OpenAI strikes record US$38 billion cloud deal with Amazon, boosting AWS in AI compute race

South Africa

The JSE Top 40 slipped 0.18% to 101,749.2 points, while the All Share index declined 0.15% to 109,080.9 points as weaker manufacturing sentiment and subdued export demand weighed on local markets. The Absa manufacturing PMI fell to 49.2 in October, indicating renewed contraction, with business activity and future expectations declining further. Bank of America expects Standard & Poor’s may upgrade South Africa’s rating to BB amid improving reform progress and stabilising growth under the unity government. Meanwhile, President Ramaphosa’s G20 taskforce urged global action on inequality, warning of its economic and democratic risks.

Europe

European equities were broadly steady, with the STOXX 600 rising 0.1% to 572.28 points as investors digested mixed earnings and manufacturing data. Germany’s DAX gained 0.7%, supported by auto stocks including Renault, Mercedes-Benz, and Volkswagen, which rose over 2% amid expectations that Nexperia’s China operations would resume shipments. The UK manufacturing PMI improved to 49.7 on a rebound in vehicle production at Jaguar Land Rover, while France’s PMI edged up to 48.8, signalling modest improvement but continued weakness. French vehicle sales rose 2.9% in October, though Tesla’s remain 30% lower year-to-date, reflecting sector-wide demand softness.

United States

Wall Street ended mixed, with the S&P 500 up 0.17% and Nasdaq 0.46% higher as AI-driven gains offset monetary policy uncertainty. Amazon rose 4% after announcing a US$38 billion AI cloud deal with OpenAI, while Nvidia climbed 2.2% following chip export restrictions to China. The Dow fell 0.48% amid healthcare sector weakness. The government shutdown continued to limit economic data, clouding the Fed’s policy outlook as officials issued mixed views on future rate cuts. Corporate earnings remained supportive, with 83% of S&P 500 firms exceeding expectations, maintaining optimism despite uneven trading activity.

Asia

Asian markets were mixed as investors awaited fresh catalysts following modest Wall Street gains. South Korea’s October inflation quickened to 2.4%, the fastest in over a year, tempering prospects for near-term rate cuts amid rising property prices. The Bank of Korea kept rates unchanged for a third month but signalled flexibility for future easing. In China, Vice Premier He Lifeng called for deeper Hong Kong–mainland financial cooperation to bolster the city’s global financial hub role, addressing the Global Financial Leaders’ Investment Summit hosted by the Hong Kong Monetary Authority.

Currencies

The rand was broadly unchanged after weak October PMI data and modest vehicle sales underscored sluggish domestic activity. Globally, the dollar hovered near a three-month high as investors pared back rate-cut expectations following mixed Fed commentary. The yen softened to ¥154.38 per dollar, fuelling speculation of Japanese intervention. The euro eased 0.11% to $1.1506 and sterling dipped 0.13% to $1.312. The dollar index firmed to 99.99, supported by safe-haven demand and shifting rate expectations as markets reassess the likelihood of another Fed cut in December.

Commodities

Oil prices were steady as markets weighed OPEC+’s decision to pause production hikes in Q1 2026 after a small December increase. While oversupply fears persist, major producers argued demand projections remain too conservative. Brent crude held near recent levels, supported by Russia’s call for stability amid sanctions constraining exports. Gold hovered around US$4,000 per ounce ahead of U.S. payroll data that may shape Fed expectations. Russian LNG exports hit record highs in October, up 21% month-on-month, driven by Arctic LNG 2 production, with China continuing to absorb sanctioned cargoes amid deepening energy ties.

Oceana Group Limited (OCE) +0.86%

Oceana Group issued a further trading statement for the year ended 30 September 2025, ahead of results due on 24 November. The company now expects full-year earnings to decline less sharply than previously guided, following stronger-than-expected catches in its Wild Caught seafood segment during late September. Basic earnings per share are projected between 589 and 534 cents, while headline earnings per share are anticipated between 587 and 532 cents—representing a year-on-year decrease of 36% to 42% from 920.9 cents and 917.6 cents respectively. Despite the improvement, performance remains constrained by softer pricing, input cost pressures, and operational challenges earlier in the year. The financial information remains unaudited ahead of final release.

