Shesa's Weekend Stock Market Updates - 2|1|26
Welcome to Weekend Update
Thanks to all my friends who tuned to my Radio Show today. If you missed then you can view it in Facebook by clicking here:
The month of January is over. The month of February is kind of neutral for the index. The Stock market remains little strange - only a few stocks keep moving up and most other keeps going down and further down. For the week, S&P 500 was up 0.3%, Dow was down about 0.4% and Nasdaq was down -0.2%. However, for the month of January all the indexes were up S&P 500 +1.4%, Dow +1.7%, Nasdaq +1%. That's the good news. However, the market has been very volatile, tricky and slightly disappointing. Technology stock remained under pressure despite good earnings from META, APPL, TSLA. Microsoft disappointed. More on earnings later. The PPI report released on Friday showed uptick in inflation 3% vs. 2.7%. This was not a great news. After sky rocketing the gold and silver prices took a bit hit last Friday - Gold was down about $500, around 10%. Silver was hit the hardest plummeting about 25%.
Other news
Last Friday, Trump nominated Kevin Warsh (former Fed governor) as the next Federal Reserve chair to replace Jerome Powell whose term ends May 2026). Once Senate approves the confirmation, hopefully in a few weeks, he should assume the responsibility of Fed chair. He was little hawkish in his tenure as Fed governor. However, I believe he has become little more dovish off late. His nomination had some impact on the market last Friday. We will see how market reacts going forward.
The other big news, Tesla (TSLA) and SpaceX is considering a potential merger per Bloomberg report. As you know SpaceX plan to go public this year and expected to be the biggest IPO in the stock market history. If this news is true, it’s time to accumulate Tesla stock. Additionally, Tesla will investing in xAI. The is not a recommendation, just my personal opinion.
Nvidia (NVDA) invested $2 billion in CoreWeave (CRWV) stock at $87.20 per share on Jan 23 which was announced yesterday. So, NVDA became the second-largest shareholder of CRWV. This will help expanding their partnership to accelerate >5 GW of AI factories by 2030.
EARNINGS
Meta Platform (META): Beat on top and bottom line.
- Earnings per share: $8.88 vs. $8.23 estimated
- Revenue: $59.89 billion vs. $58.59 billion, up 24% YOY.
Guidance: Meta said it expects first-quarter sales to come in the range of $53.5 billion to $56.5 billion, ahead of analyst estimates of $51.41 billion.
My view: META had a good quarter and solid guidance. The stock saw nice bounce after the results. We may see this stock gradually going north.
Tesla (TSLA): Beat on top and bottom line after a few quarters.
- Earnings per share: 50 cents, adjusted vs. 45 cents, estimated
- Revenue: $24.90 billion vs $24.79 billion. Full-year revenue fell to $94.8 billion from $97.7 billion in 2024.
My View: Tesla is moving past just selling cars into autonomy, robotaxis, energy, and humanoid robots (Optimus). The company will be increasing CapEx to $20B. Because it plans to ramp up Optimus humanoid robot production ramp, Battery and lithium plants, AI compute/infrastructure and energy initiatives. If the TSLA and SpaceX merge then it should be very beneficial for the shareholders as the stock valuation should go up significantly, probably more than double. I do not know if and when it will happen but it's worth accumulating the stock with patience for the long haul. I plan to keep adding this stock on the dip. I plan to add some more on Monday. But any Tesla shareholders should have some hedging because it may reran volatile.
Apple (AAPL)
EPS: $2.84 vs. $2.67 estimated
Revenue: $143.76 billion vs. $138.48 billion estimated
IPhone Revenue :$85.27 billion vs. $78.65 billion estimated
Guidance: $107.8 billion - $110.66 billion vs. $104.84 billion.
My View: Apple had a good results and the guidance was solid. The only little missing piece was miss in Service revenue and Mac sales. However, it was a strong report. Hence, I believe stock should bounce back. It may be worth adding little bit on any pullback.
Microsoft (MSFT)
- Earnings per share: $4.14 adjusted vs. $3.97 expected
- Revenue: $81.27 billion vs. $80.27 billion expected
Revenue from Azure and other cloud services grew 39%, compared with 40% growth last quarter. The company reported $9.97 billion in other income, compared with other expense of $2.29 billion last year. It showed profits from OpenAI becoming public-benefit corporation. So, nothing to be excited about. The stock got hammered and the company had one of the worst day for its stock losing $357 billion of it market capitalization.
My View: It was not a great result, particularly EPS was positively impacted by other income. The stock may not do much and money may be moving to other stocks. It may remain on some trading range.
Lam Research (LRCX)
EPS: $1.27 vs. $1.17
Revenue: $5.34 billion vs. $5.23 billion expected.
Guidance: $1.35 vs. $1.20 and revenue $5.7 billion vs. $5.33 billion.
My view: The stock is up but company is doing well and has the momentum. So, worth keeping an eye out.
United HealthCare (UNH)
The stock was slammed 20% after the earnings. It had a small beat on profit but failed on revenue. Also, the company is forecasting revenue below expectations and EPS in-line with expectations. The main reason, I think is Centers for Medicare & Medicaid Services (CMS) proposed +0.09% for 2027 Medicare Advantage rates, far below the expectations. Hence, this stock may remain on stress in a trading range. Once a darling of Wall Street is now one of the worst stock.
Economic Report this week
WED, 2/4: ADP employment
FRI, 2/6: U.S. Employment report
Key Earnings this week
MON, 2/2: PLTR
TUE, 2/3: AMD
WED, 2/4: GOOG
THU, 2/5: AMZN
Stocks to watch
GOOG, AMZN, AMD, TSLA, PLTR, NVDA, META, SOXL, AAPL, SLV, GLD, IONQ.
What to expect?
Now earnings season is in full swing. But things may become little dicey going forward. Hence, better to be watchful. I do feel that Google and Amazon should have good earnings. But guidance and how market reacts to those results have to be seen. This market has been very tricky and disappointing at times. As I told before and during my Radio Show today, a cautious approach is needed. Market is does not seem to be moving based on fundamentals. Moreover, money keeps moving based on momentum, A handful of stocks like memory, storage etc are going up and most others have been falling. Gold and Silver has the momentum but those too hit hard last Friday. So, it's worth to keep a close eye on the market.
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