Nvidia stock climbed around 5% on Thursday following the company's release of its  First Quarter 2026 results.  The company is a dominant player in the artificial intelligence (AI) world, and even though there were some soft numbers in the report, investors are optimistic about where Nvidia is headed. Nvidia makes powerful computer chips that help power AI software, including that used by major tech companies like Microsoft, Amazon, and Meta. The companies have been heavily investing in AI, and they keep using Nvidia's chips to power their technology. In the first quarter of the year, Nvidia garnered $44.1 billion in revenues, beating analyst expectations. This was also above the $26 billion that the company earned in the same period last year. Nvidia earned $0.96 per share, above analysts' expectations of $0.93 and significantly higher than the $0.61 it earned last year. However, revenue from Nvidia's data center business was slightly lower than expected. At $39.1 billion, it fell just short of the estimated $39.2 billion. The other issue is an export restriction in the United States. The government has put restrictions on Nvidia selling some of its chips to China, one of the biggest markets for technology products. Due to these restrictions, Nvidia expects to lose around $8 billion in revenue during the second quarter. The company has already lost $15 billion in revenue because of these constraints. Nvidia's CEO Jensen Huang said it would be difficult to sell its highest level of chips in China in the future, but the company is looking for limited ways to stay in the market. Despite these setbacks, Nvidia remains a leader in the AI space. Its new generation of chips is being rolled out, and demand from major tech companies is still strong. Investors are focusing more on Nvidia’s long-term growth in AI rather than the short-term impact of export issues.

Al Jazeera In January, DeepSeek, a Chinese artificial intelligence (AI) startup, released its latest model, DeepSeek R1, which rivals technology developed by OpenAI at a fraction of the cost.  The market’s reaction rattled investors, as DeepSeek made headlines and caused many US tech stocks to sink. One of the sinking tech stocks is Nvidia, which has raised the question of whether American firms would continue to dominate the AI market.  DeepSeek looks, feels, and acts similarly to ChatGPT by OpenAI. DeepSeek’s R1 is said to be just as powerful as their o1 model–released at the end of last year–which can perform complicated math and coding tasks. However, DeepSeek reports being able to train its model at a fraction of the cost–using only $6 million as compared to the “over $100m” referenced by OpenAI CEO Sam Altman when discussing GPT-4.  Using less memory that rivals, DeepSeek attracts customers through its combination of lower cost and performance. In fact, it became the most-downloaded free app on Apple’s App Store when it was released in the US. Nvidia’s shares tumbled by 17% on January 27th, recovering since then. While tech companies choose to spend aggressively to invest in AI, DeepSeek’s efficiency disapproves that idea. Meta, on the other hand, jumped 6.4%, likely due to its strong quarterly earnings report.

Inflation accelerated in October, according to the Federal Reserve’s preferred measure, the Personal Consumption Expenditures (PCE) index. The overall index rose 2.3% from a year earlier, up from 2.1% in September. Stripping out volatile food and energy costs, the core PCE index climbed 2.8%, slightly higher than the previous 2.7%. Monthly increases also held steady, with the overall index up 0.2% and the core up 0.3%. While inflation is far below its 2022 peak of 7%, it remains above the Fed’s 2% target. This “sticky” inflation complicates policymakers’ plans to ease interest rates. Previously, the Fed projected rate cuts starting in December and gradually lowering rates to 3.4% by 2025. However, investors now expect fewer cuts as officials reassess the outlook. Adding uncertainty is President-elect Donald Trump’s proposed tariff hikes, including levies on China, Canada, and Mexico. Economists predict these tariffs could push core inflation above 3% in 2025, delaying progress toward the Fed’s 2% goal. Economic growth and consumer spending remain robust, with household incomes rising more than expected in October. Adjusted for inflation, spending climbed 0.1%, reflecting resilient demand. Analysts warn this strength could allow businesses to raise prices, sustaining inflationary pressures. Despite challenges, Fed Chair Jerome Powell remains cautious about reacting prematurely to policy changes. While growth driven by higher productivity and supply could ease inflation, tariffs and strong demand may force the Fed to maintain higher rates for longer. Heading into 2025, central bankers face a balancing act: encouraging economic stability while containing inflation. As Fitch Ratings’ Olu Sonola noted, the Fed will likely remain “concerned and cautious.”

