Market Update: Midday Trading Highlights
Investors have been keeping a close eye on companies making headlines during midday trading, particularly in the tech and semiconductor sectors.
Nvidia and Semiconductor Stocks Take a Hit
Nvidia, the leading chipmaker, saw its shares plummet nearly 17%. Concerns arose regarding the performance of a language model from the Chinese startup DeepSeek, which has sparked questions about the sustainability of investments in artificial intelligence. This drop is significant, as it positions Nvidia for its worst trading day since March 2020. Other semiconductor companies followed suit, with Broadcom and Micron experiencing drops of over 17% and 11%, respectively. Advanced Micro Devices (AMD) also faced a decline, sliding more than 6%, while the VanEck Semiconductor ETF (SMH) fell nearly 10%.
Tech Giants Struggle Amid AI Uncertainty
Major technology firms Microsoft and Oracle weren’t immune to the prevailing market sentiment, with their stocks declining more than 2% and 13%. Investors are concerned that substantial investments in AI data centers may not yield expected returns. Microsoft announced plans to invest $80 billion in building these centers, half of which will be focused on projects within the United States. Meanwhile, Oracle supports the AI infrastructure initiative Stargate, recently announced by former President Donald Trump.
Power Sector Faces Challenges
Power companies involved in AI data center development also faced significant downturns. Constellation Energy and Vistra saw their shares fall dramatically, with drops of more than 20% and 28%, respectively. Additionally, GE Vernova and Talen Energy both reported declines surpassing 21%.
Cryptocurrency Stocks Under Pressure
The recent fluctuations among tech stocks have extended to cryptocurrency-related equities. Coinbase and MicroStrategy fell over 6% and 1%, respectively. Bitcoin miners associated with AI ventures experienced even steeper declines, with Core Scientific and TeraWulf both dropping over 29%. Iren, formerly known as Iris Energy, saw its shares decrease by more than 24%.
AT&T Reports Strong Earnings
In contrast to the overall trend, AT&T’s shares rose more than 6% after the telecommunications giant reported adjusted fourth-quarter earnings of 54 cents per share, surpassing the anticipated 50 cents from analysts. Its revenue of $32.3 billion also exceeded expectations, coming in above the consensus estimate of $32.02 billion.
SoFi Technologies and Travel Stocks Experience Mixed Results
SoFi Technologies experienced a significant drop of 10.3% following a disappointing outlook for the first quarter, overshadowing better-than-expected earnings and revenue. Conversely, Travel + Leisure saw a modest uptick of over 2% after Bank of America upgraded the stock from underperform to buy, citing potential double-digit earnings growth due to a resilient leisure travel market.
Titan Machinery and Exelixis Receive Upgrades
In the retail sector, Titan Machinery surged 10.4% after Baird upgraded its rating from neutral to outperform, noting that the stock could benefit from dwindling inventories. Similarly, Exelixis gained slightly over 1% following an upgrade from Morgan Stanley, which deemed its valuation "undemanding."
Ralph Lauren Faces Downgrade
On the downside, Ralph Lauren’s stock fell 3.2% after Raymond James downgraded it from outperform to market perform. The investment firm highlighted limited upside potential due to the recent rally in its share price and the adverse effects of a stronger U.S. dollar on its financial performance.
In summary, midday trading paints a mixed picture, with tech and semiconductor stocks under significant pressure while some companies thrive amid investor optimism and positive earnings reports.
