Updated 2 min read
In This Article:
The Nasdaq led US stocks higher on Wednesday as Netflix (NFLX) stock surged to a record, while Donald Trump’s boost to AI demand hopes outweighed fresh tariff worries.
The Nasdaq Composite (^IXIC) rose more than 1.3%, bolstered by a jump in Netflix shares on the heels of surprisingly strong earnings. The S&P 500 (^GSPC) climbed 0.6% to hover near its record closing high of 6,090.
Meanwhile, the Dow Jones Industrial Average (^DJI) was up 0.3%, coming off a rise of over 500 points on a winning Tuesday on Wall Street.
Trump is in the driving seat for markets, with investors on alert for any fresh move in the president’s fast-flowing overhaul of policy. His latest push to make the US a leader in AI — an $500 billion private-sector investment plan and a roll-back of Biden-era safety measures — is giving a bump to techs.
Shares in Oracle (ORCL), a partner in the “Stargate” venture, continued to rise, up 7% on the prospect of higher AI spending. In Tokyo, SoftBank (9984.T, SFTBY) stock jumped 11%.
Spirits were high despite heightened worries about a Trump-spurred trade war. The president said Tuesday his administration was considering imposing a 10% duty on China imports on Feb. 1, as he vowed to hit the EU with additional tariffs.
US stocks rallied on Tuesday amid relief that China wasn’t targeted in Trump’s first policy moves, which promised new duties for Mexico and Canada. Stocks in China fell on Wednesday as markets were rattled by the new trade-defense plan.
Corporate earnings continued to roll in. Before the bell, Johnson & Johnson (JNJ) posted quarterly sales and profit above estimates, but its stock slipped as investors weighed the impact of a strong dollar. Shares of Procter & Gamble (PG) popped after its sales also beat forecasts.
LIVE 7 updates
-
Johnson & Johnson stock down despite beat on full-year, Q4 2024 earnings
Yahoo Finance’s Anjalee Khemlani reports:
Johnson & Johnson (JNJ) beat on fourth quarter and full-year 2024 results, but its stock traded down on Wednesday morning to about $143 per share.
Several negative impacts were highlighted in the look-back and look-ahead on an earnings call, despite the company beating Wall Street expectations on revenue by $70 million and reporting results on earnings per share in line with estimates.
J&J reported total sales of $88.8 billion for 2024, up 4.3% compared to 2023. That includes slowing COVID-19 vaccine sales — a theme other vaccine makers are expected to see with a slower start to the respiratory virus season this year.
-
Amazon hits a record high
Shares of Amazon (AMZN) rose nearly 2% amid a broader tech rally on Wednesday to hit more than $234 per share, a fresh record high for the tech giant.
Other “Magnificent Seven” tech stocks were in rally mode too. Meta (META) rose more than 1.5%, while Microsoft (MSFT) popped almost 3%, and Nvidia (NVDA) gained nearly 4%.
-
Trump sparks an AI revival
President Donald Trump announced a new $500 billion private sector investment dubbed “Stargate” to build artificial intelligence infrastructure in the US with Oracle (ORCL), ChatGPT creator OpenAI, and Japanese conglomerate SoftBank (9984.T) among those committing to the joint venture.
The announcement sent Oracle stock up more than 5% in early trade on Wednesday, extending gains from Tuesday’s sessions when CBS news first reported the news.
Zooming out, the president’s commitment to investing in AI appeared to spark enthusiasm for a slew of stocks tied to the emerging technology. Both Nvidia (NVDA) and Super Micro Computer (SMCI) were up more than 4% on Wednesday. Meanwhile, smaller AI companies C3.AI (AI) and Big Bear AI Holdings (BBAI) were both up near 5%.
“We believe this is the start of a wave of massive AI investments to take place in the US as we expect more big tech players to make announcements over the coming weeks,” Wedbush Securities analyst Dan Ives wrote in a note to clients on Tuesday night.
“This comes at a critical juncture as we expect Trump to aggressively court more AI investments in the US with the China tariff negotiations in the background all part of a broader game of high stakes poker with China,” Ives added
Below is a full look at how AI-related stocks are performing in early trade on Wednesday.
