Meta surges 11% after AI-driven ad boom lifts earnings and guidance

South Africa

The Top 40 index edged up 0.08% on Wednesday to close at 91,597.6 points, while the All Share index rose 0.15% to 99,314.7. Investors are closely monitoring the government's pending response to a US trade proposal involving $3.3 billion in investments, LNG purchases, and relaxed poultry import rules. Meanwhile, President Donald Trump suggested he may not attend the G20 Summit in South Africa later this year, potentially delegating attendance. Focus also turns to Thursday’s interest rate decision by the South African Reserve Bank, where a 25-basis-point cut is widely expected amid subdued inflation and weak economic momentum. Glencore has announced plans to cut $1 billion in costs by end-2026 in response to sustained weakness in coal and cobalt prices, along with historically low metal processing fees.

Europe

European equities ended flat on Wednesday as investors weighed corporate pricing strategies against the backdrop of rising tariffs. The STOXX 600 held steady at 550.24 points, with auto shares dragging the index. Porsche and Aston Martin fell sharply after announcing US price hikes, while Mercedes-Benz flagged a $420 million tariff impact. Adidas also warned that tariffs would add €200 million in costs, leading to an 11% fall in its share price. On the macro side, eurozone GDP rose 0.1% in Q2, narrowly beating expectations, with Spain, France, and Ireland offsetting German and Italian weakness. Russia reported a second week of deflation.

United States

Wall Street gave up earlier gains on Wednesday after Fed Chair Jerome Powell signalled it was too early to anticipate a September rate cut. While the Fed left rates unchanged as expected, Powell highlighted that monetary policy remains modestly restrictive. The statement tempered investor optimism following stronger-than-expected Q2 GDP growth, with underlying data pointing to slowing momentum. ADP data showed private payrolls rose 104,000 in July, topping forecasts. Market-implied odds of a September cut fell sharply post-Fed. After hours, Microsoft and Meta surged over 6% following strong earnings, while investors awaited results from Apple and Amazon due Thursday.

Asia

Asian markets slipped on Thursday, weighed down by weak Chinese manufacturing data and softer commodity prices. China’s official PMI fell to 49.3 in July, marking a fourth consecutive contraction and missing consensus. The data reinforced concerns about soft domestic demand and waning export support ahead of tariff escalations. In Japan, retail sales rose 2.0% in June, beating expectations. HSBC reported a 26% drop in H1 pretax profit, citing write-downs related to Chinese and Hong Kong exposures, complicating CEO Elhedery’s turnaround strategy. Meanwhile, Panasonic posted a 47% rise in battery unit profit, boosted by AI-driven demand despite headwinds from US tariffs.

Currencies

The rand held steady around 18.05 against the US dollar ahead of the SARB rate decision. The euro traded at $1.0860, gaining modestly after stronger-than-expected eurozone GDP data. Sterling edged up to $1.2735, supported by resilient labour market data and expectations that the Bank of England may delay rate cuts. The yen weakened to 157.60 per dollar, with Japanese authorities monitoring closely amid growing FX volatility. The dollar index hovered near 104.2.

Commodities

Brent crude was last down 0.9% at $82.55 per barrel amid concerns about Chinese demand and mixed inventory data from the US. WTI futures also slipped to $78.50. Copper extended losses to trade near multi-month lows following the disappointing Chinese PMI data, while gold steadied at $1,970/oz as investors reassessed the Fed’s policy stance. Iron ore prices also weakened in Asia trading, pressured by slowing Chinese industrial activity.

AECI Limited (AFE) +0.10%

AECI delivered a mixed set of unaudited interim results for the six months ended 30 June 2025, with continued progress on strategic execution. Revenue from continuing operations declined 2% year-on-year to R15.7 billion, while EBITDA from continuing operations rose 24% to R1.58 billion, reflecting improved operational efficiency. However, profit from operations dipped 6% to R699 million. Earnings per share from continuing operations surged 70% to 308 cents, while total EPS rose 26% to 294 cents. Headline earnings per share more than doubled, up 132% to 604 cents. Net debt was sharply reduced to R2.92 billion, from R5.10 billion a year earlier, supporting the declaration of a 100 cents interim dividend. The Company also improved its safety record, reporting a TRIR of 0.20 (vs. 0.28 in 2024). AECI continues to prioritise its strategic goals of portfolio optimisation, operational excellence, and international expansion, underpinned by a high-performance culture.

