[Market Summary]
The major New York indices closed near flat as the Federal Reserve held interest rates steady. However, a surge in semiconductor stocks pushed the S&P 500 past the 7000 mark for the first time during intraday trading.
Dow Jones: 49,015.60 (+12.19 pts, +0.02%)
S&P 500: 6,978.03 (-0.01%)
Nasdaq: 23,857.45 (+0.17%)
Fed Decision: As expected, the Fed kept interest rates at 3.5%–3.75%, pausing the cycle of three consecutive rate cuts seen last year. The CME FedWatch tool now reflects an 88.6% probability of another freeze in March.
Semiconductor Rally: The Philadelphia Semiconductor Index jumped over 2%. Seagate soared 19% on strong AI storage demand, and Intel surged 11% on reports that Nvidia and Apple might shift production volume to Intel to reduce TSMC dependency.
[Featured Stocks & Analyst Reports]
■ Alphabet (GOOGL)
Chrome AI Integration: Google pinned the Gemini chatbot to the Chrome sidebar and introduced "Nano Banana" (image tool) and "Auto Browse" (AI agent).
Autonomous Tasks: Auto Browse allows the AI to independently perform complex web tasks like ordering groceries or searching for flights based on user commands.
■ Microsoft (MSFT)
Wisconsin Expansion: Local authorities approved 15 additional data centers in Mt. Pleasant. This allows Microsoft to recognize revenue already committed by OpenAI and other customers.
Historical Context: The site was originally intended for a $10B Foxconn plant promised in 2017, which failed to meet employment goals, leaving the town with $250M in debt.
■ Amazon (AMZN)
Layoffs: Announced a second round of cuts, laying off 16,000 corporate employees. Total layoffs since October now reach 30,000, roughly 10% of its office and tech staff.
Efficiency: The move aims to remove bureaucracy and reallocate resources toward massive AI investments.
■ Meta Platforms (META)
Bernstein Outlook: Maintained Outperform ($870 PT). While some perceive Meta as lagging in LLMs, analysts believe its massive user base and AI-driven ad solutions provide strong momentum.
Paid Subscriptions: Meta is introducing a paid tier while keeping free versions. The paid tier will include AI agent "Manus" and video tool "Vibes," targeting creators and high-activity users.
■ ASML (ASML)
Record Orders: Reported Q4 bookings of €13.2B, doubling Wall Street estimates.
Buyback & Layoffs: Announced a €12B share buyback through 2028, but also plans to cut 1,700 jobs, mostly at its Netherlands headquarters.
2026 Guidance: Projected annual revenue of €34B–€39B, with the midpoint exceeding analyst estimates.
■ Zoom Video (ZM)
Anthropic Investment: Wedbush raised its target to $110 (Outperform) following Zoom's expanded investment in AI startup Anthropic. This is expected to drive higher spending from existing customers via AI Companion 3.0.
■ Memory Sector (MU, SNDK, STX, WDC)
Mizuho Upgrades: Raised targets across the sector citing strong DRAM/NAND pricing.
Micron (MU): $390 → $480
SanDisk (SNDK): $410 → $600
Seagate (STX): $370 → $400
■ CoreWeave (CRWV)
Nvidia Partnership: Deutsche Bank upgraded to Buy ($140 PT) after Nvidia invested $2B to accelerate CoreWeave's "AI Factory" buildout. CoreWeave is expected to be among the first to bring new Nvidia architectures to market.
■ Health Insurers (UNH, CVS, HUM)
Medicare Shock: Cantor Fitzgerald views the recent dip as a buying opportunity for diversified insurers like UNH and CVS, though it remains cautious (Hold) on Humana (HUM) due to its high Medicare Advantage exposure.
Rate Freeze: The CMS announced a 2027 rate change of only 0.09%, effectively a freeze, while medical costs are rising at high-single to double-digit rates.
■ Corning (GLW)
Meta Deal: Morgan Stanley ($98 PT) highlighted the $6B contract with Meta for fiber optics through 2030, making Meta Corning’s largest AI customer.
■ Deere & Co. (DE)
US Manufacturing: Announced new facilities in Indiana and North Carolina (a $70M excavator plant using only US parts). President Trump praised the investment, signaling potential regulatory easing for tractors.
■ Starbucks (SBUX)
Earnings Beat: Reported a 4% jump in global same-store sales and a 3% increase in traffic—the first positive traffic turn in two years. North American holiday sales reached record highs.
■ GE Vernova (GEV)
Guidance Hike: Raised its 2026 revenue outlook by $3B to $44B–$45B, driven by surging power demand from data centers.
■ AppFolio / Affirm (AFRM)
Needham Upgrade: Upgraded Affirm to Buy ($100 PT) on its application to establish "Affirm Bank," which would allow access to deposit-based funding and reduce third-party risks.
[After-Hours Featured Stocks]
■ Tesla (TSLA)
Earnings Surprise: Beat estimates with an adjusted EPS of $0.50 (vs. $0.45 est) and revenue of $24.9B.
xAI Investment: The board approved a $2B investment in xAI, Elon Musk’s AI startup, as part of its transition into a "Physical AI" company.
Operational Strength: GAAP gross margins rose to 20.1%. Tesla plans to launch 6 new production lines for vehicles, robots, and batteries by 2026.
Optimus: A 3rd-gen humanoid robot design is expected in Q1.
After-hours: Shares rose 3.59% to $445.90.
■ Meta (META)
Guidance Surge: Rose 10% after projecting Q1 revenue of $53.5B–$56.5B, well above the $51.27B consensus.
■ Microsoft (MSFT)
Spending Dip: Fell 4% as investors reacted to increased spending despite solid EPS and revenue.
■ IBM (IBM)
Beat: Rose 8% after reporting a Q4 EPS of $4.52, surpassing the $4.29 estimate.
■ ServiceNow (NOW)
AI Concerns: Fell 6% on lingering concerns regarding AI's impact on future performance, despite solid results and a new partnership with Anthropic.
■ Lam Research (LRCX)
Surprise: Reported Q2 revenue of $5.34B and EPS of $1.27, beating estimates. Issued "rosy" Q3 guidance significantly higher than Wall Street expectations.
