CE 100 Index Slips 2.5% as Chip and Payment Names Lose Ground

The end of March and the first quarter proved rough sledding for the CE 100 Index, as all pillars slipped through the last full trading week of the month.

The overall Index was off 2.5%, almost in lockstep with the tech-heavy NASDAQ Index, and now stands 4.2% lower for the year-to-date performance.

The Enablers segment of the CE 100 Index dipped most visibly among the segments, down 4.1%.  Meta’s stock lost 6.1%. As reported here, Meta Platforms is seeking a ruling from a U.S. federal court, asserting that its use of copyrighted books by authors such as Ta-Nehisi Coates and comedian Sarah Silverman to train its artificial intelligence system did not violate copyright law. Meta is claiming the practice falls under “fair use,” a legal doctrine that allows for limited use of copyrighted material without permission under certain conditions.

Nvidia shares lost a similar amount on the heels of news earlier in the month that it will procure “several hundred billion” dollars’ worth of chips and other electronics manufactured in the U.S. over the next four years, per comments from CEO Jensen Huang.

Payment Names Give Up Ground as Block Sheds Staff

Payments related to names, as a group in the CE 100 Index, were 3.4% lower through the week.

Visa shares were among the few players in the green, up 2.1%.  The payment network said that it has inked a referral agreement with virtual care and spend management platform Extend.  Through the joint effort, firms defined by Visa as emerging middle-market companies can use virtual cards to manage spending, fight fraud and close their books more quickly.

PayPal’s stock lost nearly 8%.  The company said it passed $30 billion in global loan originations for small businesses since launching its first merchant lending solution in 2013. That volume was tied to 1.4 million loans to more than 420,000 business accounts globally, the company said.

Affirm’s 7.5% decline came after the BNPL provider said it has struck a new agreement with J.P. Morgan Payments.  The partnership will mean that Affirm’s solutions become available to merchants on the J.P. Morgan Payments network in the U.S., letting them offer BNPL plans at checkout. The partnership comes nearly a week after Affirm announced it would begin furnishing information about all of its payment plans to Experian starting April 1.

Also within the payments segment, as tracked by the CE 100 Index, Block shares gave up just under 10%. Citing “performance issues” and strategy, the company said that it would lay off 8% of it staff.  Block will also lay off 80 managers as it tries to “flatten” its organization, he added.

“None of the above points are trying to hit a specific financial target, replacing folks with AI or changing our headcount cap,” the company said in a statement. “They are specific to our needs around strategy, raising the bar and acting faster on performance, and flattening our org so we can move faster and with less abstraction.”

A Few Gains

Tesla was another one of the (relatively few) companies in the CE 100 Index to gain momentum, up 6%.

In an announcement this past week, Tesla said it is entering the dining business, preparing to open a drive-in restaurant in Los Angeles.  This new location would allow diners to eat and watch movies on an outdoor screen while they charged their electric vehicles.

Elsewhere, Ocado’s 13.7% surge came after a Wall Street upgrade, as noted by sites such as Investing.com.  J.P. Morgan upgraded the name from neutral to overweight as performance and EBITDA (a rough calculation of cash flow) improved.