Earnings season kicks off

The Amsterdam AEX seemed to be keeping its powder dry for the start of the earnings season. Since last Friday morning, the AEX index has recorded a small loss of around 0.45%. This Friday morning, the index is trading at around 957 points. At the time of writing, the EuroStoxx 600 stands at 571 points. This represents a minimal gain of around 0.1% compared to last week's price. The stocks gaining the most this week are Besi (11.1%), BAM (4.7%) and Alfen (4.5%). Many other shares also ended the week in the green. The stocks with the largest declines were Exor NV (-8.0%), Galapagos (-7.9%) and Pharming (-7.4%).

BE Semiconductor Industries

Besi benefited this week from the billion-dollar deal between OpenAI and AMD. AMD will supply a large quantity of advanced chips to OpenAI, which will also become a co-shareholder in AMD. The chips to be supplied are considered essential for the further development of artificial intelligence (AI). They are mainly produced using Besi technology. More than a million chips are expected to be needed, and Besi will supply the hybrid bonding equipment for this. This means that demand for Besi's machines will increase, which is positive for the company. In the same week, news followed that Besi, together with Applied Materials, has launched a Kinex tool that is expected to make a big difference in hybrid bonding.

Hybrid bonding is a new technique in which chip components are fused directly together, resulting in higher connection density and better performance. Besi is a leading player in this field and collaborates with Applied Materials. This technology is more efficient than the old wire bonding and ensures lower power consumption and superior chip performance.

Fagron

Healthcare company Fagron was the first listed company to publish its third-quarter figures. Management announced that turnover grew by 6.4% to EUR 228.2 million in the third quarter, exceeding analysts' expectations. Strong growth was seen particularly in Europe, the Middle East and Africa (+17%) and Latin America (+9%), while North America showed a decline of more than 3%.

An important development was the inspection by the FDA (the US Food and Drug Administration) of Fagron’s production facility in Wichita. The FDA confirmed that corrective measures had been effective and the FDA approved the planned capacity expansion. The expansion is expected to generate additional revenue of more than EUR 21.5 million per year. Revenue for the third quarter in North America was over EUR 93 million. Organic revenue growth was 5.7%, and excluding the diabetes drug GLP-1, it was even 8.5%. The Essentials and Brands segments grew by double digits, while Compounding Services (personalised medicine delivery) declined slightly. Fagron expects turnover of EUR 930 to 950 million in 2025 and a slight increase in profitability. The company’s medium-term objectives remain unchanged.

Steel companies

Furthermore, both steel companies were in the spotlight this week due to the European Commission's decision to protect its own steel industry, just like the United States. Currently, the steel sector in Europe is facing high energy prices, oversupply from other parts of the world and high labour costs. In the current proposal, the amount of steel exempt from import duties will be reduced by 50% to 18 million tonnes. In addition, the duty on steel imported above that amount will double from 25% to 50%. The steel industry was very pleased with this proposal and welcomes it. Investors also appreciated this news and pushed both shares significantly higher in a reasonably stable index. This proposal will first have to be approved by the European Parliament and the EU Member States. The duties are expected to come into effect at the end of next year.

Next week, the reporting season will kick off in earnest. TomTom will start the week, followed later in the week by ASML, Fastned, Sligro Food Group and others.