Salesforce shares drop over ~5% in after-hours trading on weak AI outlook despite $20bn buyback expansion

South Africa
The Top 40 index added 0.53% yesterday to reach 94,190.9 points, while the All Share index gained 0.34% to close at 101,514.9 points. South African business confidence fell to a one-year low, with the RMB/BER index dropping to 39 in Q2 2025, reflecting weak sentiment amid new US tariffs. Automotive sector disruptions added to the downturn. Anglo American confirmed its full exit from platinum by selling its remaining 19.9% stake in Valterra Platinum. Meanwhile, Shoprite's Sixty60 delivery platform surged with R18.9 billion in annual sales, up 48%. Major power consumers, including the EIUG, criticized energy regulator Nersa over a R54 billion tariff error, calling for a review of Eskom’s pricing for the next two fiscal years.

Europe
European markets rebounded Wednesday, with the STOXX 600 rising 0.65%, led by healthcare stocks like Roche and AstraZeneca. Investors stabilized after a bond selloff triggered risk-off sentiment. A private survey showed slow eurozone growth, as services lagged while manufacturing improved. In Germany, services activity contracted again, and Lufthansa slipped 0.4% after pilot strike threats. Longer-dated bond selloffs continued to weigh on insurance portfolios, dragging the sector down 0.5% for the day and 2.5% for the week. Political tensions and inflationary pressures remain key risks for European equities moving forward.

United States
U.S. stocks rose Wednesday, with the Nasdaq up 1%, driven by Alphabet’s 9.1% rally after a judge blocked efforts to break up Google. Investors welcomed signals the Federal Reserve might cut rates soon. Apple also supported gains, while Macy’s surged 20.7% on upgraded forecasts. In contrast, Dollar Tree fell 8.4% after warning tariffs would hurt profits. With Q2 earnings season wrapping up, market focus has shifted to Q3 projections and the impact of potential trade tensions, especially under former President Trump’s proposed tariff policies if he returns to office.

Asia
Asian equities advanced Thursday, buoyed by dovish Fed commentary easing bond market jitters. Australia’s ASX200 rose 0.8%, rebounding from a recent sharp drop, and Japan’s Nikkei climbed 1.2%. This followed losses in global markets amid surging bond yields, notably in Europe. France’s 30-year yield dipped after hitting a 16-year high, but political risk remains elevated as Prime Minister Bayrou faces a no-confidence vote over proposed 2026 budget cuts. A collapse of his minority coalition would deepen fiscal uncertainty. Global investors are watching both political and economic developments closely across Asia and Europe.

Currencies
The South African rand edged higher against the U.S. dollar on Wednesday following weak U.S. PMI data, which supported expectations of a Federal Reserve rate cut. Globally, the dollar softened Thursday amid heightened market volatility tied to bond market movements and signs of a cooling U.S. labor market. Investors now await Friday’s critical U.S. jobs report, which could shape the Fed’s near-term policy direction. Job openings dropped to a 10-month low in July, though layoffs remained stable—indicating labor softness that may justify an imminent Fed rate reduction. Markets remain sensitive to economic data.

Commodities
Gold prices eased Thursday due to profit-taking after reaching record highs on Fed rate cut hopes. Traders awaited key U.S. jobs data for further guidance. Meanwhile, oil prices extended declines, falling over 2%, as attention turned to Sunday’s OPEC+ meeting. The group may raise production again in October, with eight members reportedly considering increases to reclaim market share. OPEC+ had already planned to lift targets by 2.2 million barrels per day through September. Despite rising output, Middle Eastern oil prices remain the strongest globally, encouraging countries like Saudi Arabia to boost supply further.

Woolworths Holdings Limited (WHL) +2.26%

Woolworths Holdings delivered a mixed FY25 performance, with Group turnover and concession sales up 6.1% and 6.8% (constant currency), despite macroeconomic headwinds. Woolworths South Africa drove growth, with Food posting strong 11.0% sales growth and FBH improving in H2. However, Country Road Group’s underperformance, due to discounting and margin pressure, weighed on results. Group aEBIT fell 10.9% to R5.2bn. HEPS declined 23.9%. The balance sheet remains strong with net borrowings of R5.6bn and net debt/EBITDA of 1.46x. RoCE of 16.4% remains above WACC despite apparel weakness.

