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FTSE 100 hits yet another record high while DAX 40 and S&P 500 resume their ascents Outlook on FTSE 100, DAX 40 and S&P 500 amid strong US earnings. Source: Getty Images Written by: Axel Rudolph FSTA | Senior Financial Analyst, London Publication date: Friday 26 April 2024 13:42 FTSE 100 hits yet another record high Foreign investor buying of the undervalued UK blue chip index led to further gains in the FTSE 100 which is trading at yet another record high. The 8,200 zone is now in focus, above which lies the 8,300 mark which is where the 161.8% Fibonacci extension of the March-to-June 2020 advance, projected higher from the October 2020 low, can be found. Support sits between the early-to-mid-April highs and Wednesday’s low at 8,046 to 8,003. Source: ProRealTime DAX 40 recovers from Thursday’s low The DAX 40 was dragged lower by its US counterparts following the release of much weaker-than-expected preliminary Q1 GDP data but overnight recovered on better-than-expected US earnings. A rise above Thursday’s 18,080 high would engage this week’s high at 18,238 ahead of the 18,500 region. Yesterday’s low was made along the 55-day simple moving average (SMA) at 17,815. Source: ProRealTime S&P 500 resumes its ascent The S&P 500 resumes its ascent, having on Thursday slipped to 4,990 on disappointing US Q1 preliminary GDP data, before recovering on strong earnings by the likes of Alphabet, Microsoft and Snap. The index is heading towards the 55-day simple moving average (SMA) 5,114 above which the April downtrend line can be seen at 5,146. Slips may find support can be seen around Monday’s 5,039 high. Source: ProRealTime

Gold price, Brent crude price and natural gas price rise in early trading Commodity prices have gained in early trading, recovering from the lows seen earlier in the week. Source: Getty Images Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Friday 26 April 2024 13:25 Gold up as price recovers from late April weakness The price has pushed higher in early trading, reinforcing the view that a higher low has been formed. Additional gains would head towards the $2400 highs from the middle of April, and then on to $2425. For the moment, $2300 appears to have been established as a higher low, so a close back below this level would be needed to open the way to the 50-day simple moving average (SMA). Source: ProRealTime WTI higher for a second day After bouncing off the 50-day SMA earlier in the week the price has continued to push higher, with further gains in early trading this morning. A higher low appears to have formed, and now the price is testing trendline resistance from the early April high. A breakout above this would target $85.72, last Friday’s high, and then on to $87, the highs from the beginning of April. A reversal back below $82 might result in a test of the 50-day SMA and last week’s low. Source: ProRealTime Natural Gas gains continue Despite a sudden drop on Wednesday the price has maintained the move higher from the beginning of April. Trendline support from the end of March continues to underpin the price action, and continued gains will target the 100-day SMA and the highs from the beginning of the week at 2130. Sellers will want to see a close below Thursday’s low and below trendline support to mark a more bearish development. Source: ProRealTime

Gold drops amid eased tensions, eyeing potential boosts from a wavering dollar around the $2320 level. Silver faces a crucial resistance, outlining future directions for metals as safe-haven demand wanes. Source: Getty Forex Shares Commodities Gold Market trend Risk Written by: Richard Snow | Analyst, DailyFX, Johannesburg Publication date: Friday 26 April 2024 06:45 Gold bulls looks for inspiration in the dollar after tensions subside Implied gold volatility (GVZ) has experienced a notable drop now that the risk of a broader conflict in the Middle East has subsided massively. As a natural result, gold prices have pulled back, but remain at elevated levels. Gold bulls may be looking to a slightly weaker dollar in anticipation of a bullish continuation for the metal, but in recent weeks, gold has appeared detached from its usual inverse relationship with the greenback as the two have risen together. Gold 30-day implied volatility Source: TradingView Gold attempts to lift off support at $2320 Gold, after spending a significant amount of time in overbought territory, has cooled and declined towards the $2320 level, where it has oscillated. With a reduced safe haven appeal, the gold market appears to be in search of the next bullish, or even bearish, catalyst. US data has revealed early signs of vulnerability, which could affect US yields and the dollar if major data points follow suit. But for now, the dollar remains strong, with rate cut bets being pushed further and further out. At this level, $2320 may offer a launchpad for gold if price action unfolds in a similar way to what developed back in March after printing a new all-time high; and consolidating along $2146.80 (prior all-time high) before the next