Dell doubles profit growth target to 15% on soaring AI server demand

South Africa

The All Share index shed 0.43% yesterday to settle at 109,448.89 points, while the Top 40 index lost 0.47% to close at 102,337.44. South Africa’s net foreign reserves rose to $67.865 billion in September, exceeding forecasts. Eskom’s largest union, representing 15,000 workers, has submitted a 15% wage demand, more than four times inflation, following the utility’s first profit in eight years. Finance Minister Godongwana reportedly supports Johnstone Makhubu as a leading candidate to replace SARS Commissioner Edward Kieswetter when he steps down in April 2026, although the Treasury emphasises an open application process. Inflation remains moderate at 3.3%, and Eskom plans to raise debt to stabilise operations.

European Union

European luxury shares rallied, driving the STXLUXP index to its highest since May, led by LVMH, Dior, and Kering, supported by design debuts and affordability strategies. Eurozone household savings rose to 15.4%, higher than expected, reflecting cautious consumption amid weak export growth. German debt is projected to reach 80.25% of GDP by 2029 due to defence and infrastructure spending, while France’s political crisis complicates the 2026 budget, increasing the likelihood of emergency legislation. The ECB emphasises adherence to EU fiscal commitments amid these uncertainties.

United States

U.S. equities declined as the government shutdown extended to seven days, limiting economic data availability. Investors relied on secondary indicators and Federal Reserve comments for insight into economic conditions and interest rate policy. Consumer expectations fell while inflation projections rose. Tesla shares dropped 4.5% after introducing a low-cost Model Y, whereas AMD rose 3.8% on a supply deal with OpenAI. Constellation Brands and IBM advanced following better-than-expected sales and AI partnerships. Market focus remains on monetary policy and the impact of the federal shutdown.

Asia

Asian markets followed Wall Street lower amid global economic concerns and political uncertainty in France. Japanese real wages fell 1.4% YoY in August, the fastest decline in three months, as inflation outpaced nominal pay growth, reducing household purchasing power. Consumer inflation eased to 3.1%, complicating Bank of Japan policy decisions. Business confidence weakened in the auto sector, with the manufacturers’ sentiment index dropping to plus 8, its lowest since July. Persistent inflation and declining real wages challenge domestic consumption and could dampen near-term economic growth in the region.

Currencies

The U.S. dollar strengthened to a two-month high amid intensifying risks from the government shutdown, with the Dollar Index rising 0.3% to 98.91. Safe-haven demand was boosted by political uncertainty and concerns over potential mass federal worker firings. The South African rand remained steady following the release of higher-than-expected foreign reserves, reflecting resilience in domestic liquidity. Currency markets continue to react to global macroeconomic factors, central bank policies, and political developments, highlighting the impact of geopolitical and fiscal uncertainty on exchange rates across emerging and developed markets.

Commodities

Gold surged past $4,000/oz, reaching a record high as investors sought safety amid mounting economic and geopolitical uncertainty, alongside expectations of further U.S. Federal Reserve rate cuts. Oil prices edged higher after OPEC+ opted for a modest 137,000 barrels/day production increase for November, the lowest among options considered, easing oversupply concerns. U.S. crude stocks rose 2.78 million barrels, while gasoline and distillate inventories declined. Market sentiment reflects cautious optimism as investors monitor global supply trends, geopolitical developments, and U.S. energy inventories for short-term price signals.

Datatec Limited (DTC) +11.42%

Datatec expects a robust first-half performance for FY26, with all divisions delivering significantly stronger results versus H1 FY25. Westcon sustained margin expansion and profit growth, while Logicalis International benefited from improved operational leverage and Logicalis Latin America posted marked gains. Earnings per share are projected at 21–23 US cents, up 86–104% year-on-year, with headline EPS more than doubling and underlying EPS rising 33–48% to 18–20 US cents. Interim results are due around 30 October 2025, underscoring continued profitability momentum across the Group’s global ICT portfolio.

Afrimat Limited (AFT) +10.71%

Afrimat expects a strong interim performance for the six months to 31 August 2025, with EPS up 74–79% to between 101.4 and 104.3 cents, and HEPS rising 90–95% to between 100.7 and 103.4 cents. Growth was broad-based, led by improved efficiencies and market recovery in Construction Materials and record fly ash volumes. Bulk Commodities benefited from higher iron ore sales and resumed anthracite exports, while operational enhancements continued at Nkomati. The interim results, due around 23 October 2025, will further detail Afrimat’s sustained operational and earnings momentum.

Finbond Group Limited (FGL) +6.86%

Finbond expects a strong turnaround for the six months ended 31 August 2025, forecasting earnings per share of 10.81–11.27 cents and headline earnings per share of 0.88–1.28 cents, compared to losses of 2.3 and 2.0 cents respectively in the prior period. The improvement reflects a material recovery across the Group’s operations following prior-year losses. Unaudited interim results are due on or before 31 October 2025, marking a return to profitability and reinforcing Finbond’s progress in stabilising and strengthening its financial performance.

Dell Technologies Inc. (DELL) +3.51%

Dell nearly doubled its annual profit growth target, now forecasting adjusted EPS growth of at least 15% per year over the next four years, up from 8%, driven by surging demand for AI servers powering platforms such as ChatGPT. Revenue is expected to grow 7–9% annually, versus 3–4% previously. The Infrastructure Solutions Group, which includes servers and storage, is set to expand 11–14% annually, underscoring Dell’s leading position in the AI hardware market. The company reaffirmed FY26 guidance, including $20 billion in expected AI server shipments.

Shell plc (SHEL) +1.53%

Shell expects a $600 million impairment in Q3 after cancelling its Rotterdam biofuels project, bringing total charges to $1.4 billion. The decision follows a broader retrenchment by energy majors from renewables amid weaker project economics. The company guided for stronger LNG output of 7–7.4 million tons, up from prior forecasts, and expects significantly higher trading results in its integrated gas division. Indicative refining margins rose to $11.6 per barrel from $8.9 in Q2. However, Shell warned of weaker chemicals performance and a $200–400 million hit from revised reservoir data in Brazil’s Tupi fields.

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