Stock 13-05-2024 12:14 6 Views

​Tech 5: SEC Delays Spot Ethereum ETF Decision, US Revokes Huawei Sales Licenses for Intel, Qualcomm

The US Securities and Exchange Commission (SEC) said this week that it is further delaying its decision on spot Ethereum exchange-traded funds (ETFs), dashing what little hope remained of an approval in 2024.

Meanwhile, Apple (NASDAQ:AAPL) unveiled two newly designed iPads with artificial intelligence (AI) capabilities, and two tech companies reported their quarterly earnings, prompting very different reactions from investors.

1. SEC delays decision on Invesco Galaxy Spot Ethereum ETF

This week brought bad news for investors waiting for the SEC’s decision on spot Ethereum ETFs. The SEC said on Monday (May 6) that it will delay its decision on the proposed Invesco Galaxy Spot Ethereum ETF for the second time, this time until July 5. The regulator previously delayed its decision in February, calling for a 21 day public comment period. Franklin Templeton, VanEck and BlackRock (NYSE:BLK) are also awaiting spot Ethereum ETF decisions from the SEC.

In late April, Reuters reported that meetings between the ETF issuers and the SEC were not proceeding smoothly, according to four anonymous sources who participated in the gatherings.

On X, formerly Twitter, Bloomberg ETF analyst Eric Balchunas expressed a complete lack of optimism this week regarding the possibility of a spot Ethereum ETF receiving SEC approval within the year. In March, Balchunas estimated a slim 25 percent chance of approval, but he now believes that the odds have dwindled even further.

In related news, according to a Tuesday (May 7) SEC filing, the NYSE Arca has withdrawn its application for a rule change that would allow Grayscale’s Ethereum futures ETF to trade on the exchange. The SEC previously delayed a decision on the rule change on April 23.

2. Apple reveals AI-capable iPads at Let Loose event

Apple’s highly anticipated Let Loose event on Tuesday unveiled a range of exciting new products and updates focused primarily on enhanced performance, display technology and accessories for the firm’s iPad lineup. The event centered around the introduction of new iPad Air and iPad Pro models and Apple’s latest silicon chip, the M4.

The iPad Air, powered by the M2 chip, comes with a high-resolution Liquid Retina display, faster Wi-Fi connectivity, front-facing cameras with AI-enabled Center Stage technology and integration with cloud-based apps. As for the iPad Pro, it is powered by Apple’s new M4 chip and has its most advanced screen technology to date, the Ultra Retina XDR display.

The new tablets will begin shipping on May 15. The M4 chip uses advanced 3 nanometer technology and features a new display engine to support the Ultra Retina XDR. Its central processing unit has up to 10 performance and efficiency cores, allowing it to perform complex tasks up to 1.5 times faster than the M2 chip.

Additionally, its 10 core graphics processing unit is equipped with machine-learning accelerators and features Dynamic Caching, an innovative addition to the M3 chip family that allows for real-time memory allocation, improving overall efficiency. Finally, the chip includes a 16 core neural engine, Apple’s fastest to date, enabling on-device machine learning.

Apple also introduced a new Magic Keyboard with a built-in trackpad that attaches magnetically to the iPad, and a more precise Apple Pencil Pro with a sensor that lets users easily switch between tools and adjust line weight. Aside from that, it announced new upgrades for Final Cut Pro and Logic Pro, adding AI features such as Live Multicam, Stem Splitter and ChromaGlow. The updates will be available on iPad and Mac on May 11 and May 13, respectively.

3. Arm Holdings and Reddit share quarterly earnings

Arm Holdings (NASDAQ:ARM), a leading technology provider in the semiconductor industry, released a conservative revenue forecast on Wednesday (May 8), projecting that revenue for its 2025 fiscal year will range from US$3.8 billion to US$4.1 billion, with a projected profit of US$1.45 to US$1.65 per share.

Analysts were predicting a profit of US$1.53 per share and revenue of US$4.01 billion.

After trading at around US$70 in early February, an optimistic forecast released on February 7 caused Arm’s share price to climb significantly, peaking at US$148.97 on February 12. However, this latest forecast instead led to a 6.22 percent decrease in share value after market closure, and Arm opened at US$99.57 on Thursday (May 9).

In a conference call with analysts and shareholders shortly after the results were released, CFO Jason Child said Arm’s 2026 and 2027 fiscal years will likely bring a revenue growth rate of at least 20 percent; by Friday (May 10), the firm’s share price had risen to US$108.64, 4.55 percent higher than Monday’s open of US$103.99.

Meanwhile, Reddit (NYSE:RDDT) released itsfirst earnings report since going public on the NYSE. On March 21, the day it went public, the company was valued at nearly US$9 billion and its share price had surged from US$34 to US$50.44 by the time the market closed, peaking at over US$65 on March 26. It spent April in the US$40 to US$50 range.

Reddit’s earnings report, released on Tuesday, shows a revenue increase of 48 percent year-over-year to US$243 million, with ad revenue increasing 39 percent to US$222.7 million during that period. These numbers came in well above analysts’ predictions of 29.62 percent growth for total revenue and 21 percent growth for ad revenue.

The news sent the company’s share price up from US$49 to US$58 at the end of trading on Tuesday before it retracted below US$50 on Thursday (May 9). As of the close of trading on Friday, Reddit was trading for US$53.53.

4. US revokes Huawei sales licenses for Intel and Qualcomm

Bloomberg reported on Tuesday that the US government has revoked licenses previously held by Intel (NASDAQ:INTC) and Qualcomm (NASDAQ:QCOM) that allowed the companies to sell semiconductors to sanctioned Chinese tech company Huawei, a decision that will affect the sale of chips used in Huawei’s phones and laptops.

According to House Foreign Affairs Committee Chairman Michael McCaul, who spoke to Bloomberg on Tuesday, the decision was made in an effort to prevent China from advancing its development of AI.

Following the news, Intel adjusted its Q2 revenue expectations to below the midpoint of projections issued on April 25. Both companies experienced small share price drops when trading opened on Wednesday, but Qualcomm recovered quickly to its previous level. The latter company recently disclosed that it has already limited its business with Huawei.

5. Hugging Face launches new open-source robotics toolkit

Hugging Face, a leading AI technology company, unveiled LeRobot, an open-source robotics toolkit that offers developers and researchers accessible tools and collaboration opportunities.

The project, which is available on Microsoft’s (NASDAQ:MSFT) GitHub, is designed to provide developers with resources to build, train and deploy AI-powered robotics applications.

Hugging Face has primarily focused on developing AI and natural language processing (NLP) tools. The company has created several open-source libraries, including the Transformer library, which provides a wide variety of NLP architectures; the Tokenizers library, which offers text tokenization algorithms for NLP tasks; and Hugging Face Hub, a platform for hosting and sharing pre-trained models, data sets and other resources.

LeRobot is built on top of PyTorch, an open-source machine-learning library developed by Facebook’s AI research lab and used for developing and training deep-learning models. With the release of LeRobot, Hugging Face is expanding its focus beyond traditional AI software and venturing into the world of robotics hardware.

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

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