Nvidia commits up to $100bn in OpenAI, deepening AI chip supply and infrastructure role

South Africa

The All Share index shed 0.14% yesterday to close at 105,963.1 points, while the Top 40 index ended the session flat as it settled the day at 98,704.6 points. French media group Canal+ acquired South African pay-TV leader MultiChoice in a R35 billion ($2.02 billion) deal, securing a strong position across 50 African countries. This marks a key step in Canal+'s global entertainment expansion strategy. Meanwhile, South Africa's Financial Sector Conduct Authority is advancing draft rules to cap assets in securities trading, aiming to enhance governance and risk oversight in the multi-billion rand market. Offshore investors remained net sellers of R0.74 billion in equities last week, with bond net sales reaching R19.59 billion, reflecting cautious capital flows.

Europe

European equities dipped, pressured by automakers and defensive sectors despite tech and mining gains. Porsche shares plunged over 8% on electric vehicle rollout delays and a downgraded 2025 outlook, dragging autos indices to monthly lows. Germany's economy contracted for a second consecutive year amid export vulnerabilities linked to U.S. tariffs. Eurozone consumers, cautious due to tariff uncertainty, shifted spending away from U.S. goods, dampening discretionary demand. Despite 2% higher tax revenues in August, short-term economic momentum remains muted, signaling ongoing headwinds for Europe's largest economy.

United States

U.S. stocks hit record highs for a third day, led by Nvidia's 3.9% rally after announcing a $100 billion investment in OpenAI and data center chip supply. Fed officials expressed skepticism over further rate cuts, emphasizing inflation control despite last week's quarter-point cut. The S&P 500 has gained 13.8% year-to-date. Market jitters arose from President Trump's new $100,000 visa fee for skilled foreign workers and potential health warnings against acetaminophen linked to autism, impacting Kenvue shares. Key inflation data, including personal consumption expenditures, are due this week.

Asia-Pacific

Asia-Pacific markets rose, buoyed by a tech rally following Nvidia's OpenAI partnership, though Japan was closed for a holiday. Indian tech stocks remain under pressure amid concerns over Trump's $100,000 visa fee on H-1B visas, heavily impacting Indian nationals (71% of 2024 visas). Indonesia's parliament is set to vote on a 2026 budget projecting 5.4% GDP growth, higher spending (+9%) and revenues (+10%), and a fiscal deficit forecast of 2.68% of GDP, within the 3% legal limit, underscoring continued regional economic expansion.

Currencies

The South African rand was stable as traders awaited key local economic data for signals on the country's economic health. The U.S. dollar weakened in early Asian trading despite hawkish Fed commentary following last week's rate cut, which signaled two additional cuts in 2025. Market pricing now heavily favors another Fed rate reduction in October, reflecting investor anticipation of ongoing monetary easing, even amid cautious Fed messaging emphasizing inflation control and restrictive policy settings.

Commodities

Gold steadied near record highs on expectations of further U.S. rate cuts and a weaker dollar ahead of Fed Chair Powell's speech. Oil prices fell for a fifth session amid oversupply concerns after Iraq and Kurdish authorities agreed to resume pipeline exports via Turkey, restarting 230,000 bpd suspended since March 2023. The IEA forecasts rising global oil supply and a growing surplus into 2026 as OPEC+ expands output. Market risks remain from potential EU sanctions on Russian oil and Middle East tensions, while Saudi crude exports hit a four-month low in July.

PPC Limited (PPC) +3.41%

PPC's 'Awaken the Giant' turnaround strategy is gaining momentum, delivering over 20% EBITDA growth and a 2 percentage point margin increase to 15.9% for the four months ended 31 July 2025. SA and Botswana cement volumes rose 2%, with EBITDA margins improving to 17.7%. Zimbabwe's volumes surged 22%, aided by a new 30% import tariff, despite temporary margin pressure from plant shutdowns. Strong cash generation supports dividends, with US$20 million declared. The RK3 project remains on track, underpinning long-term growth and operational efficiency.

Renergen Limited (REN) +6.76%

Renergen advises a likely increase of at least 20% in loss per share (LPS) and headline loss per share (HLPS) for the six months ended 31 August 2025, compared to the prior period. This translates to a minimum rise of ZAR 0.0915 on a previous LPS/HLPS of ZAR 0.4573. The increase is driven by once-off transaction costs related to the ASP Isotopes merger, full commissioning depreciation of Phase 1 plant, previously capitalised costs now expensed, and higher interest expenses. Full results expected by 30 October 2025.

Choppies Enterprises Limited (CHP) 2.56%

Choppies reported a 14.7% increase in retail sales to BWP 9.1 billion, driven by 30 new stores, inflation, and 8.7% volume growth. Gross profit rose 16.8% to BWP 1.89 billion, with margins improving to 20.8% despite Liquorama facing margin pressure due to competition and illicit imports. Operating profit declined 5.1% to BWP 318 million, but adjusted EBIT grew 12.2%. Expenses rose 21.8% from store expansion and impairments. The Board declared a final dividend of 0.6 thebe per share, totalling 2.2 thebe for FY25.

York Timber Holdings Limited (YRK) +19.14%

York expects a substantial turnaround for the year ended 30 June 2025, with EPS forecast to increase from 12.97c to between 67.87c and 68.51c, and HEPS from 13.74c to 66.35c-67.03c. Core EPS loss is expected to narrow by up to 99%, reflecting improved operational performance. EBITDA (pre-fair value and impairments) is projected to rise 81-86%, while cash generated from operations is forecast to surge over 400% compared to the prior year. Results will be released around 30 September 2025.

Nvidia Corporation (NVDA) +3.97%

Nvidia will invest up to $100 billion in OpenAI, securing non-voting shares and supplying advanced data centre chips, reinforcing its role as a key AI infrastructure provider. The agreement includes deployment of at least 10 gigawatts of Nvidia systems by late 2026, supporting OpenAI's computational needs. The $10 billion initial investment funds OpenAI's chip purchases, potentially raising antitrust concerns given Nvidia's dual role as investor and supplier. This partnership strengthens both companies' competitive positions amid intensifying AI sector rivalry, with final terms expected shortly.

Pfizer Inc. (PFE) +0.04%

Pfizer announced its acquisition of Metsera in a deal worth up to $7.3 billion, aiming to strengthen its position in the rapidly expanding obesity treatment market, projected to reach $150 billion by the early 2030s. Metsera's pipeline includes MET-097i, a GLP-1 injectable, and MET-233i, a monthly hormone therapy showing promising early-stage data. This follows Pfizer's setbacks with its own danuglipron weight-loss pill. Pfizer will pay $47.50 per share plus up to $22.50 per share in milestones, with the deal expected to close in Q4 2025.

Oracle Corporation (ORCL) +6.31%

Oracle has appointed Clay Magouyrk and Mike Sicilia as co-CEOs, succeeding Safra Catz, who transformed Oracle into a cloud leader over 11 years, driving its market cap close to $1 trillion. Sicilia manages cloud applications and AI products, while Magouyrk oversees cloud infrastructure. Oracle's shares have surged 85% this year, outperforming rivals Microsoft and Alphabet, fuelled by major AI contracts, including a $300 billion deal with OpenAI. The firm's cloud infrastructure business is forecast to exceed half a trillion dollars, reinforcing its pivotal role in AI and U.S. data security.

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