The stock market saw a positive trend as technology stocks led the charge, with the S&P 500 (SP500) nearing a historic milestone. The tech-heavy Nasdaq Composite (COMP.IND) and the Dow Jones Industrial Average (DJI) also experienced gains. In particular, the S&P 500 was a hair's breadth away from the 5,000-point mark, a level it has never reached before. This upward movement was supported by strong quarterly results and guidance from Fortinet (FTNT), which also gave a boost to cybersecurity stocks. However, the gains in the Dow were somewhat tempered by a decline in Amgen (AMGN) following its earnings report.
Bank of America (BofA) analysts have spotlighted several S&P 500 companies with significant upside potential according to their price objectives. General Motors Co. (GM, Financial), First Solar Inc. (FSLR, Financial), and Warner Bros. Discovery Inc. Series A (WBD, Financial) are among the companies with the highest potential for price appreciation. On the flip side, BofA also identified companies with high idiosyncratic risk, suggesting that sectors like consumer discretionary, technology, and health care might offer more opportunities for stock selection strategies based on earnings growth and analysts' outlooks.
In a separate report, BofA analysts highlighted S&P 500 companies with inexpensive valuations, such as APA Corporation (APA, Financial) and Bunge Global SA (BG, Financial), which trade below the bottom 25th percentile valuations compared to their sector peers. Conversely, they also outlined companies with expensive valuations that trade above the top 75th percentile and are rated as "non-buys," including American Water Works Company, Inc. (AWK) and Arthur J. Gallagher & Co. (AJG).
Gilead Sciences (GILD, Financial) announced the discontinuation of its anti-CD47 immunotherapy candidate magrolimab in blood cancer due to increased risk of death in Phase 3 trials. This has led to a full clinical hold on all magrolimab studies in acute myeloid leukemia (AML) and myelodysplastic syndromes (MDS) by the FDA. The company is also reviewing its ongoing solid tumor programs for magrolimab.
Tech investor Altimeter Capital confirmed a stake in PayPal (PYPL, Financial), with the hedge fund's manager Brad Gerstner expressing that their continued investment depends on the company's commitment to significant changes. Altimeter is not looking to take an activist role but is closely monitoring PayPal's management and board's actions.
Southwest Airlines (LUV, Financial) has filed a prospectus related to the offer and sale of mixed securities, indicating potential future financial maneuvers. Meanwhile, Terran Orbital (LLAP, Financial) has reassured stakeholders that it is not seeking to raise money and is undergoing a strategic review after reaching an agreement with activist investors.
Marijuana stocks, including MedMen Enterprises (MMNFF, Financial) and Curaleaf Holdings, experienced a reversal in gains after a government official refuted rumors about an imminent cannabis-related policy decision from the Biden administration. This has tempered investor enthusiasm that was built on the expectation of a favorable outcome from the DEA's review of marijuana scheduling.
AMD (AMD, Financial) continues to gain market share in the CPU microprocessor space at the expense of Intel (INTC), with the latest data showing an increase in AMD's share across notebooks and desktops. This competitive dynamic is closely watched by investors as it has significant implications for both companies' market positions.
In the realm of earnings and corporate performance, Cloudfare (NET, Financial) is anticipated to report strong fourth-quarter earnings, benefiting from increased spending on cloud infrastructure. Palantir Technologies (PLTR, Financial) shares surged following a positive fourth-quarter report, with significant growth in U.S. commercial revenue and customer count. Additionally, Warner Bros. Discovery (WBD, Financial) is set to report its quarterly results soon, amidst speculation about its interest in acquiring Paramount Global.