-
Netflix stock reaches all-time highs after monster earnings
Netflix stock (NFLX) surged to all-time highs, trading over 13% higher in early trading on Wednesday, as Wall Street analysts praised the streaming media company’s fourth quarter earnings results.
Shortly after the opening bell, the stock surged to just under $1,000 a share as analysts rushed to increase their respective price targets. Pivotal Research upped its target from $1,000 a share to $1,250 — the highest on the Street.
The streaming giant reported a whopping 18.9 million users in the fourth quarter, while revenue and earnings also handily beat expectations. It was the biggest quarterly subscriber gain in the company’s history.
Netflix also announced a $15 billion stock buyback and boosted its full-year revenue outlook in its after-hours report on Tuesday. Netflix now projects 2025 revenue between $43.5 billion and $44.5 billion, ahead of the prior $43 billion to $44 billion range.
“Q4 results were near flawless,” Jefferies analyst James Heaney said in a note following the results.
The strong subscriber gains come after the streamer ended 2024 with two back-to-back NFL games, a successful “Jake Paul vs. Mike Tyson” boxing match, and the return of “Squid Game.” To that end, the company said price hikes will be hitting the service — which analysts had consistently teased heading into the print.
The company raised the price of its ad-supported plan to $7.99 from the prior $6.99 rate. Its Standard, ad-free tier will now be $17.99, up from $15.49, while its Premium plan will increase by $2 to $24.99. Users who want to add an extra member will now pay $8.99, an increase of $1.
-
S&P 500 opens near record high
The Nasdaq Composite (^IXIC) rose nearly 1%, bolstered by surprisingly strong earnings from Netflix (NFLX), while the S&P 500 (^GSPC) climbed 0.5%. Meanwhile, the Dow Jones Industrial Average (^DJI) was up 0.2%, coming off a rise of over 500 points on a winning Tuesday on Wall Street.
The S&P 500 quickly shot up to 6,079.82, hovering just shy of its all-time intraday record high of 6,099.97.
-
A word from Elon on his good friends at OpenAI
There is little love lost between Elon Musk and OpenAI.
And so when OpenAI — along with Oracle (ORCL) and SoftBank (9984.T) — was announced as part of the initial $100 billion investment into the Trump-backed AI infrastructure program, Stargate, the tech mogul and close Trump confidant could not help himself.
Musk added that he has it on “good authority” that SoftBank, the deep-pocketed Japanese conglomerate run by Masayoshi Son, has under $10 billion in capital secured for this project.
Oracle, SoftBank, and OpenAI — along with UAE-based AI investor MGX — are part of the initial equity backers of Stargate, which said Monday it would “begin deploying $100 billion immediately.”
Over the next four years, the project is planning to invest $500 billion to build new AI infrastructure in the US.
Musk, who now runs his own AI firm, xAI, has been locked in a court battle with OpenAI over its planned conversion to a for-profit structure.
Musk and OpenAI CEO Sam Altman started the company together a decade ago as a non-profit entity aimed at building AI to advance humanity. Musk left the company in 2018.
-
Good morning. Here’s what’s happening today.
Economic data: MBA Mortgage Applications (week ending Jan. 17); Leading Index (December)
Earnings: Alcoa (AA), Abbott Labs (ABT), Ally Financial (ALLY), Comerica (CMA), Discover Financial Services (DFS), GE Vernova (GEV), Johnson & Johnson (JNJ), Halliburton (HAL), Procter & Gamble (PG), Steel Dynamics (STLD), Travelers (TRV)
Here are some of the biggest stories you may have missed overnight and early this morning:
Trump’s policy spotlight could eclipse strong earnings season
Microsoft relaxes grip on OpenAI amid $500B ‘Stargate’ venture
Trump’s high-wire push to make the US an AI superpower
Netflix stock jumps after earnings stun Wall Street
J&J tops sales, profit estimates amid strong cancer drug sales
Trump Widens Tariff Threats to China, Europe on Day 2 in Office
