Boeing, Starbucks, Durable Goods, and AI Take the Spotlight
The markets face another turbulent day as AI disruptions, corporate earnings, and key economic data dominate the agenda.
Top Stories
DeepSeek Disrupts AI Markets
Chinese AI startup DeepSeek has shaken the tech world with the debut of its low-cost, high-performance AI model. Priced under $6 million, this innovation sparked a global sell-off in technology stocks, raising concerns about U.S. dominance in the AI race.
Market Impact: The S&P lost over $1 trillion in value, while the NASDAQ saw a 5% dip before rebounding slightly. Nvidia’s market cap plummeted by $515 billion, reflecting a 16.97% decline in its share price.
Expert Insight: OpenAI’s CEO, Sam Altman, praised DeepSeek's capabilities but cautioned against overreaction, noting Nvidia’s GPU leadership remains critical.
Chipmakers Hit Hard
The fallout from DeepSeek’s announcement was felt across the semiconductor sector.
Broadcom (-17%), Marvell (-19%), Micron (-11%), and AMD (-6%) all saw significant declines.
The VanEck Semiconductor ETF (SMH) dropped 9.83%, signalling widespread concern over potential disruption to AI-driven chip markets.
Microsoft and Oracle Face AI Scrutiny
Microsoft (-2%) and Oracle (-13%) fell amid concerns over massive AI infrastructure investments.
Microsoft plans to spend $80 billion on data centres in 2025, while Oracle faces scrutiny over its involvement in Trump’s Stargate AI project.
Energy Stocks Decline
Companies powering AI infrastructure faced sharp losses:
Constellation Energy (-18%), Vistra (-27%), GE Vernova (-20%), and Talen Energy (-22%).
These declines reflect fears about the high costs of supporting AI data centres in a volatile market.
Cyberattack on DeepSeek
DeepSeek faced a malicious cyberattack, temporarily limiting user registrations. As the most-downloaded app, surpassing ChatGPT, DeepSeek’s rapid rise underscores its growing influence in the competitive AI landscape.
Market Movers
Direxion Daily Semiconductor Bear 3X Shares (SOXS): Rose 22.83% to $22.22, benefitting from bearish sentiment in the semiconductor sector.
Nvidia (NVDA): Fell 16.97% to $118.42 amid concerns over AI-driven competition.
AT&T (T): Climbed 6.25% to $24.14 after strong Q4 earnings beat expectations.
Corporate Highlights
Apple (AAPL):
Shares rose 3.18% to $229.86 after rolling out "Apple Intelligence" AI, designed to streamline tasks like email summarisation. However, the feature faced early criticism for inaccuracies in news summaries, underscoring challenges in AI integration.
Starbucks (SBUX):
Starbucks’ stock increased 1.22% to $100.02 ahead of its Q1 earnings report. Analysts project revenue at $9.33 billion (-1% YoY) and EPS at $0.68 (down from $0.90). Challenges include declining U.S. same-store sales and reduced promotions under CEO Brian Niccol.
SoFi Technologies (SOFI):
Dropped 10.27% to $16.08 as a weaker-than-expected Q1 outlook overshadowed strong Q4 earnings.
Coming Up Today
US Durable Goods Orders (December):
Expected: +0.8% MoM (Previous: -1.1%).
Time: 2:30 PM GMT.
Impact: Watch USD crosses for market reactions.
US Consumer Confidence (January):
Forecast: 106 (Previous: 104.7).
Time: 4:00 PM GMT.
Impact: USD crosses.
What to Watch
Boeing (BA):
Boeing is expected to report a $4 billion loss for Q4. Key figures to watch include:
Revenue: $15.2 billion (missed expectations of $16.3 billion).
EPS: A loss of $5.46 per share, significantly worse than the expected loss of $1.57 per share.
The results reflect production disruptions caused by a machinist strike.
General Motors (GM):
Q4 earnings will provide insights into EV production and future guidance. Shares are up 5.5% over three months but remain 10% below their November high.
Lockheed Martin (LMT):
Q4 results will reveal the impact of reduced defence spending. Shares are down 10.4% in three months, reflecting investor caution amid declining global demand.
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#DeepSeek #AI #Nvidia #Starbucks #Boeing #Semiconductors #Microsoft #Oracle #EarningsSeason #TechDisruption
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