To The Moon

As U.S. stock market took a breather from a rally that has pushed major indexes to record high levels, we saw stocks fell on Friday (24 Jan).

The S&P 500 closed 0.29% lower after hitting a new all-time high this morning, while DJIA and the tech-heavy NASDAQ slipped 0.32% and 0.50% respectively. The major indexes, each of which were riding four-day winning streaks heading into Friday's session, posted weekly gains for the second consecutive week.

Sentiment had been supported throughout the week by optimism about generally strong corporate earnings reports, the prospects for AI-related development and the pro-business measures being pursued by the new Trump administration.

S&P 500 Technology Sector Biggest Lagger

We saw the S&P 500 Technology sector lost 1.09% with only six sectors ended in the green. The technology stocks led the downturn on Friday after Texas Instruments (TXN) late Thursday issued disappointing guidance, news that sent its shares and those of other analog chip manufacturers sharply lower. Texas Instruments shares fell 7.5% to lead S&P 500 decliners, while Microchip Technology (MCHP) and Analog Devices (ADI) fell 5.3% and 4.8%, respectively.

Mega-cap technology stocks, which have helped power the recent rally, were mixed on Friday. AI chipmaker Nvidia (NVDA) dropped 3.1%, leading Dow decliners, while Apple (AAPL), Microsoft (MSFT), Amazon (AMZN) and Tesla (TSLA) also lost ground. Alphabet (GOOGL), Meta Platforms (META) and Broadcom (AVGO) were each up more than 1%.

Note Yield Fell With Expectations Of How Rate Cut Is Heading

The yield on the 10-year Treasury, which correlates with expectations about where interest rates are headed, was at 4.62%, down from 4.64% late Thursday. 2-year yield also drop to 4.259 from 4.285.

Stocks To Watch

$MicroStrategy(MSTR)$ could face a significant tax bill due to a 15% tax on unrealized gains from its $47 billion Bitcoin holdings. This tax, introduced by the Inflation Reduction Act of 2022, may impact the company's financials starting in 2026. The tax is based on new accounting standards that require the fair market value of Bitcoin to be included in GAAP earnings.

Meta Platforms (META) is planning a major investment in artificial intelligence infrastructure, with CEO Mark Zuckerberg announcing a $60 billion to $65 billion expenditure. The company aims to build a data center with over 1GW of computing power this year and expects to have more than 1.3 million GPUs by 2025. This expansion supports Meta's AI initiatives, including the Llama 4 model.

$Palantir Technologies Inc.(PLTR)$ has seen its stock rise for eight consecutive sessions, closing at $79.04 on Friday. The stock has gained over 300% in the past year, with recent positive analyst coverage from Wedbush, which raised the price target to $90. The company's AI strategy is a key factor in its growth outlook.

$Cloudflare, Inc.(NET)$ continued its upward trend, closing 1% higher at $125.20. The stock has gained over 50% in the past year, with analysts maintaining a positive outlook due to the company's growth potential.

As we can see from the technical, NET have been moving steadily upside after we saw a bullish MACD crossover on the 16 Jan, and with the growth potential being seen by analyst, investors sentiment have been positive. NET is trading comfortably above the short-term and long-term MA, with MTF giving a strong upward trend, we are going to see more upside movement from NET.

I would wait for small correction as we are seeing the technology stocks making their earnings report this week, we might see some influence on NET.

Paramount Global (PARA) saw a 1.2% rise after reports of a competing offer for the company from Project Rise. The offer includes a 27% premium for Class B shares compared to the Skydance deal, with a total value of $13.5 billion.

$NVIDIA(NVDA)$ saw a slight dip in its stock despite Meta's announcement of a massive AI data center plan. The company remains a key supplier of GPUs to Meta, alongside AMD (AMD), which remained flat following the news.

I would not be so concerned about the dip in NVDA, as they are still supplying chips for GPUs to data center and NVDA has provided a bullish MACD crossover on 21 Jan, and it has been trading pretty well over last week.

I am expecting some small correction if the earnings report from some of the big tech names does not come out as expected. I am holding my position on NVDA.

NextEra Energy (NEE) topped the S&P 500 leaderboard with a 5.1% gain, despite flat Q4 earnings. The company announced partnerships and regulatory plans, including restarting a nuclear plant in Iowa.

$SoFi Technologies Inc.(SOFI)$ is set to announce Q4 earnings, with investors focusing on loan growth and the financial services segment. The company is expected to report a modest increase in its Loan Platform business.

Summary

I would think that this week we might see another rally build up as big tech stocks report their earnings, the key focus would be the AI monetization.

How much or who is the winners for 2024 in terms of taking the bigger pies of AI revolution.

Appreciate if you could share your thoughts in the comment section whether you think this week we will see another rally formed up.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.