2025-01-29 22:58
IBM shares rise as much as 10% after Q4 profit beat Software segment records biggest growth in 5 years AI book adds $2 billion from Q3, stands at $5 billion inception-to-date Jan 29 (Reuters) - IBM (IBM.N) , opens new tab surpassed fourth-quarter profit estimates on Wednesday, driven by robust demand in its software unit as businesses ramped up IT spending, sending the company's shares soaring about 10% in extended trading. The software segment recorded its biggest revenue jump in five years, as customers prioritized spending on cloud infrastructure amid a rush to adopt the data-intensive generative artificial intelligence technology. "When you see more growth come from software, that comes with a lot better margins," said Matt Swanson, analyst at RBC Capital Markets. IBM also forecast revenue growth of at least 5% at constant currency for fiscal 2025, higher than the 3% increase seen in 2024. This suggests "confidence in (IBM's) AI and cloud strategy", said Michael Schulman, chief investment officer of Running Point Capital. IBM's AI Book of Business — a combination of bookings and actual sales across various products — stood at more than $5 billion inception-to-date, up about $2 billion from the third quarter. The company made its "Granite" family of AI models open-source in May, in contrast to rivals such as Microsoft (MSFT.O) , opens new tab, which charge for access to their models. IBM's approach is in line with Chinese startup DeepSeek, which last week launched a free AI assistant that it said uses less data at a fraction of the cost of incumbent services, fueling concerns over the dominance of U.S. tech. "DeepSeek was an initiation that open (source) AI can play a role in the overall GenAI space," IBM Chief Financial Officer James Kavanaugh told Reuters in an interview. He, however, declined to provide details on whether IBM plans to offer DeepSeek's models on its Watsonx platform, which helps users in tasks such as deploying chatbots. CONSULTING WEAKNESS IBM's AI book is dominated by its consulting business, which accounts for about 80% of it. Software forms the rest. But revenue from the consulting segment fell about 2% to $5.2 billion in the quarter. Software sales grew more than 10%. Companies have focused spending on longer-term consulting deals, centered around integrating AI in their businesses, which is yet to be reflected in IBM's revenue. Total revenue was relatively flat at $17.55 billion for the quarter and largely in line with analysts' estimates, according to data compiled by LSEG. IBM's fourth-quarter adjusted per-share earnings of $3.92 compared with estimates of $3.75. Sign up here. https://www.reuters.com/technology/ibm-beats-profit-estimates-software-business-surges-ai-shift-2025-01-29/
2025-01-29 22:49
SAO PAULO, Jan 29 (Reuters) - Brazilian state-run oil firm Petrobras (PETR4.SA) , opens new tab said on Wednesday that its estimated proven reserves of oil, condensate and natural gas rose to 11.4 billion barrels of oil equivalent (boe) last year from 10.9 billion in 2023. Petrobras said 85% of the estimated reserves are of oil and condensate, while the remaining 15% are natural gas. The reserves estimate was determined in line with guidelines set by the U.S. Securities and Exchange Commission. Petrobras added 1.3 billion boe to its reserves last year, offseting a production of 900 million boe. The firm said the boost in total reserves came mainly due to the continued development of its Atapu and Sepia fields and to good performance of assets including the Buzios, Itapu, Tupi and Sepia fields. Sign up here. https://www.reuters.com/business/energy/petrobras-oil-gas-reserves-rose-114-billion-boe-2024-2025-01-29/
2025-01-29 22:39
Jan 29 (Reuters) - U.S. President Donald Trump's administration is considering tightening restrictions on artificial intelligence leader Nvidia's (NVDA.O) , opens new tab sales of its H20 chips designed for the China market, three people familiar with the matter said. Conversations to restrict shipments of those chips to China are in very early stages among Trump officials, the people said, adding the idea has been under consideration since Democratic former President Joe Biden's administration. H20 chips can be used to run AI software and were designed to comply with existing U.S. curbs on shipments to China, spearheaded by Biden. The White House did not respond to requests for comment. Nvidia said in a statement it is "ready to work with the administration as it pursues its own approach to AI." Nvidia shares, which were already down for the day, added slightly to losses after the news, first reported by Bloomberg. Worries are mounting that China is catching up to the U.S. in AI development after China's DeepSeek last week launched a free assistant it says uses less data at a fraction of the cost of incumbent players' models, possibly marking a turning point in the level of investment needed for AI. "This topic has been discussed for more than half a year," among high-level officials, said Lennart Heim, a researcher at RAND, saying it was a recommendation made during the Biden administration as well. "DeepSeek highlights it," he added. Biden, who left office this month, put in place a raft of restrictions barring exports of AI chips to China and capping their shipment to a host of other countries. However, some AI chips, including Nvidia's H20 can still be lawfully shipped to China. Sign up here. https://www.reuters.com/technology/artificial-intelligence/trump-officials-discussing-tightening-curbs-nvidias-china-sales-bloomberg-2025-01-29/
