The Nasdaq clinched a record high and Nvidia (NVDA) closed above $2 trillion for the first time on Friday after Dell’s AI-driven earnings beat sparked a semiconductor rally.
The Nasdaq Composite rose 1.1% Friday afternoon to close at 16,275, up 1.7% over the week. The S&P 500 advanced 0.8% to finish the week 1% higher. The Dow Jones Industrial Average ticked up 0.2% on Friday but ended the week down 0.1%.
Dell (DELL) shares soared after it said AI-optimized server orders jumped nearly 40% in the fourth quarter, highlighting the computing pioneer’s opportunity to gain from artificial intelligence investment.
New York Community Bank (NYCB) tumbled after it delayed a regulatory filing, citing an assessment that found “material weaknesses in the Company’s internal controls related to internal loan review.” The bank also named Alessandro DiNello chief executive officer, replacing NYCB veteran Thomas Cangemi.
Stocks climbed yesterday, with the Nasdaq notching its first record close since 2021 as markets shook off a report that showed inflation accelerated in January.
Equity Indexes Wrap: Nvidia Tops $2 Trillion as Chip Stocks Soar on AI Demand; Casinos, Cybersecurity Lag
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The Dow
Salesforce (CRM) climbed 2.6%, adding to yesterday’s gains following a better-than-expected earnings report.
Intel (INTC) climbed 1.8% as chip stocks surged for a second consecutive day.
Chevron (CVX) rose 0.5% while oil futures ticked up to about a fourth-month high.
Boeing (BA) fell 1.8% amid reports it was in talks to acquire its troubled supplier, Spirit AeroSystems (SPR), which has been at the heart of its recent manufacturing and safety challenges.
UnitedHealth Group (UNH) shed 0.8% as it continued to deal with the fallout from a cyberattack on its subsidiary Change Healthcare, which has disrupted payments and prescription fulfillment across the country.
The S&P 500
NetApp (NTAP) soared 18.2% after blowing past Wall Street’s estimates with its fiscal third-quarter earnings. Peer Western Digital (WDC) jumped 8.1%.
The Cooper Companies (COO) reported better-than-expected sales and earnings, sending its stock 9.2% higher.
Most tech mega caps advanced, including Meta (META), up 2.5%, and Amazon (AMZN), up 0.8%.
Tesla (TSLA) inched up 0.4% after it raised the price of its Model Y in the U.S. and offered Chinese buyers of certain models an 8,000 yuan ($1,100) insurance subsidy.
Dominion Energy (D) lost 6.4% after its full-year earnings guidance fell short of expectations.
Las Vegas Sands (LVS) dropped 5.9% after a report indicated Macau gambling revenue fell in February despite a record number of visitors amid Lunar New Year celebrations. Wynn Resorts (WYNN) fell 3.8%.
Xcel Energy (XEL) fell 5.9%, tumbling for a second day amid concerns it could face liability for Texas wildfires.
The Nasdaq 100
Marvell Technology (MRVL) led the index higher, climbing 8.3% after Dell’s (DELL) better-than-expected earnings on robust artificial intelligence demand sparked a semiconductor rally. Semiconductor peers Broadcom (AVGO) and Advanced Micro Devices followed Marvell higher, adding 7.6% and 5.3%, respectively.
Nvidia (NVDA) gained 4% to close with a market cap of more than $2 trillion for the first time.
Autodesk (ADSK) advanced 2.5% after its fourth-quarter earnings and current-quarter guidance exceeded expectations.
ZScaler (ZS) tumbled 9.4% despite beating expectations with its quarterly earnings report. Cybersecurity peers CrowdStrike (CRWD) and Palo Alto Networks (PANW) followed ZScaler lower.
Keurig Dr. Pepper (KDP) fell 2.1% amid reports the investment firm JAB would sell about 87 million shares in a secondary offering.
Fisker Tumbles on Doubts It Can Stay in Business
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Shares of Fisker (FSR) plummeted Friday after the electric vehicle maker said its current resources aren’t enough to cover its expenses in the next 12 months, raising doubts about its ability to stay in business.
“To the extent Fisker’s current resources are insufficient to satisfy its requirements over the next 12 months, the company will need to seek additional equity or debt financing, and there can be no assurance that Fisker will be successful in these efforts,” the company said in its preliminary fourth-quarter earnings release.