leg higher. However, should bears take over from here, $2222 appears as the nearest level of support before the 50-day simple moving average (SMA) emerges around $2200 flat. Today’s GDP miss and the disappointing flash PMIs have opened the door to weaker US data. Something to keep an eye on in the future. Gold daily chart Source: TradingView Silver (XAG/USD) tests Fibonacci level currently acting as resistance Silver, similarly, to gold, has also dropped sharply as risk sentiment recovered. The rise in risk tolerance provided an opportunity for Indices and high-beta currencies like the Aussie dollar and the pound to claw back losses. Speaking of risky assets, Meta’s forward guidance sent the S&P 500 lower but the magnitude is of the drop is unlikely to prompt a panicked switch to safer assets like gold and silver. Silver hovers around the 78.6% Fibonacci retracement of the 2021 to 2022 decline at $27.40, with the level appearing to provide resistance to a possible bullish continuation. A move to the downside from here would highlight the 61.8% Fib level at $25.30 (coinciding with the 50 day SMA). Silver daily chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

AUD/USD rises on inflation optimism, testing resistance around 0.6502-0.6533 with sights on 0.6650. Meanwhile, AUD/JPY reaches a decade high, albeit in overbought territory, as market eyes Bank of Japan's next moves. Source: Getty Forex Shares Australian dollar AUD/JPY Bank of Japan Market sentiment Written by: Nick Cawley | Analyst, DailyFX, London Publication date: Friday 26 April 2024 07:21 The Australian dollar has turned higher against its US counterpart over the week as a positive risk sentiment backdrop, and higher-than-forecast domestic inflation gave the currency a boost. This week’s rally has now run into resistance off a cluster of simple moving averages, currently between 0.6502 and 0.6533 and these will need to be cleared to allow the pair to move higher. The recent move has produced five higher lows and higher highs in a row, a bullish setup, while the CCI indicator shows this week’s move has taken the pair into neutral territory, from a heavily oversold position. A move higher - above the three moving averages - opens the way to 0.6650. Support at just under 0.6350 and then between 0.6270 and 0.6287. AUD/USD daily price chart Source: TradingView AUD/USD: traders remain bullish, but recent shifts suggest potential reversal Retail trader data reveals that 61.56% of traders are currently net-long on AUD/USD, with a ratio of 1.60 long positions for every short position. This indicates a bullish sentiment among traders. However, the number of net-long traders has decreased by 6.42% since yesterday and 27.26% since last week. In contrast, net-short positions have increased by 9.77% and 66.35% over the same timeframes. While the contrarian view suggests that the net-long position could lead to further price declines, the recent shifts in sentiment signal that a potential reversal to the upside may be on the horizon for AUD/USD, despite traders remaining net-long. The Bank of Japan (BoJ) will announce its latest policy decision overnight, and while all monetary settings are set to remain untouched, the accompanying Quarterly Report may well give some hints to future policy moves. The Japanese yen remains weak and will remain that way until the market is convinced that BoJ is going to move in and prop up the currency with actions, not words. AUD/JPY is back at levels last seen in November 2014, and the daily chart shows a year-long pattern of higher highs and higher lows as the yen wilts against a robust Australian dollar. The CCI indicator shows the pair in extreme overbought territory and this may temper any further short-term move higher. Unless the BoJ makes a stance, AUD/JPY is set to move higher. AUD/JPY: traders remain bearish, but recent shifts strengthen bullish contrarian view Retail trader data reveals that only 18.85% of traders are currently net-long on AUD/JPY, with a short-to-long ratio of 4.30 to 1. This indicates a strong bearish sentiment among traders. However, the number of net-long traders has decreased by 18.81% since yesterday and 49.69% since last week. In contrast, net-short positions have increased by 9.29% and 22.15% over the same timeframes. As contrarian investors, this net-short position suggests that AUD/JPY prices may continue to rise. The increase in net-short positions and the decrease in net-long positions further strengthen our AUD/JPY-bullish contrarian trading bias. AUD/JPY daily price chart Source: TradingView This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

