What goes up usually comes back down. And, after months of AI-fuelled euphoria, even Elon Musk’s SpaceX came back down to earth this week.
Wall Street copped a bruising, with the tech-heavy Nasdaq shedding more than 1000 points and finishing the week down about 4 per cent.
Oddly enough, the selling appears to have started in South Korea, where regulators reportedly began raising concerns over the rapid growth of leveraged exchange-traded funds linked to the Korean index.
Those products only hit the market last month but have quickly become a favourite amongst speculators, with the Korean index surging almost 94 per cent this year, driven largely by semiconductor giants Samsung and SK Hynix. Concerningly, the two companies now account for more than half of Korea's market value. This was enough for overseas investors to start taking profits on Tuesday and head for the exits.
As always, when the United States sneezes, Australia catches a cold; however, it would seem this time the virus has begun in Korea.
Energy markets also shed a boatload, as shipping through the Strait of Hormuz started to return to normal and, as supply fears eased, oil slipped back below US$70 (A$106) a barrel.
Lower oil prices usually bode well for inflation; however, the US Federal Reserve certainly isn't ready to loosen the purse strings. A strikingly hawkish tone warned that inflation remains stubborn enough to justify keeping interest rates higher for longer.
The hawkish backdrop proved particularly painful for precious metals. Gold continued giving back a sizeable chunk of this year's extraordinary gains, briefly slipping below US$4000 (A$6080) an ounce after reaching around US$5500 (A$8360) only a few months ago, down 27 per cent.
Nor was the pain confined to gold. The broader commodity complex spent much of the week under pressure, even as another strategic mineral dispute quietly escalated in Asia. China's exports of tungsten to Japan have reportedly slowed to a trickle amid an ongoing diplomatic dispute, leaving manufacturers scrambling for alternative supplies. Although tungsten may not receive the headlines of lithium or copper, it remains one of the world's most strategically important metals, underpinning everything from cutting tools and aerospace components to armour-piercing defence systems. The silvery-grey metal has now risen more than 1000 per cent in the last couple of years.
Back in Canberra, the government-induced inflation sickness of Anthony Albanese and Treasurer Jim Chalmers showed no signs of slowing down, after securing the Greens' support to advance their anti-ambition budget agenda. Yet another dose of spending and redistribution is apparently the answer - because why should taxpayers keep their hard-earned money anyway?.
There was more bad news for biotech companies on the Aussie bourse, with Cynata Therapeutics shedding 96 per cent of its share price this week. The sector has copped an absolute lashing over the last year. However, the best-performing periods in markets have historically always been the year after a sell-off.
That left this week's Bulls N' Bears Runners reflecting a market caught between fear and optimism. Commodities spent most of the week underwater, so it was service providers that dominated our list this time, with a rare back-to-back Runner of the Week taking the choccies yet again.
NORWOOD SYSTEMS LTD (ASX: NOR)
Up 269% (1.3c – 4.8c)
Bulls N' Bears Runner of the Week is AI-telecommunications play Norwood Systems for a second consecutive week after the company's extraordinary momentum refused to slow, rocketing another 269 per cent despite delivering no fresh market announcements.
The stunning follow-through suggests investors are still digesting last week's breakthrough agreement with a major UK telecommunications provider to pilot Norwood's OpenSpan AI Services Orchestration Platform and CogVoice AI applications.
What began as a modest £150,000 (A$285,000) pilot contract has quickly become a market-wide bet that the company may have secured a foothold in one of the world's largest telecommunications markets.
The relentless buying highlights a familiar theme in today's AI market. Investors appear far less interested in the contract's immediate value than in what it could ultimately become if the pilot succeeds and leads to a commercial rollout with a major carrier.
Norwood's OpenSpan platform, built on Microsoft Azure, acts as an orchestration layer linking traditional telecommunications networks to next-generation AI services. The software allows carriers to rapidly deploy features, including intelligent call routing, live translation, fraud detection, automated provisioning, call summaries and advanced network analytics without overhauling their existing infrastructure.
