After AI stocks fell sharply last week against the backdrop of the US midterm election results, this week marks the peak of the earnings announcement season, and stocks of companies that announced earnings upgrades and share buybacks surged. Toyota Motor in particular recorded a sharp gain.
Last week, the plunge in AI stocks spread amid the impact of the US midterm elections, and AI-related stocks, including data-center-related names, fell sharply. Kioxia Holdings, Furukawa Electric and Advantest posted double-digit declines from the previous weekend's close, and reports indicated that AI-related stocks had a significant impact across the market.
With earnings announcements reaching their peak this week, some believe that share prices of companies that raised their earnings forecasts and increased share buybacks are likely to be bought. Toyota Motor was particularly strong, announcing an earnings upgrade and an increase in its share buyback on the 5th and recording a 16.7% gain from the previous day. It was up 8.7% for the week and performed relatively well alongside other domestic-demand and defensive stocks.
Although the sharp decline in resource stocks and the impact of lower crude oil prices were evident to some extent, companies that expanded their buybacks or strengthened shareholder returns through dividends attracted market attention and drove share-price rebounds. Mitsubishi Corporation, for example, rose 3.2% as other companies posted notable declines.
The outlook remains uncertain depending on developments in the US market, but some observers point to the possibility that buying of domestic-demand and high-dividend stocks will continue as the earnings announcement season subsides.
Related articles on ToshiL continue to cover earnings announcements, dividends and share buybacks, and some observers believe that market developments should continue to be monitored.