreseeing further pressure on profit margins.

Wall Street is getting wary of the financial strain, as each company’s stock took a hit this week despite strong quarterly numbers.

Shares of Meta fell over 3%, and Microsoft saw a 6% drop, underscoring Wall Street’s jitters.

“It’s expensive to keep up with AI technology demands,” says GlobalData’s Beatriz Valle, emphasising a competitive race in AI capacity.

The high-stakes investments are starting to test investor patience in Big Tech’s ambitious AI journey.

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Money

Meta expects strong holiday ad revenue boost

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Meta’s holiday-quarter forecast beats expectations as AI tools drive growth

Meta Platforms, parent company of Facebook, has forecast holiday-quarter revenue that surpasses market expectations, anticipating a surge in ad spending as the year ends.

The projection comes as Meta’s AI-driven advertising tools and short-form video feature Reels have spurred revenue growth this year.

Meta’s shares dipped 2.5% in after-hours trading, despite a third-quarter profit of $6.03 per share—well above analysts’ forecast of $5.25.

Analysts expect digital ads to have a “blockbuster” year in 2024, helped by improved economic forecasts and steady consumer spending.

Meta, heavily reliant on advertising revenue, stands to benefit from increased holiday marketing as it eyes revenues of $45 to $48 billion this quarter.

The company’s third-quarter revenue reached $40.59 billion, narrowly topping analysts’ estimates.

With interest rates easing, analysts suggest Meta’s ad revenue could continue to thrive into the new year.

As holiday spending ramps up, Meta’s AI investments are paying off.

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Money

Microsoft CEO Satya Nadella receives $30 million pay raise

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Despite layoffs, Nadella’s pay jumps 63% amid company growth

Microsoft’s CEO, Satya Nadella, saw a significant 63% pay raise this year, with his total compensation rising to $71 million, up from $48.5 million in 2023. This comes even as Microsoft laid off 2,500 employees, including job cuts in its gaming division, following its $69 billion acquisition of Activision Blizzard.

While concerns were raised in Congress over cybersecurity breaches, Microsoft’s stock still rose by over 16% this year, benefiting investors, although it lags behind the broader S&P 500. Investors are now eagerly awaiting the company’s earnings report next week.

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