5 Key Points to Know Before the Stock Market Opens

June 26, 2023: 5 Key Points to Know Before the Stock Market Opens

Lucid Soars on Aston Martin Deal: Lucid, a U.S. electric vehicle maker, experienced a significant share surge during pre-market trading. The company announced a $232 million deal with luxury automaker Aston Martin. As part of the agreement, Lucid will acquire a 3.7% stake in Aston Martin and share its “high-performance technology.” This partnership will also provide Aston Martin access to Lucid’s EV battery and powertrain technology.

IBM’s Potential Acquisition of Apptio: IBM, a technology giant, is reportedly nearing a deal to acquire software company Apptio for approximately $5 billion. This acquisition would enhance IBM’s automation capabilities and support its transformation into a cloud and artificial intelligence business. The news caused a slight dip of 0.5% in IBM shares during pre-market trading[2].

Tesla Faces Downgrade from Goldman Sachs: Tesla, the electric vehicle manufacturer, experienced a 3% decline in its shares during pre-market trading following a downgrade by Goldman Sachs. The investment bank lowered Tesla’s rating from buy to neutral, citing potential challenges in new vehicle sales in the coming months. Several other analysts, including Barclays, Morgan Stanley, and DZ Bank, downgraded the stock last week for similar reasons.

UBS Downgrades Alphabet: Analysts at UBS downgraded Google’s parent company, Alphabet, from buy to neutral. Although they don’t consider ChatGPT a threat to Google’s search dominance, the report highlights limited growth upside and medium-term revenue risks for Alphabet, mainly as it invests more in artificial intelligence. UBS suggests investment opportunities lie with companies like Amazon and Meta (formerly Facebook). Alphabet shares experienced a 1.5% decline in pre-market trading.

Goldman Sachs Implements Cost-Cutting Measures: Goldman Sachs is laying off 125 managing directors across its international operations, including some in the investment banking division. This move is part of the bank’s ongoing cost-cutting efforts, prompted by decreased business in mergers and acquisitions and initial public offerings. Due to this announcement, Goldman Sachs shares were down 1.5% in pre-market trading.

Takeaway:

Lucid’s deal with Aston Martin marks a significant milestone in the electric vehicle industry, as both companies will benefit from shared technology and expertise.

IBM’s potential acquisition of Apptio showcases its commitment to expanding automation capabilities and positioning itself as a cloud and artificial intelligence solutions leader.

Tesla’s downgrade by Goldman Sachs and previous downgrades by other analysts suggest potential challenges for the company’s vehicle sales and market performance.

UBS’s downgrade of Alphabet reflects a cautious outlook on its growth potential, particularly in the context of increased investments in artificial intelligence by competitors like Meta and Amazon.

Goldman Sachs’ layoffs indicate the bank’s continued focus on cost reduction and adapting to changing market conditions.

Please note that stock market conditions can change rapidly, and it’s essential to consult up-to-date financial information and expert advice before making any investment decisions.