Whether the extraordinary re-rating proves justified remains to be seen. Still, with the stock having now delivered back-to-back monster weeks, the market is clearly valuing Norwood less as a small-cap software developer and more as a potential beneficiary of the global race to embed artificial intelligence into critical telecommunications infrastructure.
ORCODA LTD (ASX: ODA)
Up 260% (4.3c – 15.5c)
Taking out second place, this week is workforce logistics specialist Orcoda, which came up just short of Runners glory after locking in a multi-year contract with one of Australia's largest privately owned property development groups, Wagner Corporation.
The contract is for logistics and facility management services at Wagner’s Wellcamp Business Park in Toowoomba, a major infrastructure and development hub owned by the prominent Australian family company.
Based on workforce projections provided by Wagner, Orcoda estimates the contract will generate a whopping $8 million per annum in revenue over its term, a material number for a company that sported a market cap of just $8 million before the announcement.
The deal is anchored by Orcoda's flagship Contractor360 platform, a patented solution that automates and connects every step of the workforce ramp-up process. The platform uses conversational AI and real-time monitoring to connect site teams, contractors and suppliers, improving overall efficiency.
In a market often driven by hype, Orcoda’s run is a reminder that sometimes, good old-fashioned revenue and manual labour can turn a share price around in no time.
UNITY METALS LTD (ASX: UM1)
Up 193% (7.5c – 22c)
Our bronze medallist of the week was a bit of a “failure to fire” story. Gold explorer Unity Metals had no news for the week but began its run on Tuesday on the back of news from last Friday.
The company unveiled maiden assay results from its Ngot gold project in Cambodia, with drilling at the Rohav Mountain prospect returning promising early hits, including a 5-metre section at 1.8 grams per tonne (g/t) gold from 196m. The intersection struck 150m southwest of a previous result of 23m at 0.9 g/t gold, which featured a higher-grade zone of 6m at 1.9 g/t, indicating the project is starting to stretch its legs from the very first drilling program.
Unity says its geology is also looking the part, with mapping uncovering more stockwork veins hosted in diorite, believed to be the source of its gold mineralisation, which strengthens as it extends northeast beneath basalt cover.
Adding some serious nearology spice to the story, the project’s Ngot NE prospect is the closest prospect to Emerald Resources’ neighbouring Okvau mine, which hosts a 1.3-million-ounce gold resource.
A 2km-long gold-in-soil anomaly on Unity’s ground extends right up to the boundary of Emerald’s mining licence and is looking sweeter by the day.
The share price surge prompted a speeding ticket from the ASX on Monday, with the company confirming it was not aware of any unannounced information. Having only been listed in January, Unity is now pushing ahead with geophysics to pinpoint new drill targets at its promising early-stage Ngot.
VISIONFLEX GROUP LTD (ASX: VFX)
Up 154% (3.5c – 8.9c)
Rounding out our Runners is virtual healthcare provider Visionflex, which ran late this week after securing a $0.8 million contract with NSW Health to supply its advanced clinical hardware for remote examinations.
The agreement, which followed a competitive quote process, will see Visionflex deliver 127 general examination cameras and 162 video camera glass kits by June for a statewide virtual healthcare initiative.
Using high-quality medical examination kits, doctors and specialists can remotely assess a patient in real time via live video and connected diagnostic devices, taking Australia’s rapidly evolving telehealth sector to the next level.
The company says the government engagement reflects a growing adoption of its technology within large-scale virtual care programs and validates its capability to support enterprise healthcare deployments across Australia.
The group is focusing on expanding its recurring revenue base through such strategic healthcare partnerships.
With NSW Health now taking its temperature, Visionflex appears to have a healthy pulse. And as many on the market know, there are few things more lucrative than a chunky government contract to get a company’s share price moving.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Andrew Todd
