Top US stocks to watch: Xpeng, Microsoft and American Airlines

Xpeng completes its dual-listing in Hong Kong, Amazon and Microsoft continue to battle over a $10 billion contract, American Airlines says people are ready to travel again, Didi shares slide further, and Planet Labs, Heliogen and Authentic Brands Group all plan to go public.

USA (1)

Xpeng

Chinese electric carmaker Xpeng completed its dual-listing in Hong Kong on Wednesday, closing flat at HKD165, in-line with its listing price.

Xpeng currently sells the G3 smart SUV and the P7 super-long range smart sedan and has said it plans to rollout new models targeted at the global market. It currently produces from two factories in China and is planning to build a third in the country.

Xpeng listed American Depository Receipts (which are equal to two ordinary shares) in New York for around $15 each last year and the stock has since jumped to over $44 today. The dual-listing will allow Chinese investors to gain exposure to the stock through the Stock Connect programme that links markets between mainland China and Hong Kong.

Microsoft and Amazon

The US Defense Department has cancelled its $10 billion JEDI cloud computing contract that was awarded to Microsoft back in 2019 and is set to replace it with a new deal that will invite a new bid from Microsoft and from other providers including Amazon.

The department said the contract ‘no longer meets its needs’ and will be replaced by the Joint Warfighter Cloud Capability contract that will be put out for tender, although it is unclear what other companies could handle such a large contract apart from Microsoft or Amazon.

Notably, Amazon filed a lawsuit after losing the JEDI contract to Microsoft that alleged the then-president Donald Trump had improperly influenced the decision, having butted heads with Amazon and its CEO Jeff Bezos on several matters. Both Microsoft and Amazon hit new record highs during yesterday’s trading session.

American Airlines

American Airlines carried almost 2.7 million passengers on over 26,000 flights between July 1 and July 5, according to a memo seen by Reuters.

That represents twice as many flights and almost three times as many passengers than it carried in the same period the year before as it continues to see a recovery in both domestic and international travel as vaccine programmes rollout.

‘After a challenging year, this weekend proved that people are ready to travel again and that the American team stands ready to deliver,’ said chief operating officer David Seymour, according to the report.

Didi

Chinese ride-hailing firm Didi remains in focus today following the disastrous start following its blockbuster IPO last week.

The stock has lost over 20% in value since news that its app had been taken down in China whilst an investigation is conducted by the country’s cybersecurity regulator, ending just shy of $12.50 yesterday – below its $14 IPO price. The stock was trading up to 4% lower in premarket trade today.

Reuters reported that two major apps in China, Ant Group’s Alipay and Tencent’s WeChat, had suspended offering Didi’s app to new users within their own platforms, citing unnamed sources.

Nikola

Shareholders in electric truck maker Nikola rejected proposals to award compensation to named executive officers at its meeting on June 30, a filing revealed yesterday, as investors make known their dissatisfaction with plans to dish-out hundreds of millions to the board.

A total of 99.4 million votes were cast in favour of the compensation compared to just 7.8 million against, but that was trumped by the 120.1 million abstained votes. Importantly, the vote is not binding but Nikola has said it intends to keep allowing advisory votes on an annual basis.

The compensation covers salary, bonus and stock awards to six directors, including a $159 million payment to chief executive and president Mark Russell and a payout of almost $80 million for chief legal officer Britton Worthen.

NVIDIA

NVIDIA has launched one of the world’s fastest supercomputers in the UK to outside researchers to provide a boost to progress in areas spanning digital biology to life sciences.

The company spent around $100 million on developing the supercomputer, which is now available to a number of NHS trusts, universities and commercial firms including AstraZeneca and GlaxoSmithKline. NVIDIA said the supercomputer could ‘create an estimated value of £600 million over the next 10 years’.

‘Cambridge-1 will empower world-leading researchers in business and academia with the ability to perform their life’s work on the UK’s most powerful supercomputer, unlocking clues to disease and treatments at a scale and speed previously impossible in the UK,’ said chief executive Jensen Huang.

Comcast

Comcast said new movies from Universal Pictures will be exclusively shown on its Peacock streaming service within four months of debuting in theatres starting next year.

The deal will also include films from DreamWorks Animation and Illumination, both of which specialise in animated productions. No financial details of the deal were disclosed.

Welbilt

Foodservice equipment maker Welbilt said the takeover offer received from Italian outfit Ali Group is ‘superior’ to the rival bid on the table from The Middleby Corp.

The Middleby Corp had made an all-stock offer that valued Welbilt at $2.9 billion before Ali Group tabled an-all cash bid of $23 per share before raising it to $24, valuing the firm at $3.4 billion. Welbilt said it has now terminated the agreement with Middleby and enter into definitive talks with Ali Group.

Planet Labs

Planet Labs, the owner of the world’s largest fleet of Earth imaging satellite, has announced it plans to go public by merging with SPAC dMY Technology Group later this year to raise around $545 million and earn an initial valuation of around $2.8 billion.

The company, backed by Alphabet, said the proceeds would allow it to expand its operations and services. It currently has around 600 customers that use its services for everything from managing farmland and forests to creating digital maps and and helping governments with security. It said it generated over $100 million in revenue during its last financial year to the end of January.

‘At Planet our goal is to use space to help life on Earth. We have this huge new dataset -- an image of the entire Earth landmass every day -- which we serve up via a Bloomberg-like terminal for Earth data, making it simple to consume and expanding reach to potentially millions of users across dozens of verticals,’ said co-founder and chief executive Will Marshall.

Authentic Brands Group

Authentic Brands has filed for an IPO on the New York Stock Exchange that could earn the owner of brands such as Forever 21 and Brooks Brothers at over $10 billion.

The company owns over 30 apparel and sports brands and has grown significantly through a number of acquisitions over the last decade. It delivered net income of $295 million in the first quarter of 2021 – more than it delivered in the entirety of 2020.

Heliogen

Heliogen, a provider of AI-enabled solar power, has announced plans to go public by merging with SPAC Athena Technology Acquisition Corp to raise $415 million and earn an initial valuation of $2 billion.

The company said its concentrated solar power plants can ‘revolutionize the energy market’ by addressing issues with intermittency through storage. It plans to use the proceeds to expand manufacturing and to develop the next-generation of tech.

Ultimately, it believes its solar technology can provide 24-hour reliable power and allow it to finally take over from fossil fuel-derived electricity. Heliogen is in the process of commercialising its technology and is initially targeting industrial, mining and energy companies.

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