Cashbuild Limited (CSB) -3.28%

Cashbuild delivered resilient FY25 results, with revenue rising 5% on a comparable 52-week basis, driven by a 4% increase in transaction volumes and modest price inflation of 1.7%. Gross margin improved slightly to 24.8%. Operating expenses decreased 3%, benefitting from the prior year’s goodwill impairments and a 53rd week. HEPS rose 10%, while EPS more than doubled. Cash and short-term funds increased to R1.9bn, and NAV per share grew 4%. Store optimisation continued, with 8 openings and 12 closures. Post-period revenue is up 6%, though management expects a challenging trading environment.

Discovery Limited (DSY) +4.49%

Discovery delivered a strong FY25 performance, with normalised profit from operations expected to rise by 26%–31%, underpinned by robust growth across its SA and global businesses. Notably, Discovery Insure surged 225%–230%, Invest grew 27%–32%, and Discovery Bank reported its first profitable period. VitalityHealth and VitalityLife posted 170%–175% and 67%–72% growth, respectively. HEPS is expected to increase by 27%–32%, with EPS up 23%–28%. Restated FY24 earnings reflect IFRS 17 adoption, enhancing CSM value. The Group continues to benefit from its diversified portfolio, technology investments, and disciplined risk management.

Aspen Pharmacare Holdings Limited (APN) -1.48%

Aspen delivered mixed FY25 results amid operational challenges and strategic progress. Commercial Pharmaceuticals, representing over 70% of revenue, grew 10% in constant currency, supported by organic growth, Mounjaro®'s launch in South Africa, and LATAM portfolio gains. However, Group performance was negatively impacted by a material mRNA manufacturing dispute, R4.1bn in impairments (mainly due to global minimum tax changes), and China restructuring costs. Manufacturing EBITDA fell 62%. Despite this, operating cash conversion reached 147%, and net debt closed at R31.2bn. The insulin contract is progressing, positioning Aspen for stronger earnings in FY26.

Anglo American plc (AGL) +2.51%

Anglo American has launched an accelerated bookbuild to sell its remaining 19.9% stake (~52.2 million shares) in Valterra Platinum Limited, following the May 2025 demerger. The sale is aimed at simplifying Anglo's portfolio and strengthening its balance sheet. Valterra, now dual-listed in London and Johannesburg, has shown strong early performance as a standalone PGM producer. The Placing targets institutional investors only, with remaining shares subject to a 90-day lock-up post-sale. This move aligns with Anglo’s strategic focus on copper, premium iron ore, and crop nutrients, marking continued progress in portfolio realignment.

Salesforce Inc. (CRM) +1.42%

Salesforce forecast third-quarter revenue slightly below Wall Street expectations, reflecting weaker-than-anticipated monetisation of its AI agent platform, Agentforce, amid macroeconomic uncertainty. The company announced a $20 billion expansion of its share buyback programme, but investor concerns over AI returns and spending volatility pushed shares down over 5% in after-hours trading. Despite widespread AI integration across its cloud services, Salesforce faces growing pressure to deliver tangible results from its AI investments. Q3 revenue is expected between $10.24 billion and $10.29 billion, with adjusted EPS between $2.84 and $2.86—broadly in line with analyst expectations but lacking upside surprises.

Hewlett Packard Enterprise Company (HPE) +0.62%

Hewlett Packard Enterprise outperformed third-quarter revenue expectations, driven by surging demand for AI-optimised servers and networking products. Server revenue rose 16% YoY to $4.9 billion, while networking revenue jumped 54% to $1.7 billion. The strong performance was fuelled by the integration of Nvidia’s GPUs and the recent $14 billion acquisition of Juniper Networks. HPE also reached a governance truce with major investor Elliott Management by appointing Robert Calderoni to its board. Q3 revenue reached $9.14 billion, beating estimates, and Q4 guidance of $9.7–$10.1 billion surpassed expectations. FY25 revenue growth guidance was raised to 14%–16%, up from 7%–9% previously.

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