Fisker reported a fourth-quarter operating loss of $103.5 million on revenue of $200 million. Revenue had been just $72 million in the previous quarter. Deliveries totaled 3,818 vehicles, representing about 77% of its full-year deliveries.
The company also said it is in talks to partner with a large automaker, “which could include an investment in Fisker, joint development of one or more electric vehicle platforms, and North America manufacturing.”
Fisker shares fell about 35% to trade at about 48 cents a share Friday afternoon. The New York Stock Exchange informed Fisker in mid-February that it had fallen out of compliance with the exchange’s listing requirements because its stock price closed below $1 for 30 consecutive trading days. The exchange gave Fisker six months to sustainably return its share price to $1, a task made more difficult with Friday’s drop.
Plug Power Shares Surge as Firm Says It’s No Longer at Risk of Shutting Down
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Plug Power (PLUG) shares surged in intraday trading Friday after it said it is no longer at risk of going out of business, though the hydrogen fuel-cell manufacturer’s 2023 earnings undershot forecasts.
It said Friday that it had enough cash to fund its business “for the foreseeable future” and “has concluded that there is no longer substantial doubt of the company’s ability to continue as a going concern.”
Plug Power warned in November that its existing cash and available-for-sale equity securities may not be enough to fund its operations through the next year.
Plug Power Friday posted a 2023 loss of $2.30 per share, wider than analysts forecast—while its $891.3 million revenue also missed estimates.
Shares of Plug Power were 6.8% higher at $3.77 Friday afternoon. However, even with Friday’s gains, they’ve lost more than 73% of their value in the past year.
NetApp Stock Jumps After Solid Quarterly Earnings and Raised FY Outlook
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NetApp (NTAP) was the best-performing stock in the S&P 500 Friday after the cloud storage provider breezed past Wall Street’s quarterly expectations and raised its full-year outlook amid growing demand for its cloud-based data management solutions.
For the three months ending Jan. 26, the company’s fiscal third quarter, adjusted earnings came in at $1.94 per share, far outpacing analysts’ modeling of $1.37 a share. Revenue in the period of $1.61 billion also came in ahead of estimates, which Wall Street had pegged at $1.59 billion.
Looking ahead, the company lifted its full-year fiscal 2024 adjusted earnings guidance to between $6.40 and $6.50 per share, up from its prior forecast of $6.05 to $6.25 a share. It also raised its revenue outlook for the period to between $6.185 billion and $6.335 billion.
NetApp shares were trading 20.8% higher at $107.70 Friday afternoon. They have gained more than 60% in the past year.
After 570 Days, Nasdaq Recovers from Bear Market Losses
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It took the Nasdaq Composite 570 trading days—or 2 years, 3 months, and 9 days—to clock a fresh record high, which it did Friday afternoon when it climbed above 16,212.23, its previous record from Nov. 22, 2021.
The S&P 500 hit a record of 4,818.62 on January 4, 2022, before a 26% drawdown during 2022’s bear market. It took the index 512 trading days to overtake that record, which it did on January 19.
The Dow took a comparatively quick 487 sessions to recoup its losses from 2022. Between Jan. 5, 2022, and Sept. 30, 2022, the index fell from a record 36,952.65 to 28,715.85. It finally topped its previous record on Dec. 13, 2023, when it jumped above 37,000 for the first time.
That the Nasdaq took the longest to recover is understandable given the severity of its losses during the Fed’s tightening cycle. The index, from intraday peak to intraday trough, tumbled 37% between November 2021 and December 2022. The Dow, meanwhile, had it relatively easy with its 22% drawdown.
ADM Says Accounting Woes Won’t Impact Earnings, Stock Rises
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Shares of Archer-Daniels-Midland (ADM) advanced Friday after the agricultural commodity giant said a “material weakness” in the company’s internal financial reporting practices won’t have a broad impact on overall earnings.
Shares of ADM plunged in late January after it cut its outlook for the 2023 fiscal year and put a top executive on leave pending its investigation into its accounting practices in its nutrition unit.
On Friday, ADM said in a regulatory filing that it “anticipates correcting certain intersegment sales,” and also expects to report a “material weakness in the Company’s internal control over financial reporting related to its accounting practices and procedures for intersegment sales.”
Still, it said that since the sales were between segments, it doesn’t “anticipate an impact to the Company’s consolidated balance sheets, statements of earnings, comprehensive income (loss), or cash flows.”
