Wedbush analysts have projected a significant increase in Microsoft's (MSFT, Financial) annual sales, which are expected to jump nearly 12% by 2025, driven by advancements in artificial intelligence (AI). With over 60% of Microsoft's installed base predicted to utilize AI within the next three years, the company is poised for a new wave of growth. The anticipation of AI use cases being rolled out in the coming months has strengthened Microsoft's competitive edge against rivals Amazon (AMZN, Financial) and Google (GOOG, Financial) (GOOGL). Wedbush's recent partner checks indicate strong deployments of Microsoft's Co-Pilot with customers, potentially adding an estimated $25 billion to the company's top-line by FY25. Microsoft is gearing up to report its fiscal second-quarter results on January 30.
December's retail sales outperformed expectations, rising 0.6% from November and surpassing the anticipated 0.4% increase. Core retail sales also saw a 0.4% month-over-month increase, beating the consensus of 0.2%. Year-over-year, retail sales jumped 5.6%, significantly ahead of the inflation rate for the month. The motor vehicle and parts dealers category experienced notable growth, as did general merchandise stores, including Walmart (WMT, Financial), Target (TGT, Financial), and Costco (COST, Financial). The restaurant category and health & personal care stores also saw impressive year-over-year gains.
Stock index futures indicated a lower opening on Wednesday, with S&P futures (SPX), Dow futures (INDU), and Nasdaq 100 futures (NDX:IND) all in the red. This follows a decline in equities on Tuesday, influenced by Fed's Christopher Waller's comments that reinforced the message that the Federal Open Market Committee (FOMC) does not see an immediate need to cut rates. Waller's views, which are believed to mirror those of Fed Chair Powell, emphasized a focus on core CPI and the labor market's role in reducing inflation.
Shares of Rumble (RUM, Financial) experienced a surge over 7%, attributed to former President Donald Trump's success in the Iowa caucuses. Rumble, a platform seen as a conservative alternative to YouTube, benefited from the political development. Meanwhile, Spirit Airlines (SAVE, Financial) shares continued to decline by 5% following a federal judge's block of the planned $3.8 billion sale to JetBlue Airways (JBLU, Financial) on antitrust grounds.
Nutanix (NTNX, Financial) shares rose 2.5% in premarket trading as William Blair upgraded the cloud software company. The upgrade was based on a "tectonic shift" in the infrastructure software market, particularly due to Broadcom’s (AVGO, Financial) acquisition of VMware, which is expected to create significant opportunities for Nutanix to gain market share.
Several stocks experienced significant losses, with DatChat (DATS) dropping 32% after announcing a public share offering. Other notable decliners included Acurx Pharmaceuticals (ACXP), Spirit Airlines (SAVE, Financial), Allakos (ALLK), and Bit Brother (BETS), among others.
Conversely, Bullfrog AI Holdings Inc (BFRG, Financial) saw a 26% increase on news of partnering with Lieber Institute, and Impinj Inc (PI, Financial) gained 12% after guiding revenue above consensus. Solid Power (SLDP, Financial) also rose 11% following the announcement of new agreements with SK On.
Hedge funds have been actively covering shorts on U.S. equities, with a particular focus on tech and growth large-caps. The Nasdaq 100 (COMP.IND) (NDX) (QQQ) positions are notably net long, while the S&P 500 (SP500) (SPY) (IVV) (VOO) and Russell 2000 (RTY) (IWM) show more varied positioning among funds.
The airline sector remains abuzz after the blocked merger between Spirit Airlines (SAVE, Financial) and JetBlue Airways (JBLU, Financial), with analysts reassessing the outlook for Spirit and considering the potential re-emergence of Frontier Group (ULCC) as a suitor.
Charles Schwab (SCHW, Financial) reported Q4 earnings that surpassed expectations, while U.S. Bancorp (USB, Financial) also released its Q4 earnings, showing a decline from previous periods but still beating consensus estimates.
Main Street Capital (MAIN, Financial) estimated a rise in net asset value per share and reported strong preliminary Q4 net investment income, while Albemarle (ALB, Financial) announced cost-cutting measures to improve cash flow and financial flexibility.
Google (GOOG, Financial) (GOOGL) is set to lay off several hundred workers from its advertising sales division as part of a strategic shift in operations, aiming to automate more processes and focus on different customer segments.
The USPTO has invalidated all claims made by Pfizer’s (PFE, Financial) recent acquisition, Seagen (SGEN, Financial), regarding a patent related to Enhertu, a cancer therapy marketed by Daiichi Sankyo (DSKYF, Financial) with AstraZeneca (AZN, Financial).
