As sales of artificial-intelligence servers boom, Hewlett Packard Enterprise turned in a new quarterly revenue record, which was better than what analysts were expecting. HPE HPE, along with Dell Technologies Inc. DELL and Super Micro Computer Inc. SMCI, sells servers, including those used for AI applications. But HPE’s stock has been the most understated of the three this year, with its 28% gain. Shares rose 0.4% in the extended session after Thursday afternoon’s results. The company posted $4.7 billion in server revenue for the fiscal fourth quarter, up 32% from a year earlier, and registered an 11.6% operating margin for the segment. That’s up from a 10.1% margin a year prior. The server business essentially matched analysts’ average revenue estimate, but HPE’s overall revenue of $8.5 billion came in ahead of the $8.3 billion FactSet consensus view. HPE’s hybrid-cloud business, which brings together different computing environments, was a big source of upside as it brought in $1.6 billion in revenue, while analysts had been modeling $1.3 billion. “Our differentiated portfolio across hybrid cloud, AI and networking, which will be further enhanced with the pending Juniper Networks acquisition, positions us well to capitalize on the market opportunity, accelerating value for our shareholders,” HPE Chief Executive Antonio Neri said in a release. The company also delivered profit upside, in the form of its 58-cent adjusted earnings per share, which exceeded the 56-cent consensus view. HPE’s free cash flow of $1.5 billion was well above the $944 million that analysts were modeling. HPE projects 47 cents to 52 cents in adjusted earnings per share for the January quarter, bracketing the 49-cent consensus expectation.

The Swiss stock market continued to lag behind its European counterparts on Thursday. The SMI gained 0.1 per cent to 11,791 points. Of the 20 SMI stocks, there were 11 price gainers and 9 price losers. A total of 17.45 million shares were traded (Wednesday: 18.01 million). The biggest underperformers were Lonza (-1.6%), Geberit (-1.4%) and Richemont (-1.2%). Sika also dropped by 1.2 per cent. Zurich Insurance (+1.1% to 561.20 francs) led the outperformers ahead of Roche (+1.0%). Swiss Re (+0.1%) landed in midfield. According to the reinsurer, 2024 was another year of double-digit growth in global insured losses and losses caused by natural disasters. These claims clearly exceeded 100 billion dollars for the fifth year in a row.

Europe
The European stock markets rose on Thursday, as investors shrugged off political uncertainty in France. The Stoxx Europe 600 index ended the session up 0.4% at 519.5 points. In Paris, the CAC 40 and SBF 120 gained 0.4% and 0.5% respectively. The DAX 40 in Frankfurt climbed 0.6% and the FTSE 100 advanced 0.2% in London. Soitec soared by 12.5% to 85 euros. The manufacturer of advanced materials for the semiconductor industry hosted the ‘Substrate Vision Summit’ on Wednesday in Santa Clara, California, an event devoted to the role of semiconductor materials in the development of artificial intelligence (AI). Safran plunged by 7.3% as the aircraft engine and equipment manufacturer unveiled 2028 targets on Thursday that fell short of analysts' expectations. Air France-KLM climbed 5.8%. With the collapse of the Barnier government on Wednesday evening, the adoption of the 2025 budget has been suspended for the time being, and with it the plan to increase the tax on ticket sales from 1 January. The industrial group Mersen (+2.9%) has pushed back its targets by two years, to 2029, due to the temporary slowdown in the electric vehicle and silicon carbide (SiC) semiconductor markets.On Thursday, the UK competition authority approved the merger of the UK activities of telecoms operators Vodafone (up 2.6% in London) and Three, on condition that they agree to invest in access to the country's 5G mobile network. The British oil company Shell (-1.4% in London) and the Norwegian group Equinor (-0.8% in Oslo) announced on Thursday that they were going to combine their UK offshore oil and gas activities in a new company, thereby creating ‘the largest independent producer in the UK North Sea’.

United States
Major stock indexes slipped off their record highs on Thursday in lackluster trading ahead of Friday’s jobs report. The Dow Jones Industrial Average, which closed above 45000 points for the first time on Wednesday, lost 0.6%, or 248 points on Thursday. The tech-focused Nasdaq Composite and the S&P 500 each shed about 0.2%. The moves pulled major indexes back from records hit Wednesday. Stocks have marched to new highs repeatedly this year, with buyers emerging to snap up shares whenever they have declined. Donald Trump’s election has lifted stocks because of the prospect of lighter regulation of industry and an extension of tax cuts from his earlier administration. Declining borrowing costs have also provided a tailwind. Traders are expecting strong labor-market data Friday to cement the case for Federal Reserve officials to cut interest rates again at their meeting next week. Fed Chair Jerome Powell said on Tuesday that the economy looks improved from September, when the central bank began to reduce rates, and that the Fed could move more slowly to cut rates further. The cryptocurrency exceeded $100,000 late Wednesday, after President-elect Donald Trump picked Paul Atkins to run the Securities and Exchange Commission. The conservative lawyer has questioned the SEC’s crackdown on cryptocurrency firms and is seen as likely to take a friendlier approach to the market. Boeing (-1.0%) came under slight pressure after a federal judge rejected the settlement between Boeing and the Justice Department in connection with two fatal 737 MAX crashes. Synopsys fell 12.4 per cent after the software maker missed market expectations with its first quarter results. SentinelOne plunged 13.2 per cent. The cyber security company recorded a loss in the quarter under review, which was also higher than in the same period last year. PVH, the parent company of the Tommy Hilfiger and Calvin Klein brands, lowered its profit forecast. The share price fell by 3.5 per cent. Five Below, on the other hand, jumped by a good 10 per cent. The discount retailer had raised its forecast for the financial year following a strong Black Friday. Clothing retailer American Eagle Outfitters, on the other hand, lowered its sales forecast. The share price slipped by 14.3 per cent.

Asia
Asian stocks were mixed on Friday. The Nikkei index fell by 0.9 per cent. South Korea also continued to slide after the significant price losses of the past few days. The Kospi shed 0.4 per cent. Political uncertainties continue to weigh on the stock market here. A different picture emerged on the Chinese stock exchanges. In Hong Kong, the Hang Seng Index climbed significantly by 1.2 per cent. Shanghai on the Chinese mainland also saw an upward trend. The Shanghai Composite gained 1.0 per cent.

Bonds
The policy-sensitive 2-year U.S. Treasury yield advanced on Thursday while the longest-dated rates slipped ahead of Friday’s release of November jobs data, which is expected to show the U.S. labor market remains in good health. The 10-year Treasury note yield hovered around 4.18%. The 2-year Treasury note yield edged up 2 basis points to 4.14%. Futures market prices imply a roughly 70% chance of a quarter-point cut this month, according to CME Group.

Analysis
Baader upgrades Dormakaba to Add (Reduce) - CHF 716 (450)
JPM lowers Sika to Underw. (Neutral) - Target CHF 209 (250)
Vontobel downgrades target Barry Callebaut to CHF 1,400 (1,600) - Hold
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