RMB Holdings Limited (RMH) -2.44%

RMB has provided a voluntary update aligned with its ongoing monetisation strategy. Through its wholly owned subsidiary RMH Property Holdco 4 (Pty) Ltd, the Company holds a 50% stake in Integer Properties 3 (Pty) Ltd, which in turn owns 50% of Senzosol (Pty) Ltd. Senzosol recently disposed of a warehouse located in Montague Gardens for R55.6 million, realising an initial yield of 9%. Integer 3 received net proceeds of approximately R22.2 million from the sale, which will be applied toward reducing an uneven shareholder loan from RMH Property. The transaction is immaterial, representing less than 5% of RMH’s market capitalisation as of 15 August 2024, and does not qualify as a categorisable transaction under JSE Listings Requirements.

Brimstone Investment Corporation Limited (BRT) +6.80%

Brimstone has issued a trading statement indicating a strong earnings recovery for the six months ended 30 June 2025. The Group expects to report earnings per share (EPS) of between 100.4 cents and 112.5 cents, a significant turnaround from the loss per share of 121.2 cents in the prior period, driven primarily by a sharp increase in profitability at Sea Harvest Group Ltd and the absence of a R562.1 million deemed disposal loss recognised last year. Headline earnings per share (HEPS) are expected to rise by 32% to 42%, to between 95.1 cents and 102.3 cents. The improvement also reflects lower finance and operating costs. The results are scheduled for release on or about 2 September 2025, and have not yet been reviewed or audited.

Accelerate Property Fund Limited (APF) 0.00%

Accelerate Property Fund has issued a trading statement ahead of its results for the financial year ended 31 March 2025, flagging a significant deterioration in distributable earnings. The Company expects to report a distributable loss of between R70.6 million and R72.0 million—representing an increase of over 650% compared to the prior year’s loss of R9.4 million. The sharp decline is attributed to the removal of headlease income from related party transactions, higher operating expenses, and elevated interest costs. No distribution will be declared for the period, consistent with FY2024. The financial results are expected on or about 4 August 2025, with the integrated annual report to follow on or about 18 August. The statement has not been reviewed by external auditors.

Meta Platforms Inc. (META) -0.68%

Meta Platforms posted stronger-than-expected second-quarter results, sending its shares up 11% in after-hours trade. Revenue rose to $47.52 billion, beating the consensus estimate of $44.80 billion, while EPS came in at $7.14 versus $5.92 expected. The upside surprise was driven by AI-fuelled growth in its core advertising business, especially via Instagram Reels, which is set to contribute more than half of US ad revenue this year, according to eMarketer. Meta also raised the lower end of its full-year capital expenditure guidance by $2 billion, now expecting to spend between $66 billion and $72 billion, citing escalating AI infrastructure demands. CEO Mark Zuckerberg noted rising costs—particularly in data centres and talent acquisition—would drive faster expense growth in 2026. Wall Street appears reassured, for now, despite long-standing concerns over the firm’s aggressive capital investment in AI.

Microsoft Corporation (MSFT) +0.13%

Microsoft also delivered a bullish outlook, forecasting a record $30 billion in Q1 capex—well above analysts' expectations of $23.75 billion—underscoring its commitment to expanding AI capacity. Shares gained 9% in extended trade after the company revealed Azure revenue exceeded $75 billion on an annualised basis for the first time. Azure grew 39% year-on-year in Q2, ahead of the 34.75% consensus, and Microsoft now expects 37% growth in the current quarter. The surge in cloud demand, combined with continued infrastructure spending, positions Microsoft to potentially outpace rivals like Alphabet and Meta on AI infrastructure. Together, results from the three tech giants added $500 billion to AI-related market cap, reinforcing investor conviction in the sector’s long-term trajectory.

UBS Group AG (UBSG) +1.11%

UBS reported a strong Q2, with net profit more than doubling to $2.4 billion, above the company’s own forecast of $2.045 billion. The outperformance was driven by a 25% surge in global markets revenue, helped by heightened trading activity amid tariff-related uncertainty. Wealth management transaction income rose 12%, though just shy of estimates. CEO Sergio Ermotti reiterated the bank's commitment to shareholder returns, even as he criticised proposed Swiss regulatory changes that would require an additional $24 billion in capital buffers. While UBS expects trading activity to normalise in the coming quarter, the outlook for investment banking deal flow remains opaque, with timing for pipeline execution still uncertain.

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