The Nasdaq seems on track to recover all of its overnight losses, supported by a 4.4% after-market gain in Microsoft’s share price and an 11.5% after-market surge in Alphabet’s share price. Source: Getty Shares Microsoft Cloud computing Price Share price Revenue Written by: Yeap Jun Rong | Market Strategist, Singapore Publication date: Friday 26 April 2024 04:32 Alphabet and Microsoft’s share price surged post-results Following the initial jitters around Meta’s results, after-market earnings from Alphabet and Microsoft offered Wall Street a lifeline, with US equity futures pointing to a recovery in risk sentiments. The Nasdaq seems on track to recover all of its overnight losses, supported by a 4.4% after-market gain in Microsoft’s share price and an 11.5% after-market surge in Alphabet’s share price. The other Magnificent Seven stocks seem set for a positive open as well, with Nvidia up 2.4% and Amazon up 3.1%. Microsoft’s 4Q 2024 round-up Source: Refinitiv Microsoft’s 4Q 2024 results delivered both a top and bottom-line beat. Revenue was 1.8% higher than consensus at $61.9 billion, up 17% year-on-year. Earnings per share (EPS) has beaten expectations by 4.3%, coming in at $2.94 and up 20% from the $2.45 a year ago. Net profit margin improved from last year as well, coming in at 35.5% versus the previous 34.6%. Stronger cloud performance offered reassurances Notably, markets took comfort with the further growth in its cloud division. Revenue from Azure and other cloud services grew stronger-than-expected at 31% versus the 30% prior, which is on track to outpace its top competitors – Google Cloud and Amazon Web Services. Other segments continue to hold up as well, with a 17.5% year-on-year in its ‘More Personal Computing’ segment showing further recovery in consumer demand for personal computers (PCs) after a lacklustre year. Its productivity software has been very much stable as well, with the segment growing 11.8%. Forward guidance was net-positive overall Revenue guidance for 4Q 2024 was a tad lower-than-expected at $64 billion versus the $64.5 billion consensus, but markets may be more forgiving given the company’s positive outlook around artificial intelligence (AI) demand moving forward. “Currently, near-term AI demand is a bit higher than our available capacity” While capital expenditures will continue to increase to keep up with the tech race, Microsoft expects its FY2025 operating margin to decline "only one point year-over-year, even with its significant cloud and AI investments". This offers reassurances that heavy spending on infrastructure will pay off in the near term in terms of higher revenue and will not be an expensive long-term bet. Technical analysis: Microsoft’s share price defending daily cloud support The after-market surge in Microsoft’s share price may suggest that buyers have successfully defended the lower edge of its daily Ichimoku Cloud support at the US$398.40 level, which may likely keep the broader upward trend intact. This marked a key support confluence, which held prices up on at least three occasions since the start of the year. Its daily relative strength index (RSI) is back to retest the key 50 level after breaking below the mid-point to its lowest level September 2023. Any reversion back above the level will bode well for the upward trend to continue. The US$398.40 level will serve as key support to hold, while on the upside, its record high at the US$430 level will be on watch as key resistance to overcome. 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Nasdaq 100 and S&P 500 drop back as Hang Seng continues to rally US indices are struggling in the wake of Meta’s earnings last night, but the Hang Seng is showing fresh strength. Source: Getty Images Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Thursday 25 April 2024 13:53 Nasdaq 100 rally torpedoed by Meta earnings The index reversed course yesterday, giving back most of the gains made on Tuesday, as earnings from Meta soured sentiment. The price remains well above last week’s low for the time being, but with more earnings from Big Tech due in the coming week, further upward progress may be difficult. So long as the price holds above last week’s low at 16,970 then a bounce may yet materialise. A close back above 17,700 would help to bolster the bullish view. Alternately, a close back below 16,970 will bring the late 2021 high at 16,630 into play, and then on down to the 200-day simple moving average (SMA). Source: ProRealTime S&P 500 stumbles on tech earnings This index also took a knock on Wednesday, though it continues to look like it has created a higher low. A push back above the highs of the week so far at 5093 would mark a bullish development, and would open the way to the 50-day SMA, and then on to the highs from late March at 5274. Sellers will want to see a reversal back below the 100-day SMA and below last week’s low at 4925 to provide a more bearish view. Source: ProRealTime Hang Seng surges through key level This index has seen an impressive bounce from the lows of mid-April, which has caried it above 17,000 and the 200-day SMA. It has also succeeded in closing above the latter, for the first time since July. If the price can manage a close above 17,200, then this will be a significant development. 17,200 was the high from early January, and also the peak of March and April, as well as being support from early November. Further gains target the November 2023 high around 18,300. A reversal back below the 200-day SMA would be needed to put more of a dent in the bullish view. Source: ProRealTime

