Trading update : 11 November 2025

The AI arms race is driving billions in deals for chip access, with the US and China going head to head for global dominance! While the spending taps are open and valuations keep notching up fresh records, a top Goldman Sachs partner is warning that a major stock correction is overdue. The fact that Warren Buffett’s cash pile just hit a mind-boggling record might suggest some caution is needed based on prevailing valuations.

Hey, big spenders!

The demand from OpenAI for compute capacity is insatiable, with the company signing a seven-year, $38 billion deal with Amazon (AMZN-NASQ)) to access Nvidia (NVDA-NASQ) chips via their cloud infrastructure. Microsoft (MSFT-NASQ) also signed a $9.7 billion deal with Australia’s IREN to access AI computing power and energy over the next five years.

AI arms race

Nvidia (NVDA-NASQ) CEO Jensen Huang told the Financial Times that China will beat the US in the AI race in part due to lower energy costs and looser regulations. China is also requiring new state-funded data centres to swap foreign AI chips with locally designed alternatives, reported Reuters, reflecting Beijing’s longstanding desire to reduce the country’s dependence on American technology, including Nvidia semiconductors.

Cash is king

As Warren Buffett’s handover draws closer, Berkshire Hathaway (BRK.B-NASQ) reported Q3 2025 operating earnings up 34% year-on-year, with the insurance segment the strongest performer. The rail business has also witnessed a turnaround. The company’s cash pile hit a record $381.7 billion, with no immediate plans for stock buy-backs. Management is also taking a conservative view on deploying this capital on current valuations.

Correction coming

Goldman Sachs partner Rich Privorotsky believes stocks are overdue a correction, and the only question relates to its magnitude and timing. Bloomberg reported that Privortotsky told clients in a note: “There are just a lot of things about this market that haven’t been adding up for a while.” Among his concerns, he lists signals, including US bank reserves falling below $3 trillion, the low equity market breadth, a slide in consumer sentiment, a drop in restaurant stocks, and Michael Burry disclosing bearish wagers on Nvidia (NVDA-NASQ) and Palantir (PLTR-NASQ).

Less than uber results

Despite reporting a 21% bump in total gross bookings year on year, which is a decent number, Uber (UBER-NASQ) stock fell -5%. Interestingly, food delivery gross bookings grew +25%, outpacing ride hailing (+21%). However, earnings were flattered by a big non-cash tax benefit and free cash-flow generation was poor.  

Margin compression

Shopify (SHOP-NASQ) stock fell -7% after reporting a big +32% kick in gross merchandise volume (GMV), with operating income up +21%. However, the retail market is worried about gross margin compression, a big kick in bad debts on their loan book and muted guidance.

Stream on!

Spotify (SPOT-NASQ) results were under scrutiny as founder and CEO Daniel Ek transitions out of his role. The company generally delivered, meeting all KPIs or exceeding previous guidance. Monthly active users and premium subscriptions continue to grow at double-digit pace, while gross margins remain strong, and the company generated record free cash flow. Ad revenue was the only weak point due to pricing pressure.

Vroom, vroom

New vehicle sales in South Africa remained strong, but are slowing. According to the latest Naamsa figures, passenger car sales rose +16% year on year, but this was the weakest growth this year. For the first time in a while, the light commercial vehicle (LCV) category (bakkies and taxis) grew faster than passenger vehicles, rising +24%. The bug three Motus Holdings (MTH-JSE) brands of Hyundai, Kia and Renault were barely ahead at +2%. However, Kia sales were very strong at +20%. Renault is still lagging at -17%, while Hyundai remained solid at +4%.

Knock-on effects

According to Old Mutual Investment Group, SA’s commodity windfall is expected to boost banks, retailers and property stocks, as stronger prices improve the fiscal outlook and support lower interest rates. Bloomberg reports that the surge in precious metals prices has already lifted corporate tax receipts and dividends, creating positive second-round effects for the consumer economy. The improved fiscal outlook could pave the way for another interest rate cut and possible credit rating upgrades. Lower borrowing costs should lift interest rate-sensitive sectors, such as banks and property.

Please pay me!

Vodacom Group (VOD-JSE) announced that it has settled a case with Kenneth Makate, a former employee who claimed compensation for the Please Call Me service that he proposed more than two decades ago. The board, majority-owned by Vodafone Group Plc (VODL-TRQX), agreed to pay an undisclosed amount to end the long-running dispute.

Sector focus: Fintech

The continued strong performance of the Pepkor (PPH-JSE) fintech division highlights that there are pockets of the local economy that continue to experience proper growth. Expect to see continued consolidation as banks, mass-market retailers, and mobile network operators look to shore up their capabilities to stave off competition, respond to the continued transition to a cashless economy, and create their own closed-loop financial ecosystems.

Stock focus: Redefine

Redefine (RDF-JSE) released another solid earnings report for FY25. The REIT delivered solid growth in its key profit metric, Distributable Income Per Share (DIPS), which grew +4.8% to 52.4 cents per share, up from 50 cents last year. The Dividend Per Share (DPS) paid also grew significantly, up +7.9% to 45.8 cents (up from 42.5 cents last year). Management struck a confident tone, guiding for future DIPS growth of 4-6%, which is a strong signal. From a stock valuation perspective, Redefine looks very attractive compared to its competitors. It offers a high projected 12-month forward yield of 10.7% and a dividend yield of 9.4% (based on future forecasts). Furthermore, the stock is currently trading at a large 36% discount to its Net Asset Value (NAV), which is better value than its peers. Essentially, you’re getting a higher income yield and buying the stock at a much cheaper price relative to the value of its assets compared to the average company in this sector.