Global shares jump on AI trade revival despite SpaceX, AMD setbacks – business live

The Resurgent AI Investment Cycle

Global equity markets are experiencing a significant uplift, primarily driven by a renewed surge in investor confidence surrounding artificial intelligence technologies. This revival follows a period of turbulence in July, where the semiconductor sector, a bellwether for AI investment, saw a correction of over 20%. The current optimism is largely fueled by robust corporate earnings and strategic deals within the AI ecosystem. Palantir Technologies, for instance, reported what its CEO described as “otherworldly” quarterly results, projecting a near doubling of worldwide revenues to $8 billion this year.

This exceptional growth, coupled with reports of Anthropic securing a substantial $10 billion computing infrastructure deal and Caterpillar raising its sales guidance while dismissing concerns about slowing data-center demand, has collectively helped to rebuild investor conviction in the broader AI capital expenditure cycle. The implications of this renewed enthusiasm are far-reaching, suggesting that the initial hype around AI is translating into tangible financial performance and significant infrastructure investment. This trend indicates that companies are not just exploring AI but are actively deploying capital to build out the necessary computing power and models to meet escalating demand. The strong performance of these key players provides a crucial signal to the market that the AI revolution is gaining momentum, attracting fresh capital and driving valuations higher across related sectors. This positive feedback loop could sustain market rallies, drawing in more investors eager to capitalize on the perceived long-term growth potential of AI.

Navigating Volatility in Oil Markets

While technology stocks soar, the oil market presents a more nuanced picture, characterized by cautious optimism tempered by underlying oversupply concerns. Brent crude, a global benchmark, has seen prices dip below $80 a barrel, trading around $79.97, despite a slight rebound from earlier lows. This fluctuation is largely attributed to evolving geopolitical dynamics in the Middle East, specifically hopes for an interim deal between Iran and Oman regarding the Strait of Hormuz. Reports from Axios and the Wall Street Journal suggest a temporary 60-day arrangement could allow vessels to pass through Iranian waters without fees, easing transit concerns.

Energy economists, such as John Oh from Commonwealth Bank, highlight that ship tracking data indicates oil flows through the Strait of Hormuz have held up better than initially feared, reaching 40-45% of pre-war levels. Oh suggests that a return to just 50-60% of pre-war traffic could lead to oversupply conditions in global oil markets, justifying the current pricing in of oversupply worries. This delicate balance underscores the market's sensitivity to geopolitical stability and supply chain integrity. Any concrete progress on a long-term arrangement could further depress prices, while a breakdown in negotiations could quickly reverse the trend, injecting renewed volatility and uncertainty into global energy markets.

Corporate Performance and Tax Scrutiny

Amidst the broader market movements, individual corporate performances reveal a mixed bag of successes and challenges, particularly concerning financial contributions to public coffers. Palantir's impressive revenue growth and market performance are juxtaposed with scrutiny over its tax practices. Despite securing lucrative public sector contracts in the UK, including with the NHS and Ministry of Defence, the company paid only £2 million in UK corporation tax in 2024. A report by Cictar indicates Palantir's effective global tax rate is a mere 1.4%, thanks to various tax breaks. This situation raises questions about the fairness of corporate tax contributions, especially for companies benefiting significantly from public funds.

Meanwhile, SpaceX, in its first results as a public company, reported encouraging figures, with revenue of $7.8 billion, 15% ahead of forecasts and nearly double the previous year. The company also narrowed its losses. However, its AI division, while generating $2.6 billion in Q2, continues to operate at an operating loss of $1.3 billion. This highlights the significant investment required in cutting-edge AI development and the long-term nature of such bets. The upcoming eligibility for sale of up to 912 million shares held by employees and pre-IPO stakeholders presents another test for SpaceX, potentially impacting its stock performance as more shares become available on the market.