US tech giant Apple is contesting the classification of some of its flagship services in a new EU law.
It comes ahead of Wednesday’s publication of the first list of services to be regulated by the Digital Markets Act, which is aiming to promote market openness and competition.
The legislation will impose new responsibilities on Apple and the other tech companies affected, including to data share and link to competitors.
“All large US tech companies, including Amazon, Google and Meta, will have several of their services regulated under the DMA, people familiar with the legislation said. Chinese-owned TikTok will also be part of the list,” the FT reported.
Meanwhile, the European Union has successfully forced Apple and other brands to adopt USB-C by the end of 2024. It will likely lead to Apple’s iPhone 15 series sharing a port with Android devices when they're announced next week.
Another US tech major not so happy with the EU’s new Digital Markets Act is Microsoft, which is also contesting the classification of some of its services in the legislation.
Platforms with an annual turnover of more than €7.5bn (£6.42bn), a market cap above €75bn and active monthly users in the EU of 45 million will fall under the rules.
According to the FT, Microsoft had rejected the idea that its Bing search engine should be subject to the same obligations placed on its much larger rival, Google Search.
If it turns out it is covered by the new rules, Bing would need to give users a choice of other search engines, including Google’s.
However, the FT further reported that advisers have argued in Microsoft’s defence that this could end up boosting Google’s market share.
Under the EU law, Amazon, Google and Meta, will also reportedly have several of their services regulated.
Shares in Microsoft have gained roughly 36% since the start of 2023 but have declined since a peak seen on 18 July by about 10%.
Novo Nordisk (NVO)
Investors will also be keeping across shares in Novo Nordisk after it became Europe’s most valuable company, according to Monday’s closing prices, surpassing luxury goods conglomerate LVMH.
“This is thanks to hype around the Danish pharma company’s blockbuster appetite-suppressing weight-loss drug Wegovy which is now set to penetrate the UK market. It has already attracted a lot of interest with strong demand landing tens of thousands of people on the waitlist,” Victoria Scholar, head of investment at Interactive Investor, said.
“Obesity is a major health threat in the UK, the US, and other countries, contributing to complications like diabetes and heart disease, which is why there’s so much excitement about this drug,” she added.
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Scholar further noted how shares in Novo Nordisk saw a rally in August following a landmark study suggesting that the drug could reduce the risk of cardiac events like heart attacks and strokes by 20%.
“The stock has surged around 40% so far this year and more than 290% over the past five years, making it a standout stock market winner for short and long-term investors alike.” Scholar said.
Shares in Ashtead were down nearly 2% on Tuesday despite the company sharing upbeat financial results with investors.
Group revenue increased by 19%, within which the US unit posted gains of 22%, while operating profit grew by 18%. Moreover, pre-tax profit grew by 11% alongside further strong investment in the business in an attempt to consolidate the current strength of the trading position.
Furthermore, some $1.1bn (£0.88bn) was spent on the business, with $361m on nine bolt-on acquisitions, while 40 locations were added in North America.
Richard Hunter, head of markets at Interactive Investor, said expansion into North America is clearly paying dividends in both the US and Canada.
“The receding risk of recession in the States also feeds into a positive narrative, while the equipment rental space not only continues to grow with revenues up by 14% but the group estimates that there could be much more to play for.
“The business is a cyclical one which brings its own risks, especially in the event of any weakening in demand and the negative response to the numbers echoes the wider market weakness at the open. Even so, for the moment, Ashtead is making hay while the sun shines and momentum is building.”
Hunter also noted that Ashtead’s shares have risen by 26% over the last year, as compared to a gain of 2.3% for the wider FTSE 100, with the market consensus of the shares as a buy fully likely to remain intact following this update.
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