Sourece: Getty Images Mergers and acquisitions Valuation Iron ore Leverage Balance sheet Written by: Shaun Murison | Senior Market Analyst, Johannesburg Publication date: Thursday 25 April 2024 14:56 Key takeaways BHP has proposed a strategic all-share merger with Anglo American Anglo American's shareholders would receive 0.7097 BHP shares for each Anglo American share, plus shares in Anglo American Platinum and Kumba Iron Ore distributed proportionally This proposal values Anglo American at approximately £31.1 billion, a premium over current valuations The merger aims to combine BHP's high-margin, cash-generative assets and strong balance sheet with Anglo American’s diverse commodities portfolio The proposal remains non-binding, subject to due diligence, with no firm commitment yet made BHP has reserved the rights to alter the terms or structure of the proposal, while also setting a deadline of May 22, 2024, to formalize their intention Further strategic reviews of Anglo American’s operations, particularly its diamond business, are planned post-merger Strategic Merger Proposal BHP has proposed a strategic all-share merger with Anglo American, offering 0.7097 of its shares for each Anglo American share, with additional distributions of shares in Anglo American Platinum and Kumba Iron Ore to Anglo American shareholders. This proposal aims to consolidate the strengths and portfolios of both companies for enhanced market competitiveness and growth. Valuation Premiums and Financial Benefits The proposal values Anglo American's share capital at approximately £31.1 billion, offering a substantial premium over current market valuations. Anglo American shareholders would see an immediate increase in value, with a significant premium on the weighted average share price over the past 90 days, alongside direct holdings in Anglo Platinum and Kumba. Operational Synergies and Growth Potential The merger is designed to leverage operational, procurement, and marketing synergies between BHP and Anglo American, which could enhance profitability and yield significant cash flows. Key synergy areas include combining high-quality assets from both companies, particularly in iron ore, metallurgical coal, and other future-facing commodities like potash and copper. Strategic Review and Talent Integration Post-merger completion, Anglo American’s high-quality operations, including its diamond business, will undergo a strategic review. Furthermore, the merger aims to utilize the deep talent pool from both organizations to drive successful integration and operational excellence, potentially benefiting broader community stakeholders. Conditional and Non-binding Nature of the Proposal The proposal, while detailed, remains non-binding and subject to conditions such as satisfactory due diligence and regulatory approvals. BHP has set a deadline of May 22, 2024, to either declare a firm intention to proceed with the offer or withdraw, emphasizing the cautious approach and compliance with regulatory norms governing such transactions. Anglo American Plc (FTSE) analyst ratings Source: IG TipRanks Based on 12 Wall Street analysts offering 12 month price targets for Anglo American in the last 3 months. The average price target is 2510.77p with a high forecast of 3264.41p and a low forecast of 1741.02p. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Gold and silver losses pause, while Brent crude oil tiptoes higher Gold and silver continue to form an apparent higher low, while oil prices are aiming to resume their move higher. Source: Getty Images Written by: Chris Beauchamp | Chief Market Analyst, London Publication date: Thursday 25 April 2024 14:02 Gold selling halted for now For the moment the price has managed to halt any further declines. Early trading has seen the price attempting to move higher, having found buyers at the lows just above $2300. A close above $2340 could trigger a new move to the upside that would target $2400. Sellers will want to see a close back below $2300 and then below $2291, the low from Tuesday, though the broader uptrend is still firmly intact. Source: ProRealTime Brent edges higher Oil prices wobbled yesterday after the solid gains seen on Tuesday, but have put their best foot forward in early trading this morning. A higher close today would help to reinforce the view that a higher low was created last week when the price bounced off the 50-day simple moving average. Further gains would head towards $90, and then on to the early April high around $91.50. Source: ProRealTime Silver stabilises above $27 Silver prices have also stemmed the losses over the past week, holding above $27. A higher close today will help bolster the bullish outlook and suggest that a higher low has formed around $27. Additional gains target the mid-April highs at $29. A close below $26.50 would mark a bearish development and, as with gold, suggest a deeper retracement in a broader uptrend. Source: ProRealTime

