Alibaba Q2 tops revenue forecasts as AI and instant retail spend bites into profit

South Africa

South African equities advanced modestly, with the Top 40 up 0.25% to 102,807.89 and the All Share up 0.25% to 110,295.21. The SARB’s Financial Stability Review highlighted a resilient financial system supported by easing inflation, improved fiscal metrics, grey-list removal and S&P’s upgrade, which pushed government bond yields to six-year lows. The composite leading indicator fell 1.2% m/m, signalling softer forward momentum. Pepkor secured regulatory approval to establish a banking presence, while France’s development agency extended a €300 million clean-energy loan to Transnet.

Europe

European equities extended gains, with the STOXX 600 rising 0.91% as investors drew confidence from potential progress toward a Ukraine ceasefire and expectations of US rate cuts. Construction and materials stocks led the rally, while defence shares recovered after recent weakness. Germany’s DAX and France’s CAC gained 1% and 0.8%, respectively. The European Parliament approved a €1.5 billion defence-investment package, and the UK pledged further air-defence support for Ukraine. Banks advanced ahead of the UK Budget amid expectations of tax stability. Markets recovered after last week’s AI-driven pullback.

United States

US markets extended their rally, supported by economic data that strengthened expectations for a December Fed rate cut. Retail sales and PPI releases showed cooling momentum, while consumer confidence deteriorated sharply, highlighting household caution. Nevertheless, retail earnings surprised positively, driving a 2% rise in the S&P retail index, with Kohl’s and Abercrombie & Fitch jumping sharply. Nvidia’s weakness limited Nasdaq gains, though Alphabet advanced after reports that Meta may use Google’s AI chips. Despite stale data due to the prior government shutdown, expectations for easing policy remained intact.

Asia

Asia-Pacific equities tracked Wall Street higher, though regional dynamics remained mixed. Australian inflation accelerated to 3.8% y/y in October—its fastest pace in seven months—surpassing expectations as the country transitions to monthly CPI reporting. In geopolitics, China warned it would “crush” foreign interference after Japan announced missile deployment plans near Taiwan, adding tension to regional risk sentiment. Despite this backdrop, broader Asian markets held firm, reflecting improved global risk appetite following US data that reinforced expectations of monetary easing and helped stabilise investor sentiment across the region.

Currencies

The rand strengthened as mixed US economic data pushed the dollar lower, reinforcing expectations of a Fed rate cut next month. The dollar index fell 0.5%, reversing last week’s gains. The yen rose after reports the Bank of Japan is preparing markets for a potential December rate hike, shifting focus back to domestic inflation risks. The New Zealand dollar also rallied after its central bank signalled an end to the easing cycle. Overall, currency markets reflected repositioning around diverging policy paths and improving clarity on US macro conditions.

Commodities

Gold climbed to a near two-week high as softer US economic data strengthened expectations of a December Fed rate cut, weighing on the dollar and boosting safe-haven demand. Oil prices stabilised after Tuesday’s sharp decline, earlier driven by signs of progress in Russia-Ukraine peace talks that could reshape global crude flows and reduce sanctions risk. Expectations of easier US monetary policy offered further support, partially offsetting concerns over falling Indian imports of Russian crude. Market attention remains centred on geopolitical developments and potential shifts in global supply dynamics. 

Pepkor Holdings Limited (PPH) +0.08%

Pepkor delivered a strong FY25 performance, with revenue up 12% to R95.3 billion, operating profit rising 13.2% to R11.1 billion, and normalised HEPS increasing 23.4%. The group sustained market-leading share across core categories and expanded its retail and digital ecosystem beyond 6 000 stores. Fintech momentum remained robust, with Flash throughput reaching R60 billion. Strategic acquisitions extended its off-price, adultwear and homeware segments, while financial services growth accelerated. Pepkor enters FY26 with solid execution, disciplined stock management and clear capacity to scale its omnichannel and fintech platforms.