ADM shares were up 2.3% at $54.32 early Friday afternoon, but have still lost more than 30% of their value in the past year.
Spirit AeroSystems Stock Jumps Amid Reports of Possible Boeing Acquisition
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Shares of Spirit AeroSystems (SPR) surged Friday morning after the Wall Street Journal reported the troubled plane parts manufacturer was in talks to be acquired by Boeing (BA).
Spirit is a major supplier of parts to Boeing, from which it was spun off in 2005, and has come under intense scrutiny since a Boeing 737 MAX jet lost part of its fuselage mid-flight in January.
But Spirit’s troubles predate that incident. Boeing detected manufacturing defects in the tail fitting of several Spirit-made 737 Max jets in April 2023. And in August the company identified a separate issue with drill holes in aft pressure bulkheads. The defects have caused Boeing to repeatedly delay deliveries and trim forecasts.
Spirit AeroSystems were up 13% Friday following the report, but are still down about 3% over the last 12 months. Boeing shares, which have slumped 23% so far this year, were down 1.2% midday Friday.
NYCB Falls to 28-Year Low Amid CEO Shake-Up, ‘Material Weaknesses’ in Internal Controls
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New York Community Bancorp (NYCB) tumbled as much as 30% Friday morning after replacing its CEO and identifying “material weaknesses” in internal controls.
Executive chair Alessandro DiNello was named president and chief executive officer effective immediately, replacing Thomas Cangemi, who has been with the company for nearly three decades. Cangemi remains on the board.
“As part of management’s assessment of the company’s internal controls, management identified material weaknesses in the company’s internal controls related to internal loan review, resulting from ineffective oversight, risk assessment and monitoring activities,” the company said in a filing with the Securities and Exchange Commission Thursday.
NYCB shares were trading 24% lower Friday morning, and have lost 65% of their value since the company reported earnings which showed an unexpected quarterly loss on Jan. 31. In that same report, the firm disclosed that its commercial real-estate loans were in trouble.
Dell Stock Jumps on Revenue Beat Driven by AI Momentum
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Dell Technologies (DELL) shares surged Friday as the company’s quarterly results highlighted the Nvidia (NVDA) partner’s position to gain amid the artificial intelligence (AI) boom.
The company reported fourth-quarter revenue for the 2024 fiscal year of $22.3 billion, down 11% from a year ago but above analyst estimates and the previous quarter. Dell’s Infrastructure Solutions Group grew 10% from the previous quarter as AI-optimized server orders jumped nearly 40%.
Dell could see significant gains as AI tech advances through its ongoing partnerships with AI leaders including Nvidia and AMD (AMD), with analysts indicating Dell could benefit from an accelerated upgrade cycle driven by AI-capable PCs.
Dell shares surged as much as 35% at the open on Friday—their largest intraday gain in data going back to 2016—before paring gains to trade about 25% higher at $118.24.
Stocks Making the Biggest Moves Premarket
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Gains:
- Dell Technologies Inc. (DELL): Shares of the computing hardware maker soared nearly 25% after the company reported better-than-expected earnings amid a surge in demand for AI-optimized servers.
- NetApp Inc. (NTAP): The data storage company’s stock surged more than 17% after it reported fourth-quarter adjusted earnings of $1.94 per share, well ahead of the $1.37 analysts were expecting.
- Autodesk Inc. (ADSK): Shares of the software developer jumped 8% after beating earnings estimates on strong demand from enterprise and entry-level customers, especially in the U.S.
Losses:
- New York Community Bancorp (NYCB): Shares of the regional lender tumbled more than 20% after it identified “material weaknesses” in its internal loan review process and, subsequently, replaced its longtime CEO.
- ZScaler Inc. (ZS): Shares of the cybersecurity firm fell 5% after it beat earnings estimates and offered a current-quarter earnings forecast that was modestly ahead of Wall Street’s expectations. ZScaler’s stock had risen 88% in the 12 months leading up to Thursday’s results.
- Hewlett Packard Enterprise Co. (HPE): The IT company’s stock shed more than 4% after it reported a steep drop in revenue in the fourth quarter, causing its earnings and guidance to fall short of Wall Street’s estimates.
Stock Futures Little Changed Before Markets Open
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Futures contracts connected to the Dow Jones Industrial Average were down less than 0.1% in premarket trading on Friday.
S&P 500 futures were less than 0.1% higher.
Nasdaq 100 contracts traded up 0.1% about an hour before markets opened.