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Microsoft, Apple, Nvidia, Amazon and Meta could be the best AI stocks to watch next month. These stocks are the largest AI stocks in the US based on market capitalisation. Source: Bloomberg 2023 was inarguably the year of AI — as the big NASDAQ tech stocks experienced huge surges in market capitalisation — backed by hopes that artificial intelligence progress, in particular in generative AI, could displace current models of working. These so-called ‘magnificent seven’ have driven much of the gains in the US market, with market darling Nvidia rising to $950 per share in March. However, the company has since corrected to $824, recently suffering a 10% one-day fall as investors weigh up the relative risks and rewards. AI in 2024 While AI is undoubtedly filtering into ever more aspects of daily life and work environments, new tech has a history of inspiring market bubbles which pop before the winners go on to generate sustainable growth. This was arguably the case with the dot-com crash — and while no two scenarios are exactly the same, history does tend to rhyme. On the other hand, the AI advances of the last 18 months have been extraordinary — with artificially generated text, imagery and video available to the masses on a scale never before seen. There are even rumours that OpenAI has developed a model approximating Artificial General Intelligence (AGI) — capable of surpassing human-like intelligence with the ability to self-teach. And then there’s the employee question: many companies are already laying off staff in favour of AI-based replacements, and this trend could be set to continue. With some disquiet not just at Nvidia, but other popular shares including Super Micro Computer, Palantir, ARM and AMD, it remains to be seen whether this is the end of the bubble or simply some profit taking before a sustained move higher. As ever, while there may be significant growth opportunities, there are also risks. Past performance is not an indicator of future returns. Best AI stocks to watch There is some disagreement on what constitutes an AI stock — and whether it must be the main focus of a company or simply be a significant growth area. Here we have listed the top AI stocks in the US based on companies where AI is a growth area and ordered by market capitalisation. Microsoft Apple Nvidia Amazon Meta Platforms Microsoft Microsoft remains the original global computing power, so it makes sense that the US behemoth tops the list of the best AI stocks to watch — and is now the most valuable company in the world. The business retains a close relationship with OpenAI prior to the famous ChatGPT launch and has invested billions into the company since 2019. In Q2 results, revenue increased by 18% year-over-year to $62 billion, while net income rose by 33% to $21.9 billion. CEO Satya Nadella enthused that ‘we’ve moved from talking about AI to applying AI at scale. By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.’ In upcoming earnings, two metrics will be closely watched: revenue derived from Azure and related services — which rose by 30% in Q2, including 6% from AI — and revenue from the company’s Microsoft 365 Copilot AI tool, as Q3 will be the first full quarter of sales. Arguably, the two are key bellwethers for AI sentiment. Market Capitalisation: $3.03 trillion Apple Apple is in the middle of a market struggle — independent research firm Counterpoint estimates that iPhone sales in key market China fell by 19% in the March quarter — the worst performance since covid-19 struck in 2020. But in Q1 results, Apple saw revenue rise by 2% year-over-year to $119.6 billion, while quarterly earnings per diluted share increased by 16% to $2.18. CEO Tim Cook noted the company’s ‘all-time revenue record in Services’ and also enthused that the company’s ‘installed base of active devices has now surpassed 2.2 billion, reaching an all-time high across all products and geographic segments.’ The focus of upcoming results may be on new product launches, including new iPads on 7 May and iOS 18, which is rumoured to host artificial intelligence capacity entirely offline on customer iPhones. Market Capitalisation: $2.58 trillion Nvidia Nvidia is arguably the prime beneficiary of the AI boom, with a wide economic moat as the ‘picks and shovels’ stock for the artificial intelligence age. In Q4 2024 results, the company saw revenue rise by 265% year-over-year and 22% quarter-on-quarter to a record $22.1 billion, driven by Data Centre revenue which increased by 409% in the year to $18.4 billion. CEO and founder Jensen Huang enthuses that ‘Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations… NVIDIA RTX, introduced less than six years ago, is now a massive PC platform for generative AI, enjoyed by 100 million gamers and creators.’ However, clouds may be gathering on the horizon. The 10% one-day drop mentioned above was potentially caused by Super Micro Computers failing to preannounce positive Q3 results as it had last quarter — the business is deeply tied to Nvidia as it makes the titan’s servers. Market Capitalisation: $2.06 trillion Amazon Amazon is well-known as the largest e-commerce retailer in the world, but the company is also a growing operator in the AI space. It offers several cutting-edge AI tools within its AWS business, including Code Whisperer and SageMaker — and clients can customise Amazon’s own machine learning model. Of course, competitors have their owns services, but Amazon is by far the largest cloud computing company, with circa a third of the global market share. Total Q4 net sales increased by 14% year-over-year to $170 billion. Within its e-commerce offering, Amazon uses AI to identify consumer trends, manage inventory and also make personalised product recommendations — including targeted advertising. Then there’s the smart devices, including Alexa and the Fire tablets. CEO Andy Jassy enthuses that the AI opportunity will be ‘tens of billions of dollars of revenue for AWS over the next several years.’ Positively, Bank of America analysts consider that next week’s earnings will see Amazon Web Services and its advertising segment come in on the upside of Wall Street guidance. Market Capitalisation: $1.87 trillion Meta Platforms Meta Platforms now boasts monthly active users of 3.98 billion people across its ‘family’ of apps, comprising Facebook, Instagram, threads and WhatsApp — an increase of 6% compared to Q4 2023. 2023 full-year results saw ad impressions across the family rise by 28% year-over-year, while the average price per advert dropped by 9%. Accordingly, revenue rose by 1% to $134.9 billion. CEO Mark Zuckerberg enthuses that ‘our community and business continue to grow. We've made a lot of progress on our vision for advancing AI and the metaverse.’ A common theme among analysts for 2024 is that the company needs a new catalyst to sustain further gains. But the next catalyst could well come externally — with US politicians considering a ban on competitor TikTok unless parent ByteDance sells the app to a non-Chinese company. Market capitalisation: $1.26 trillion This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Microsoft, Apple, Nvidia, Amazon and Meta could be the best AI stocks to watch next month. These stocks are the largest AI stocks in the US based on market capitalisation. Source: Bloomberg 2023 was inarguably the year of AI — as the big NASDAQ tech stocks experienced huge surges in market capitalisation — backed by hopes that artificial intelligence progress, in particular in generative AI, could displace current models of working. These so-called ‘magnificent seven’ have driven much of the gains in the US market, with market darling Nvidia rising to $950 per share in March. However, the company has since corrected to $824, recently suffering a 10% one-day fall as investors weigh up the relative risks and rewards. AI in 2024 While AI is undoubtedly filtering into ever more aspects of daily life and work environments, new tech has a history of inspiring market bubbles which pop before the winners go on to generate sustainable growth. This was arguably the case with the dot-com crash — and while no two scenarios are exactly the same, history does tend to rhyme. On the other hand, the AI advances of the last 18 months have been extraordinary — with artificially generated text, imagery and video available to the masses on a scale never before seen. There are even rumours that OpenAI has developed a model approximating Artificial General Intelligence (AGI) — capable of surpassing human-like intelligence with the ability to self-teach. And then there’s the employee question: many companies are already laying off staff in favour of AI-based replacements, and this trend could be set to continue. With some disquiet not just at Nvidia, but other popular shares including Super Micro Computer, Palantir, ARM and AMD, it remains to be seen whether this is the end of the bubble or simply some profit taking before a sustained move higher. As ever, while there may be significant growth opportunities, there are also risks. Past performance is not an indicator of future returns. Best AI stocks to watch There is some disagreement on what constitutes an AI stock — and whether it must be the main focus of a company or simply be a significant growth area. Here we have listed the top AI stocks in the US based on companies where AI is a growth area and ordered by market capitalisation. Microsoft Apple Nvidia Amazon Meta Platforms Microsoft Microsoft remains the original global computing power, so it makes sense that the US behemoth tops the list of the best AI stocks to watch — and is now the most valuable company in the world. The business retains a close relationship with OpenAI prior to the famous ChatGPT launch and has invested billions into the company since 2019. In Q2 results, revenue increased by 18% year-over-year to $62 billion, while net income rose by 33% to $21.9 billion. CEO Satya Nadella enthused that ‘we’ve moved from talking about AI to applying AI at scale. By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.’ In upcoming earnings, two metrics will be closely watched: revenue derived from Azure and related services — which rose by 30% in Q2, including 6% from AI — and revenue from the company’s Microsoft 365 Copilot AI tool, as Q3 will be the first full quarter of sales. Arguably, the two are key bellwethers for AI sentiment. Market Capitalisation: $3.03 trillion Apple Apple is in the middle of a market struggle — independent research firm Counterpoint estimates that iPhone sales in key market China fell by 19% in the March quarter — the worst performance since covid-19 struck in 2020. But in Q1 results, Apple saw revenue rise by 2% year-over-year to $119.6 billion, while quarterly earnings per diluted share increased by 16% to $2.18. CEO Tim Cook noted the company’s ‘all-time revenue record in Services’ and also enthused that the company’s ‘installed base of active devices has now surpassed 2.2 billion, reaching an all-time high across all products and geographic segments.’ The focus of upcoming results may be on new product launches, including new iPads on 7 May and iOS 18, which is rumoured to host artificial intelligence capacity entirely offline on customer iPhones. Market Capitalisation: $2.58 trillion Nvidia Nvidia is arguably the prime beneficiary of the AI boom, with a wide economic moat as the ‘picks and shovels’ stock for the artificial intelligence age. In Q4 2024 results, the company saw revenue rise by 265% year-over-year and 22% quarter-on-quarter to a record $22.1 billion, driven by Data Centre revenue which increased by 409% in the year to $18.4 billion. CEO and founder Jensen Huang enthuses that ‘Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations… NVIDIA RTX, introduced less than six years ago, is now a massive PC platform for generative AI, enjoyed by 100 million gamers and creators.’ However, clouds may be gathering on the horizon. The 10% one-day drop mentioned above was potentially caused by Super Micro Computers failing to preannounce positive Q3 results as it had last quarter — the business is deeply tied to Nvidia as it makes the titan’s servers. Market Capitalisation: $2.06 trillion Amazon Amazon is well-known as the largest e-commerce retailer in the world, but the company is also a growing operator in the AI space. It offers several cutting-edge AI tools within its AWS business, including Code Whisperer and SageMaker — and clients can customise Amazon’s own machine learning model. Of course, competitors have their owns services, but Amazon is by far the largest cloud computing company, with circa a third of the global market share. Total Q4 net sales increased by 14% year-over-year to $170 billion. Within its e-commerce offering, Amazon uses AI to identify consumer trends, manage inventory and also make personalised product recommendations — including targeted advertising. Then there’s the smart devices, including Alexa and the Fire tablets. CEO Andy Jassy enthuses that the AI opportunity will be ‘tens of billions of dollars of revenue for AWS over the next several years.’ Positively, Bank of America analysts consider that next week’s earnings will see Amazon Web Services and its advertising segment come in on the upside of Wall Street guidance. Market Capitalisation: $1.87 trillion Meta Platforms Meta Platforms now boasts monthly active users of 3.98 billion people across its ‘family’ of apps, comprising Facebook, Instagram, threads and WhatsApp — an increase of 6% compared to Q4 2023. 2023 full-year results saw ad impressions across the family rise by 28% year-over-year, while the average price per advert dropped by 9%. Accordingly, revenue rose by 1% to $134.9 billion. CEO Mark Zuckerberg enthuses that ‘our community and business continue to grow. We've made a lot of progress on our vision for advancing AI and the metaverse.’ A common theme among analysts for 2024 is that the company needs a new catalyst to sustain further gains. But the next catalyst could well come externally — with US politicians considering a ban on competitor TikTok unless parent ByteDance sells the app to a non-Chinese company. Market capitalisation: $1.26 trillion This information has been prepared by IG, a trading name of IG Markets Limited. 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Meta’s share price plunged as much as 16% in post-market trading, following the release of its 1Q 2024 results. Source: Getty Shares Price Share price Meta Platforms Revenue Artificial intelligence Written by: Yeap Jun Rong | Market Strategist, Singapore Publication date: Thursday 25 April 2024 03:51 Meta’s share price plunged post-results Meta’s share price plunged as much as 16% in post-market trading, following the release of its 1Q 2024 results. If this is followed through in the US session, this will be the largest percentage drop for the company’s share price since October 2022 (-24.6%). Meta’s results have a negative knock-on impact on the share prices of other big tech as well. Alphabet and Amazon are down close to 3% after-market, while Microsoft and Nvidia are down close to 2%. Source: Refinitiv Meta had a stellar 1Q, with a beat in both top and bottom-line. Revenue was 1% higher than consensus at $36.46 billion, up 27% year-on-year. This is the highest year-on-year (YoY) growth since 3Q 2021. Earnings per share (EPS) has