2025-01-29 22:37
Jan 30 (Reuters) - A look at the day ahead in Asian markets. Sagging tech stocks weighed on US indexes, as Wall Street rethinks AI leadership after the arrival of DeepSeek, a Chinese disruptor claiming big results at a smaller cost. With many Asian markets still closed for the Lunar New Year, Japan's Nikkei 225 (.N225) , opens new tab will carry the baton after pretty much cueing off Wall Street's ups and downs all week. The S&P 500 (.SPX) , opens new tab and Nasdaq (.IXIC) , opens new tab briefly extended losses after the Federal Open Market Committee closed out its two-day policy meeting with hawkish hold that left markets thinking rates might not come down again for a while, if at all. After the market closed, earnings reports for three of the Magnificent 7 stocks that spearheaded the bull market did not shed much light. Microsoft (MSFT.O) , opens new tab shares initially fell more than 3% in aftermarket trade, Tesla (TSLA.O) , opens new tab fell then bounced and Meta (META.O) , opens new tab dipped 1.3%. Apple (AAPL.O) , opens new tab, another Mag 7, reports late Thursday. Early slippage in Apple and a 4.5% drop in AI-chip leader Nvidia (NVDA.O) , opens new tab helped nudge the S&P 500 down 0.46% and the tech-heavy Nasdaq down 0.51%. Microsoft closed off 1%, Meta up 0.3% and Tesla down 2.25%. Nvidia has seesawed all week, recovering almost 9% on Tuesday from a historic hammering on Monday after China's DeepSeek said its AI models were cost-effective and ran on less advanced chips compared to OpenAI. The Federal Reserve was widely expected to leave rates where they were, based on the signals out of the December meeting, where policymakers lowered the fed funds target range 25 basis points to 4.25%-4.50% for a total reduction of 100 basis points since September. Wednesday's unanimous decision to keep the overnight interest rate at 4.25%-4.50%, coupled with language that dropped a reference to inflation making progress toward the Fed's 2% goal, puts the central bank in a holding pattern as officials await further inflation and jobs data, and clarity on the impact of President Donald Trump's policies. The hold was no surprise since officials agreed at the December FOMC that they were "at or near the point at which it would be appropriate to slow the pace of policy easing," according to minutes of the session. After flatlining all morning, Treasury yields popped, while the dollar mainly held steady, after the 2 p.m. ET/1900 GMT announcement, which was the first central bank decision since President Donald Trump took office. Fed Chair Jerome Powell said in the post-meeting news conference that it is too soon to say what President Donald Trump's policies will do and the central bank will take its time assessing what the new government policy regime means. "We don’t know what will happen with tariffs, with immigration, with fiscal policy and with regulatory policy," Powell said. Here are key developments that could provide more direction to markets on Thursday: - Australia trade balance (Dec) - US GDP (Q4 Advance) - Apple earnings (after market close) Sign up here. https://www.reuters.com/markets/asia/global-markets-view-asia-2025-01-29/
2025-01-29 21:57
Tech leads day's decline; Nvidia down 4.1% Fed holds interest rates steady Indexes: Dow down 0.3%, S&P 500 down 0.5%; Nasdaq down 0.5% NEW YORK, Jan 29 (Reuters) - U.S. stocks ended lower on Wednesday, but off their lows of the day, with the Federal Reserve holding interest rates steady as expected and Fed Chair Jerome Powell offering soothing comments for investors. Technology (.SPLRCT) , opens new tab shares were the biggest drag on the S&P 500. Nvidia (NVDA.O) , opens new tab shares fell 4.1% and Microsoft (MSFT.O) , opens new tab finished 1.1% lower on Wednesday, two days after a tech selloff sparked by Chinese startup DeepSeek's launch of AI models it said were cost-effective and ran on less advanced chips compared to U.S.-based OpenAI. Stocks initially extended losses after the Fed statement, with the Nasdaq at one point down more than 1% in afternoon trading. The U.S. central bank dropped language saying inflation "has made progress" towards the Fed's 2% inflation goal, noting only the pace of price increases "remains elevated." Its decision to hold the policy rate steady was widely anticipated following three consecutive rate cuts in 2024 that reduced the Fed's benchmark rate by a full percentage point. Indexes pared losses as Powell began to speak at a press conference following the release of the policy statement. He said, "we do not need to be in a hurry to adjust our policy stance" and monetary policy is "well positioned" for the challenges at hand. "Powell does a great job of calming markets," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma, adding that "a strong economy gives the Fed plenty of wiggle room." The Dow Jones Industrial Average (.DJI) , opens new tab fell 136.83 points, or 0.31%, to 44,713.52, the S&P 500 (.SPX) , opens new tab lost 28.39 points, or 0.47%, to 6,039.31 and the Nasdaq Composite (.IXIC) , opens new tab lost 101.26 points, or 0.51%, to 19,632.32. "The Fed didn't hit the markets with any surprises," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. Powell also said it is too soon to say what President Donald Trump's policies will do and