News and analysis

VeChain (VET) is down 4.7% this week, trading at $0.02100, underperforming the broader crypto market as Bitcoin (BTC) continues to rally with a 3.2% gain to over $70,000. VET has remained within a tight trading range of $0.02000-$0.02500 over the past three months, and it is currently nearing the lower support of this range. A rebound from this level could occur if buying interest strengthens.

The recent launch of VeChain's Blockchain-Powered Digital Passport has bolstered security, a positive development for long-term utility. However, this feature also introduced additional complexity for users, potentially impacting adoption and putting pressure on VET's price.

One of the major pharmaceutical manufacturers in the world, which showed 10x growth in value for the last 5 years, dropped by double digit percentage this week. Eli Lilly lost more than $200 per share, or nearly 20% of its peaking market caps, compared to the company's all-time highs at $972.5 in August. This story gives us a tremendous opportunity to acquire a clearly attractive asset at a very good price. A fast bounce back to the northern border of the new range above $850, from the opening price below $800 on October 30 with local intraday dips detected at $769.75, freshly confirmed a flurry of interest among the investing crowd for a stronger recovery potential. At the same time, a wide daily range already in the first hours after Eli Lilly's earnings' report gives everyone additional time to choose a better price to enter the market, as we may expect more dips below $800 or even an attempt to slide further with an exclusively brief visit to the levels between $700 and $750, where risk-on strategies may even strengthen bullish positioning.

The reason behind Eli Lilly's sharp plunge was that its weight-loss drug sales substantially missed overly optimistic expectations. Analyst polls forecasted $4.20 billion for quarterly sales of diabetes treatment Mounjaro and $1.69 billion for Zepbound, which is another brand name for the same medication tirzepatide, regulatory approved for weight management in the U.S. and some other countries. Consensus saw the drug may provide the company with $19 billion of revenue before the end of this year. Now the market found that this would not happen, because sales of Mounjaro from July to September was $3.11 billion only, while sales of Zepbound were $1.26 billion. Of course, the firm posted EPS (earnings per share) of $1.18 only for Q3, failing much of the consensus at $1.45. Its total revenue came in at $11.44 billion instead of $12.09 billion, even though the number rose by 20% YoY.

Lilly commented this still reflected "continued strong demand", yet had to cut its full-year profit projection from the previous range between $16.10 and $16.60 per share to a much lower range between $13.02 and $13.52. Eli Lilly tried to reference $2.8 billion acquisition-related charges in the third quarter, yet also "higher manufacturing costs" was cited as well. The company kept the lower end for supposed sales range at $45.4 billion but lowered the upper end by $600 million to $46 billion.

As to the two tirzepatide-based drugs, Eli Lilly's CEO David Ricks admitted "there is an excess supply... but we haven't been stimulating demand the way we had originally planned," adding that his company delayed plans to advertise weight-loss drug Zepbound while also postponing international launches of production and distribution to focus on "increasing inventory levels in the U.S." Thus, sales of both Mounjaro and Zepbound "decreased by mid-single digits", derailed by "inventory changes" after Eli Lilly reportedly invested $7 billion in its Indiana site and facilities in Ireland to expand production. From our point of view, this may be a planning error that led to a partial deflation of a vast bubble of expectations, but it does not mean that the whole project was something like a big bubble. Discounting market price may reflect only a temporary and rather small trouble with marketing promotion plans for very popular new products, which are still in a bid demand. And so, a 20% or 25% correction of market value could be enough to revive the investment interest for the stock. Eventual recovery to the levels above $950 looks almost inevitable.

All eyes turn to the next $500 target when discussing Microsoft's ability to accelerate its long-term rally on markets. In this context, a moderate price gains were initially detected on Wednesday at the very first moment after announcing another historically record levels at $3.3 of quarterly profit per share on even better than expected 16% annual surplus in sales, also beating all-time highs at $65.6 billion from July to September vs the most encouraging peak at $64.7 billion in the previous quarter. Azure, Microsoft's cloud business, added 33% YoY above consensus estimates of around 32%. However, the company's own guidance for potentially slowing cloud business progress in the current quarter was a key to a nearly 4% drop in market values afterwards, so that immediate price corrections hit $415 per share in the pre-market trading activity on the last day of October, vs $432.50 as the last daily close before the news.

The unfortunate sentence by Microsoft chief financial officer Amy Hood, which a picky crowd didn't like, foresees fiscal second-quarter Azure revenue growth of 31% to 32%, instead of 32.25% expected on average by the Wall Street's pool of analysts, after it’s slowed from its maximum speed of 35% just one quarter before now. She added that the CapEx (capital expenditures), which already came at $20 billion per quarter, is going to expand more due to ongoing investments into building out more powerful data centres based on AI capacities. From our point of view, large cash investments to consolidate the clear success of Azure cloud division's closer partnership with ChatGPT-maker OpenAI seems justified as the entire pattern of previous expenditures of this kind has really paid off. Moreover, Microsoft is happily optimizing costs in other parts of its business, which is justified by an overall increase in marginality.

Therefore, we feel that a shy and jumpy wing of the market, fearing a decrease in Microsoft profits because of somewhat rising costs for artificial intelligence, which is undertaken by the flagship of the industry, is surely not the majority. All temporary price dips, which are still leading to a discounted value of the world's number one company in terms of market caps, will be repurchased very soon, if not during the next couple of weeks. The negative dynamics may be short-lived, even though the technical correction has some chance to retest a one-month low at $408.17 or even dive slightly below a two-month low at $400.80 under certain circumstances, as the move down may coincide with a wave of U.S. election vulnerability. In the same way, a part of investors was focused on elevated AI expenditures at Meta Platforms, when the Facebook father Mark Zuckerberg noted the spending was showing "strong momentum", when highlighting his brainchild's "significant" surge in capital investments in 2025 to run the wider and modernized AI infrastructure. Yet, we continue to believe in the new heights well above $600 for Meta, as well as returning to an uphill climb to the round figure of $500 by Microsoft.

Monero (XMR) is down by 1.6% to $160.74, underperforming the broader crypto market, while Bitcoin (BTC) has gained 6.9% to $72,656. XMR's decline follows Kraken’s decision to delist the token for its European users, with any remaining XMR on the exchange set to be converted to Bitcoin at market rates by January 6.

This isn’t the first instance of Monero facing delistings, so there’s no immediate need to sell your XMR holdings. Price action shows signs of recovery, and a breakout from the current ascending triangle pattern could potentially drive prices 25-30% higher, signaling a promising rally ahead.