In a notable day for the stock market, Amazon (AMZN, Financial) released its fourth-quarter earnings, surpassing analyst expectations with a reported revenue of $170 billion, a 13.9% increase year-over-year. The tech giant's earnings per share (EPS) of $1.00 exceeded the consensus estimate of $0.80, despite a pre-tax valuation loss from its investment in Rivian Automotive. Amazon's North America and International segment sales saw significant growth, and the company provided optimistic guidance for the first quarter of 2024, expecting net sales to grow between 8% and 13% compared to the previous year.
Meanwhile, speculation has arisen that Apple (AAPL, Financial) should consider acquiring Peloton Interactive (PTON, Financial), according to Gene Munster of Deepwater Asset Management. Despite Peloton's recent struggles and a sharp decline in its share price, Munster believes the fitness company's strong subscriber base and brand could enhance Apple Fitness, particularly with hardware integration capabilities. However, he notes that Apple's typical acquisition strategy may not align with such a move.
The broader market saw gains, particularly in megacap technology stocks, as investors anticipated earnings reports from Amazon, Apple, and Meta Platforms (META, Financial). The positive sentiment was tempered by mixed economic data and the Federal Reserve's stance against expectations of interest rate cuts. Financial stocks experienced some pressure, with regional banks like Zions Bancorporation (ZION, Financial) and M&T Bank (MTB, Financial) facing declines after New York Community Bancorp's unexpected quarterly loss.
In other news, DocuSign (DOCU, Financial) shares dipped following reports of potential financing for an acquisition by private equity firms Bain Capital and Hellman & Friedman. Shipping company stocks, including Zim Integrated (ZIM, Financial) and Scorpio Tankers (STNG, Financial), turned lower on reports of a possible ceasefire between Israel and Hamas, which also impacted crude oil futures.
Investors are also looking ahead to earnings reports from oil majors Exxon (XOM, Financial) and Chevron (CVX, Financial), with expectations set for both companies to reveal their financial performance. Additionally, Arvinas (ARVN, Financial) shares hit a new 52-week high after Goldman Sachs initiated coverage with a Buy rating, highlighting the potential of its breast cancer therapy developed with Pfizer (PFE, Financial).
Qualcomm (QCOM, Financial) faced a share price decline as concerns arose over its loss of share at Samsung (SSNLF, Financial) and the impact on future guidance. The semiconductor industry remains in focus, with AMD (AMD) increasing its AI-related revenue guidance, while Meta Platforms (META, Financial) plans to use custom processors for AI capabilities in its data centers.
In the healthcare sector, leading insurers like UnitedHealth (UNH, Financial) and Humana (HUM, Financial) traded lower after CMS proposed a slight decrease in reimbursement rates for Medicare Advantage plans. Enterprise Product Partners (EPD, Financial) reported strong Q4 earnings and record crude oil volumes, while Twilio (TWLO, Financial) saw its shares fluctuate amid reports of a potential acquisition bid by Bird.
Legal challenges for social media companies are on the horizon, with Meta Platforms (META, Financial) and others potentially facing significant lawsuits. Goldman Sachs released its Conviction List, adding Target (TGT), Installed Building Products (IBP), and Ally Financial (ALLY), while removing JPMorgan (JPM) and others. The energy sector also saw developments, with Callon Petroleum (CPE, Financial) revealing a rival bidder prior to its agreement with APA Corp. (APA, Financial), and uranium producers surged on news from Kazatomprom about production constraints.
VanEck expressed optimism for the semiconductor industry, citing AI as a key growth driver and naming NVIDIA (NVDA, Financial) among the companies poised for expansion. Lastly, Clearfield (CLFD, Financial) reported its Q1 earnings, providing guidance for the upcoming quarter and reflecting on the current state of the industry.