Octodec Investments Limited (OCT) +1.35%

Octodec delivered a solid FY2025 performance, supported by improved portfolio metrics across its 219 mainly residential, retail, office and industrial properties in Tshwane and Johannesburg. Distributable income increased to R456.5 million, with distributable income per share rising to 171.5 cents and dividends per share to 134.5 cents. NAV per share improved to R24.55, while LTV strengthened to 38.2%. The portfolio, valued at R11.2 billion with 1.47 million m² of lettable area, underpins stable cash generation. Investors should refer to the full audited results for comprehensive detail. 

Zeda Limited (ZZD) +11.16%

Zeda delivered a resilient FY2025 performance, achieving double-digit growth in earnings and operating profit despite a challenging automotive environment. Revenue rose 1.7% to R10.6 billion, gross profit increased 3.9% with a 40.9% margin, and operating profit grew 10.8%, lifting the margin to 15%. HEPS increased 15.7% to 361 cents, supported by disciplined fleet management, stronger utilisation and expansion in Leasing, Subscription and Greater Africa. ROIC of 14.7% exceeded WACC, while net debt to EBITDA remained contained at 1.5x. A final dividend of 126 cents brings the annual payout to 181 cents.

Sea Harvest Group Limited (SHG) +5.87%

Sea Harvest expects a material improvement in FY2025 performance, with HEPS forecast to be at least 165 cents—more than 200% higher than the prior year’s 55 cents. The anticipated surge in earnings reflects stronger catch rates, firmer pricing and operational efficiencies within the hake business. In line with JSE requirements, the Group will provide a more detailed earnings range once reasonable certainty is achieved. Full-year results are scheduled for release on or about 3 March 2026. Forward-looking statements remain unaudited.

Stefanutti Stocks Holdings Limited (SSK) -1.67%

Stefanutti Stocks reported a significantly improved interim performance for the six months to 31 August 2025, with contract revenue steady at R3.7 billion and operating profit from continuing operations up 22% to R161 million. Total earnings rose sharply to R48 million, driven by stronger operational delivery and reduced losses in discontinued operations. EBITDA increased to R232 million, while HEPS improved to 34.54 cents. The group concluded a new R850 million five-year facility with Standard Bank and secured a full and final R580 million settlement with Eskom on the Kusile project. The order book strengthened to R13.4 billion, though liquidity pressures and going-concern risks persist. No dividend was declared.

Alibaba Group Holding Limited (9988) +2.14%

Alibaba delivered a stronger-than-expected Q2 revenue performance, rising to 247.8 billion yuan on the back of rapid expansion in one-hour delivery and firm cloud growth, though adjusted profit missed consensus. The group continues to invest heavily in AI and instant retail, with CEO Eddie Wu signalling that its previously announced 380 billion-yuan AI investment may prove conservative given surging demand. Net profit fell 53% due to elevated spend, yet remained ahead of forecasts. Despite intense industry-wide cash burn and subsidy-driven price wars, Alibaba’s diversified model and scale position it to capture long-term gains in instant retail and consumer AI adoption.

Dell Technologies Inc. (DELL) -1.02%

Dell issued stronger-than-expected Q4 guidance, forecasting revenue of $31–32 billion and adjusted EPS of $3.50, both ahead of consensus, driven by accelerating demand for AI-optimised servers. Fiscal 2026 AI server revenue is now projected at $25 billion, up from $20 billion, with backlog reaching $18.4 billion on record new orders. Dell is securing major contracts—including the US Department of Energy, G42 and xAI—while navigating rising memory-chip costs. Q3 revenue was marginally softer at $27.01 billion, though adjusted EPS of $2.59 exceeded expectations. Annual revenue and profit guidance were raised meaningfully.

Workday Inc. (WDAY) +3.11%

Workday reported Q3 results that broadly met expectations, with subscription revenue rising 14.6% to $2.24 billion and total revenue up 12.6% to $2.43 billion. Adjusted EPS of $2.32 exceeded forecasts, but softer demand—particularly among higher-education clients facing funding pressures—dampened sentiment and pushed shares lower in after-hours trading. Q4 subscription revenue guidance of $2.36 billion was only marginally ahead of consensus, reflecting cautious customer spending in a weaker macro environment. Workday continues to face competitive pressure from Oracle, SAP and ADP as clients re-evaluate HR and payroll system investments.

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