the central bank will take its time assessing what the new government policy regime means. Investors have been worried about Trump's proposed tariffs, which could exacerbate inflationary pressures and slow the pace of rate cuts. The Fed gave little insight into when further reductions in borrowing costs may take place. Traders are pricing in around 44 basis points of cuts by year-end, down from around 48 basis points before the Fed statement. That reflects falling confidence that the U.S. central bank will make two 25 basis point rate reductions this year. The December reading of the personal consumption expenditures price index, a crucial metric in assessing the inflation trajectory, is due on Friday. After the closing bell, Microsoft reported slower-than-expected growth in its crucial Azure cloud business despite beating estimates for overall quarterly revenue. Its shares were down 1.5% in after-hours trading. During the regular session, shares of cloud services company F5 (FFIV.O) , opens new tab jumped 11.4% after it forecast second-quarter revenue above estimates and reported a first-quarter revenue beat. Declining issues outnumbered advancers by a 1.6-to-1 ratio on the NYSE. There were 151 new highs and 68 new lows on the NYSE. On the Nasdaq, 1,829 stocks rose and 2,548 fell as declining issues outnumbered advancers by a 1.39-to-1 ratio. Volume on U.S. exchanges was 13.00 billion shares, compared with the 15.5 billion average for the full session over the last 20 trading days. Sign up here. https://www.reuters.com/markets/us/nasdaq-futures-up-chip-stocks-rise-ahead-fed-decision-2025-01-29/
2025-01-29 21:53
Jan 29 (Reuters) - Middle-aged adults who need an aortic valve replacement fare better with mechanical devices than with the valves made from animal tissues that they currently most often receive, U.S. researchers reported at the Society for Thoracic Surgery , opens new tab annual meeting in Los Angeles. The researchers reviewed data on nearly 110,000 patients who underwent surgical replacement of aortic valves between the ages of 40 and 79. They found that in those aged 60 or younger, mechanical valves were independently associated with a lower risk of death from any cause over the next 12 years, compared with bioprosthetic devices from animals such as pigs or cows. “The decision between a bioprosthetic and mechanical valve is one of the most consequential for patients requiring aortic valve replacement,” study leader Dr. Michael Bowdish of Cedars-Sinai Medical Center in Los Angeles said in a statement. “Our research underscores that for patients with an age threshold of 60 years, mechanical valves confer a significant survival advantage. This data will help patients and providers make more informed choices about their care.” Despite superior outcomes in younger populations, mechanical valve use decreased from 20% to 10% in the age group over the study's 12-year period, the researchers also found. Overall, only about 14% of the patients in the current study received mechanical valves. Implantation of mechanical valves also requires lifelong use of drugs to prevent blood clots. “The favorable survival data demonstrated in the current study may provide a basis for a clinical reconsideration of these valves” in patients aged 60 or younger, the researchers wrote in a report published in the Journal of the American College of Cardiology , opens new tab. Cannabis may slow young adults' brain function Cannabis use can adversely impact brain function in young adults, according to a new study that used imaging technology to track brain activity during cognitive tasks. The study involved 1,003 volunteers ages 22 to 37, including 88 who reported more than 1,000 uses of the drug and were categorized as heavy users, 179 moderate users, and 736 nonusers. During tasks testing working memory, 63% of heavy lifetime cannabis users exhibited reduced brain activity and cognitive performance, compared to what was observed in nonusers, according to a report published on Tuesday in JAMA Network Open , opens new tab. Reduced working memory performance was also seen in recent cannabis users, the researchers said. Working memory involves using recently-acquired information to follow instructions or to mentally visualize and manipulate information, like solving a math problem. Heavy cannabis use also appeared to reduce activity in regions of the brain that are involved in decision-making, memory, attention and emotional processing. Abstaining from using cannabis before doing a cognitive task could help to improve performance, the researchers suggested, although heavy users may need to be more cautious because stopping cold turkey could disrupt their cognition as well. “There are a lot of questions we still need answers to regarding how cannabis impacts the brain,” study leader Joshua Gowin of University of Colorado Anschutz Medical Campus said in a statement. “Large, long-term studies are needed next to understand whether cannabis use directly changes brain function, how long these effects last and the impact on different age groups.” (This is an excerpt of the Health Rounds newsletter, where we present latest medical studies on Tuesdays and Thursdays. To receive the full newsletter in your inbox for free sign up here , opens new tab) Sign up here. https://www.reuters.com/business/healthcare-pharmaceuticals/health-rounds-mechanical-aortic-valves-may-be-preferable-younger-patients-2025-01-29/