The Federal Reserve has announced a second consecutive interest rate cut, reducing its key borrowing rate by 0.25% to a range of 4.50%-4.75%. This follows a half-point cut in September and reflects the Fed’s efforts to adjust monetary policy amid ongoing inflation concerns and a cooling labor market. The move was expected by markets, and all Fed officials, including Governor Michelle Bowman, voted in favor. This rate cut is seen as part of the Fed's recalibration to balance inflation control with economic growth. The central bank now views the risks to achieving both inflation and employment goals as balanced, indicating that while inflation is still a concern, the labor market is showing signs of softening. Despite solid GDP growth and a still-strong labor market, the Fed continues to focus on reducing inflation, which remains above its 2% target. This rate cut could be followed by another in December, though the Fed is also carefully monitoring economic conditions and political developments under the new administration. For consumers, this rate cut could impact borrowing costs, including mortgages, auto loans, and credit cards, though rates for these financial products have remained relatively high due to rising Treasury yields. The Fed’s goal is to guide the economy toward a "soft landing," reducing inflation without triggering a recession.

IBM shares dropped by about 3% in after-hours trading on Wednesday after the company missed Wall Street’s revenue expectations for the third quarter . Here’s how IBM’s performance compared to analyst estimates from the London Stock Exchange Group (LSEG): IBM reported an adjusted earnings per share of $2.30, beating expectations of $2.23. However, revenue came in at $14.97 billion, slightly below the anticipated $15.07 billion. IBM’s revenue rose by 1.5% year-over-year, though the company posted a net loss of $330 million compared to a $1.70 billion profit the previous year. This loss was largely due to a one-time pension settlement charge following an agreement with Prudential. For the upcoming fourth quarter, IBM expects revenue growth at constant currency similar to the 2% growth seen in the third quarter. The company is also on track to achieve over $12 billion in free cash flow for 2024, having already generated $6.59 billion through the first nine months of the year. The company’s software division saw a 10% increase in revenue, totaling $6.52 billion. Red Hat, an IBM acquisition from 2019, achieved significant growth with a 14% revenue increase. IBM’s software segment had a strong gross margin of 83%. On the consulting side, revenue fell slightly to $5.15 billion, marking a 0.5% decrease and missing expectations. CEO Arvind Krishna noted that IBM's consulting segment is facing ongoing economic uncertainties. Infrastructure revenue also declined by 7% to $3.04 billion, below analyst predictions. IBM reported an increase in its generative AI business, which is now valued at over $3 billion, largely concentrated within consulting. IBM made moves to expand its services, including purchasing Accelalpha, an Oracle services provider, and selling QRadar cloud software assets to Palo Alto Networks.

Tesla released their Q3 2024 earnings report on October 23rd, showcasing robust performance across key areas, underscoring its continued leadership in the electric vehicle (EV) and energy sectors. The company reported a GAAP net income of $2.2 billion, marking a significant increase from previous quarters. Tesla’s total revenue rose 8% year-over-year to $25.2 billion, primarily driven by growth in vehicle deliveries, energy generation, and storage. The energy business saw a remarkable 52% increase in revenue, while Tesla’s automotive sector benefited from reduced costs, with the cost of goods sold per vehicle hitting a record low of $35,100. Tesla produced 469,796 vehicles during Q3, a 9% increase compared to the same period last year. The Model 3 and Model Y continued to lead production volumes, and the Cybertruck made a notable debut, becoming the third best-selling EV in the U.S. Tesla also achieved milestones in energy storage, with its Lathrop Megafactory producing 200 Megapacks per week, contributing to record energy storage deployments. Powerwall installations set new records for the second consecutive quarter. On the technology front, Tesla expanded its AI capabilities, increasing training compute by 75%, and released new features in its Full Self-Driving (FSD) system, including "Actually Smart Summon." Over two billion miles have been driven using FSD (Supervised). Looking ahead, Tesla is preparing to launch more affordable EV models in 2025, aligning with its mission to make sustainable energy accessible. Despite economic challenges, Tesla’s focus on innovation, AI, and production capacity expansion positions it well for future growth​. Tesla's report also emphasized its confidence in future growth, predicting that energy storage deployments will more than double year-over-year, and vehicle production is expected to achieve over 50% growth compared to 2023 before new manufacturing lines are added​.