Pepkor Holdings Limited (PPH) +3.45%

Pepkor reported strong trading for the year ended 30 September 2025, with group revenue rising 12% to R95.3 billion as its value-driven retail model outperformed competitors in a subdued consumer environment. Market share gains were recorded across key categories, while the Fintech segment surged 31.1% to R16.6 billion, driven by mobile and financial services expansion. Clothing & general merchandise grew 8.9% to R66.9 billion, and furniture, appliances & electronics rose 7.2% to R11.8 billion. Headline earnings per share are expected to increase 10–20% to between 153.6 and 167.6 cents, while EPS is projected to surge 136–146% to 149.6–156.0 cents, rebounding from prior impairments. Results are due on 25 November 2025, with guidance reflecting Pepkor’s operational resilience and strategic execution.

Altron Limited (AEL) -8.48%

Altron reported resilient interim results for the six months ended 31 August 2025 (H1 FY26), reflecting disciplined execution and improved profitability despite softer revenue. Continuing operations revenue declined 1% to R4.8 billion, while group revenue fell 4% to R4.9 billion. EBITDA from continuing operations rose 4% to R938 million, and operating profit increased 15% to R549 million, aided by revised depreciation at Netstar. Headline earnings per share climbed 22% to 96 cents, while EPS rose 12% to 84 cents, though group EPS declined 6% to 66 cents due to Altron Nexus losses. The interim dividend was raised 20% to 48 cents, signalling confidence in cash generation and balance-sheet strength amid ongoing optimisation of the Group’s technology portfolio.

Redefine Properties Limited (RDF) +4.63%

Redefine Properties delivered stable results for the year ended 31 August 2025, reflecting solid operational performance and disciplined capital management in a challenging property market. Total property assets reached R103.2 billion, while the SA REIT net asset value per share improved to 816.45 cents. The group maintained a prudent loan-to-value ratio of 40.6% and reported a strong net operating margin of 76.2%, underscoring efficient portfolio management and cost discipline. A full-year dividend of 45.84 cents per share was declared, supported by R6.7 billion in undrawn facilities and cash, ensuring financial flexibility. Looking ahead, Redefine is positioned to sustain value through selective asset optimisation, enhanced balance-sheet resilience, and ongoing focus on earnings stability amid evolving macroeconomic conditions.

Palantir Technologies Inc. (PLTR) +3.35%

Palantir forecast fourth-quarter revenue of $1.327–$1.331 billion, well above the $1.19 billion consensus, driven by accelerating demand for its AI-driven analytics platforms across commercial and government clients. The company raised full-year guidance to $4.396–$4.40 billion from $4.142–$4.15 billion, underpinned by robust adoption of its enterprise and defence solutions. Third-quarter revenue rose 63% to $1.18 billion, exceeding expectations, while adjusted EPS of $0.21 topped forecasts of $0.17. Shares, which have more than doubled in 2025, trade at an elevated 12-month forward P/E of 246x, heightening valuation concerns despite continued operational momentum. Partnerships with Nvidia and expanded U.S. Army deployment of its Vantage platform reinforce Palantir’s strategic position in AI-enhanced decision intelligence and defence technology.

OpenAI (Not Listed)

OpenAI has signed a landmark seven-year, US$38 billion agreement with Amazon Web Services (AWS) to secure vast cloud and GPU capacity, marking its largest infrastructure deal to date. The partnership grants OpenAI access to hundreds of thousands of Nvidia GB200 and GB300 chips to train and deploy advanced AI models, strengthening AWS’s position in the AI compute race against Microsoft and Google. Amazon shares surged 5% to record highs, adding nearly US$140 billion in market value. The deal follows OpenAI’s restructuring, which loosened Microsoft’s exclusive supply rights and enables broader partnerships. OpenAI plans to invest up to US$1.4 trillion to build 30 gigawatts of computing power, underscoring both the scale and risk of capital intensity underpinning the current AI boom.

Davide Campari-Milano N.V. (CPR) -2.42%

Campari shares fell as much as 5% after Italian tax authorities seized €1.29 billion worth of shares—around 17% of its equity—held by controlling shareholder Lagfin, amid allegations of €5.3 billion in undeclared capital gains linked to its 2019 transfer to Luxembourg. Lagfin, owned by the Garavoglia family, denied wrongdoing and stated the precautionary seizure would not affect its control, as it retains over 80% of voting rights. Campari, valued at roughly €7.45 billion, is not directly involved in the probe, though analysts warn a forced share sale to cover potential liabilities could weigh on the stock. Historical precedent suggests settlements could reduce payments to 25–40% of the claimed amount, while Chairman Luca Garavoglia is among those under investigation.

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