beaten expectations by 9.8%, coming in at $4.71 and up more than two-fold from the $2.20 a year ago. Net profit margin was above estimate too, coming in at 33.9% versus the 31.1% consensus. Its other operating metrics have been encouraging as well. Average price per ad increased 6% YoY, ad impressions were up 20% YoY, while family daily active people (DAP) increased 7% YoY. Lacklustre revenue guidance overshadows stellar 1Q 2024 performance With the 40% run-up in its share price year-to-date, expectations are in place for the company to outperform on all fronts, leaving little room for error. It seems hard to find fault with the current set of results, but market participants were expecting more from Meta in terms of its forward sales outlook. The company guided for 2Q 2024 total revenue to be in the range of $36.5-39 billion, with the midpoint of the revenue outlook ($37.8 billion) falling below the $38.3 billion market consensus. There may be some concerns as to whether we have already seen the peak in growth momentum, with year-on-year revenue growth to potentially fall to 18.1% in 2Q 2024 from the current 27.3%. Huge cost increases put market participants off as well Given the ongoing artificial intelligence (AI) race among the big tech, Meta has been under pressure to keep up on its AI capabilities in order to fend off competition as well. The company is anticipating a $5 billion cost increase from its AI infrastructure investments for 2024 and expects capital expenditures to continue to increase next year. "We anticipate our full-year 2024 capital expenditures will be in the range of $35-40 billion, increased from our prior range of $30-37 billion." This will be a new record high for the company’s capital expenditure, but there may be some reservations on whether the huge amount will pay off. Having invested heavily in the metaverse since the end of 2020, its metaverse-oriented Reality Labs division is still faced with growing losses ($3.85 billion operating loss in 1Q 2024). This may lead to questions on whether it will be another expensive long-term bet this time round. Technical analysis: Meta’s share price unwind all of its past two months’ gains pre-market Failure to meet the sky-high market expectations for its results has prompted a 16% plunge in its share price pre-market, effectively unwinding all of its gains over the past two months. As such, an attempt for its daily relative strength index (RSI) to revert back above its key 50 level has also failed to materialise, which may keep the trend on a downward bias in the near term. The hefty fall also marked a dip in share price below its daily Ichimoku Cloud support for the first time since October 2023. There may be some expectations on whether the 16% plunge is overdone, given a stellar set of 1Q 2024 numbers, which may potentially catch the attention of some dip buyers. Buyers will have to face the arduous task of potentially pushing above the US$436.00 level (the lower band of the Ichimoku Cloud) to signal some control. Immediate support may be found at the key US$400.00 level, with any failure to hold the line potentially paving the way for a retest of the US$360.00 level next. Source: IG charts This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Facebook owner Meta Platforms saw its shares down heavily in extended trade after revenue forecasts disappointed. Some analysts are also now questioning the staggering amounts of money Meta is investing in artificial intelligence. Written by: Jeremy Naylor | Analyst, London Publication date: Thursday 25 April 2024 10:28 Earnings per share came in at $4.71, comfortably above estimates of $4.32 and revenues up 27% year-on-year, at $36.46bln, above the forecasts of $36.16bln. That was the fastest rate of revenue expansion for any quarter since 2021. However, shares have quite clearly been priced for perfection as the outlook, however strong it is, quite clearly disappointed the market. Q2 revenue is expected at $36.5 to $39bln with the midpoint at $37.75bln, which would represent 18% year-over-year growth, but below analysts' average estimates of $38.3bln. However, the company is also expected to invest between $30-37bln into AI, possibly as much as $40bln, which some said was too much given current engagement. (AI Video Summary) Meta Meta Platforms, the parent company of Facebook, experienced a significant stock drop post-market following its quarterly earnings report, despite beating earnings expectations with a share price of $4.71 against a forecast of $4.32, and posting revenues of $36.46 billion. Meta's aggressive investment in AI technology This drop was attributed to concerns over its aggressive investment in AI technology, with spending on AI expected to be between $30 to $40 billion. Despite initial investor trepidation, there's notable buying interest in the stock at the lower prices, with 87% of clients holding long positions. The heavy investment in AI technology continues to spark debate among investors regarding the company’s future direction. This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.