In September, U.S. producer prices remained unchanged, signaling a continued slowdown in inflation. The producer price index (PPI), which tracks what producers receive for their goods and services, showed no change from the previous month. Over the past year, it has increased by 1.8%. This was largely due to a decline in the prices of goods, such as energy and gasoline, which offset a slight rise in service costs. For example, gasoline prices fell by 5.6%, and diesel dropped a significant 17.6%. Core inflation, which excludes food and energy, rose by 0.2%, matching economists' expectations. The data suggests that while inflation is easing, some categories, like housing and food, continue to remain elevated. This has left the Federal Reserve in a cautious position. They are expected to lower interest rates further this year, with many analysts predicting a quarter-point cut at each of the Fed’s remaining 2024 meetings. Meanwhile, consumer sentiment has dipped slightly. The University of Michigan’s survey showed a decrease in consumer confidence, with inflation expectations rising to 2.9%, the highest level since June. This sentiment shift comes as consumers continue to grapple with higher costs, particularly for essential goods like food. Overall, while inflation is moderating, it remains above the Federal Reserve's 2% target, indicating that the path to lower inflation may not be as smooth as hoped. However, the steady decline suggests progress toward a more stable economic environment in the near future.

In September, the U.S. economy experienced its strongest job growth in six months, with employers adding 254,000 jobs. This unexpected increase pushed the unemployment rate down to 4.1%, signaling a resilient economy. Many experts believe this strength means the Federal Reserve likely won't need to implement any large interest rate cuts for the rest of the year. The Labor Department's report also revealed that wages continued to rise at a steady pace, with average hourly earnings going up by 0.4% last month. On top of that, job growth for both July and August was revised upwards, showing 72,000 more jobs were added than originally estimated. This better-than-expected data comes after other positive economic revisions, such as improved figures for growth, income, and corporate profits, all of which suggest the economy is on a firmer footing than previously thought. Federal Reserve Chair Jerome Powell acknowledged this strength, stating that there’s no immediate need for the Fed to rush into cutting interest rates. Traders had been expecting a significant cut in November, but Powell's remarks, combined with the strong jobs report, make it less likely that large rate cuts will happen soon. Economists now expect a more modest 25 basis point cut in the near future, instead of a larger half-percentage-point reduction. Various sectors contributed to the job growth in September. The healthcare industry added 45,000 positions, while restaurants and bars increased their payrolls by 69,000. Retailers also saw gains, particularly in supermarkets and drugstores, contributing over 15,000 new jobs. However, some industries faced challenges: manufacturing shed 7,000 jobs, particularly in the motor vehicle sector, and transportation and warehousing lost over 8,000 positions. Despite the overall positive trends, there are concerns about potential turbulence ahead. Hurricane Helene recently caused widespread damage in the U.S. Southeast, and strikes by Boeing workers may have lingering effects on employment figures. These factors could impact job numbers in October, just before the presidential election.

COSTCO Costco released its Q4 FY2024 earnings  today (9/26), with the stock dropping over 1% due to a revenue miss. The company reported net sales of $78.2 billion, slightly below expectations. However, membership fees rose by 6.5% to $1.51 billion, despite a small dip in membership renewal rates due to an online promotion. On a positive note, Costco (COST) beat earnings estimates with non-GAAP EPS of $5.29 per share, surpassing the expected $5.07. Margins are also improving, and with a membership fee increase coming in Q1 FY2025, Costco is set to see continued earnings growth. Looking ahead, Costco plans to open 26 new warehouses in FY2025, slightly fewer than the 30 added this year. While this may slow revenue growth, Costco's expansion remains on track. Despite the solid earnings, some analysts still view Costco as overvalued. With the stock trading near $890 per share, there is concern that it could drop further, as current valuations don’t align with the company’s projected 6-9% annual sales growth over the next five years. In summary, while Costco remains a strong business, its current valuation may not offer enough upside for long-term investors.

