To The Moon

We saw the stocks closed solidly higher on 28 Jan (Tuesday), the performance was led by big gains in the technology sector.

The market rebounded from the sharp selloff that kicked off the week. The tech-heavy NASDAQ rose 2%, while the S&P 500 and DJIA added 0.9% and 0.3%, respectively. On Monday, S&P 500 and Nasdaq fell sharply when tech stocks posted their worst one-day performance since 2020 as the early success of Chinese startup DeekSeek's AI models sparked concerns about U.S. leadership in AI and the amount of money large companies are spending to develop the technology.

Several of the stocks that were hit hardest on Monday recovered on Tuesday. AI chipmaker Nvidia (NVDA), which shed nearly $600 billion in market value yesterday, gained 8.9%, while rival Broadcom (AVGO) rose 2.6% after plunging 17% yesterday.

Earnings Mixed Showing. Look Forward To Tech Earnings This Week

On the earnings front today, Boeing (BA) shares rose 1.5% after the embattled aircraft manufacturer reported a fourth-quarter loss that matched the preliminary results it issued last week. Shares of automaker General Motors (GM) and defense contractor Lockheed Martin (LMT) each dropped about 9% after the companies released quarterly results.

While the earnings reports continue rolling in, investors are also focused on the Federal Reserve, which began a two-day policy meeting today. The Fed, which has cut its benchmark rate at each of its last three meetings dating back to September, is widely expected to leave the rate unchanged this week, but market participants are eager to hear the Fed's views on economic conditions and how they could affect future rate decisions.

Shares of Oracle (ORCL), which had soared last week on news that the software maker had teamed up with OpenAI and SoftBank on a $500 billion project to develop AI infrastructure, finished 3.6% higher Tuesday after yesterday's 14% decline. Nuclear power company Vistra was up 9.2%, recovering slightly from a near-30% drop Monday that was fueled by fears demand for power to develop AI could wane in light of DeepSeek's apparent cost-efficiency.

S&P 500 Technology Led The Pack With Strong Performance From Big Names

The S&P 500 Technology sector was the biggest winner with 3.60% gain, it was helped by CrowdStrike and Nvidia, only three sectors have closed in the green, with communication services gaining 1.26% helped by $Meta Platforms, Inc.(META)$ which closed 2.19% higher. Consumer Discretionary sector also managed a 0.34% gain.

Large-cap technology stocks were higher across the board. Apple (AAPL) and Microsoft (MSFT) advanced 3.7% and 2.9%, respectively, while Alphabet (GOOGL), Amazon (AMZN), Meta Platforms (META) and Tesla (TSLA) also gained ground.

Investors are eagerly awaiting earnings reports from Microsoft, Meta and Tesla, which are due to be released after the closing bell on Wednesday, as well as Apple's quarterly results on Thursday.

Note Yield Holding Steady In Late Afternoon Trading

The yield on the 10-year Treasury, which is sensitive to expectations for interest rates, was holding steady at 4.53% in late trading.

Stocks To Watch

After a significant market cap loss, $NVIDIA(NVDA)$ shares showed resilience by climbing approximately 3% in premarket trading on Tuesday. This recovery follows a tumultuous Monday, where Nvidia lost $589 billion in market value due to concerns over DeepSeek AI's cost-efficient model. J.P. Morgan analysts maintained an Overweight rating on Nvidia, Broadcom (AVGO), and Marvell Technology (MRVL), emphasizing the potential for continued innovation despite competitive pressures from emerging AI technologies. AI chipmaker Nvidia (NVDA), which shed nearly $600 billion in market value yesterday, gained 8.9%, while rival Broadcom (AVGO) rose 2.6% after plunging 17% yesterday.

The U.K.'s Competition and Markets Authority highlighted Microsoft's (MSFT) dominant position in the cloud services market, which is making it difficult for Amazon (AMZN) Web Services and Google Cloud (GOOGL) to compete. The agency noted that Microsoft and Amazon control a significant portion of the market, raising concerns about limited choices for consumers. All three companies experienced minimal stock movement in premarket trading, but Microsoft close with +2.91%, GOOGL close with +1.82% and $Amazon.com(AMZN)$ closed with a modest +1.16%.

I am holding to my AMZN shares because I believe that AMZN would be the winners as AI development cost have been proven by DeepSeek no need to be on the high side, hence, they will be more companies looking at how to use AMZN AI services to basically run their models for training and inference.

On the technical side, AMZN looks to have more upside coming as the bulls have succeeded in building a daily uptrend expansion. With big tech names recovering from the selloff on Monday, I think we can focus our attention to the hyperscalers.

How these hyperscalers going to attract customer to build their models with lower cost would be something to look forward to.

$Alibaba(BABA)$ introduced its new Qwen2.5-VL AI models, which rival OpenAI's offerings backed by Microsoft (MSFT), Amazon (AMZN), and Google (GOOGL). These models demonstrate advanced capabilities in text and image analysis, positioning Alibaba as a strong competitor in the AI space.

$SoundHound AI Inc(SOUN)$ filed for a registration statement with the SEC for a $250 million "at-the-market" offering program, which is part of a broader $500 million sale of its Class A common stock and other securities. The move aims to bolster the company's financial position amid a challenging market environment.

Intuitive Machines (LUNR) announced the delivery of its IM-2 mission lunar lander, Athena, to Cape Canaveral. The mission, part of NASA's Commercial Lunar Payload Services initiative, is slated for launch in February 2025, marking Intuitive Machines' second lunar mission.

Summary

I think we might be seeing more updates coming from cloud providers offering platform for AI build, corporations would need to rethink their strategy and cost of developing and deploying an AI.

I personally was asked how come I can build my AI model with such low cost, I believe DeepSeek have helped me to show that it is possible. I do not need to invest in huge computing power in data centre, I can run both on premises and also on the cloud with computing power that can be scaled as and when the model require.

Appreciate if you could share your thoughts in the comment section whether you think big tech names would continue its upside given that cost of AI development would be something to look at.

@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.