The Economic Times Meta Platforms Inc. released successful fourth-quarter results on February 1st, 2024 after a sales jump YoY and a consistent increase of active users. Financial highlights included revenue of $40.11 billion and $134.90 billion, an increase of 25% and 16% year-over-year for the fourth quarter and full year 2023. Total costs and expenses were $23.73 billion and $88.15 billion for the fourth quarter and full year 2023, a decrease of 8% and an increase of 1% year-over-year. In December 2023, Meta experienced an increase in daily active users as well as monthly active users, at an increase of 6% YoY and 3% YoY. The company’s stock price saw a substantial increase following the announcement, likely due to better-than-expected results and the announcement of Meta’s first-ever dividend payment of $0.50 per share of outstanding common stock. Mark Zuckerberg, Meta founder and CEO, commented on the Q4 2023 earnings, saying, “We had a good quarter as our community and business continue to grow.” Looking ahead, Meta has outlined a strategic focus on artificial intelligence, integrating AI meaningfully into its family of apps. It involves new hires to support key areas, which reverses the hiring freeze from 2023 and increases capital expenses. Furthermore, Meta has laid out plans for political advertising in 2024, as some of the world’s biggest democracies are set to hold elections. Meta’s Q4 2023 earnings report demonstrates strong financial performance, and the company’s future plans indicate a commitment to technological innovation. As Meta continues to invest in AI and AR, it will be interesting to see how these developments shape the company’s trajectory in the coming years. #Metaverse #Meta #StockMarket #EarningsReport #Facebook

Microsoft Copilot Microsoft reported successful second-quarter results on January 30th, 2024, highlighting strong growth for Azure. The software maker also acquired video game maker Activision Blizzard during this quarter. Revenue increased 17.6% year over year in the quarter, meaning revenue is 17.6% higher in the recent quarter compared to the second quarter last year. Business highlights included sufficient growth in the sector of productivity and business processes. Office 365 Commercial revenue grew 17% while Microsoft 365 Consumer subscribers grew to 78.4 million, driving Office Consumer products revenue to increase by 5%. LinkedIn revenue grew 9%, with record engagement, and Dynamics 365 revenue grew 27%. Total revenue in the intelligent cloud grew 20%, primarily driven by Azure. Microsoft Azure and other cloud services revenue grew 30% driven by strong demand for AI services. “Strong execution by our sales teams and partners drove Microsoft Cloud revenue to $33.7 billion, up 24% (up 22% in constant currency) year-over-year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. During this quarter, the software maker acquired video game maker Activision Blizzard (“Activision”). Xbox content and services revenue increased 61% (up 60% in constant currency) driven by 55 points of net impact from the Activision acquisition. “We’ve moved from talking about AI to applying AI at scale,” said Satya Nadella, chairman and chief executive officer of Microsoft. “By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains across every sector.” #Microsoft #Technology #EarningsReport #Finance #StockMarket

BANK OF AMERICA Bank of America reported its fourth-quarter results on January 12th, 2024, which showed declined earnings and heavy fees placed on the company. The financial institution faced several challenges in Q4, including lower deposit balances, high deposit costs, and higher noninterest expenses. Net income fell to $3.1 billion, or $0.35 per diluted share, a major drop from $7.1 billion reported a year ago. Total revenue of $22.1 billion fell below Wall Street’s estimate for the first time in two years and was 10% less than the year prior. In addition, it lost $1.6 billion in a pre-tax charge from the discontinuation of the Bloomberg Short-Term Bank Yield Index. The report also included a $2.1 billion fee charged by the FDIC, related to the collapses of Silicon Valley Bank and Signature Bank. Financial achievements include a 9% rise in book value per share to $33.34, where BVPS is based on the balance sheet while market value is based on the share price. Tangible book value per share rose 12% to $24.46, TBVPS displaying the value of the bank’s tangible assets divided by its (current) outstanding shares. Business segment highlights included positives in global banking as well as global markets. In global banking, total investment banking fees were up 7%, and in client activity, average deposits increased 5%. In global markets, sales, and trading revenue was up 3%, and there were zero days of trading losses in 2023. Shares fell Friday amid declining revenue and hefty charges. BAC stock is down 4.96% this year after a 1.7% gain in 2023. #Finance #StockMarket #Earnings Report #Banking #Bank Of America