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  • ✍🏼 Meta Is Cutting Poor Performers

✍🏼 Meta Is Cutting Poor Performers

+ Intel to Turn Venture Arm Into Separate Firm With New Name

January 14, 2025

Good afternoon! Blue Origin’s debut launch of its towering New Glenn rocket didn’t exactly reach for the stars on Monday—it was called off due to a “subsystem issue” at the last minute. The 30-story rocket is supposed to be Blue Origin’s answer to SpaceX’s dominance, but after a decade of development, the Bezos-backed space venture still can’t seem to catch a break.

Meanwhile, Elon Musk’s SpaceX continues to launch at warp speed, accounting for 65% of US commercial launches last year. New Glenn, billed as twice as powerful as SpaceX’s Falcon 9, could open doors to major Pentagon contracts if—and it’s a big if—it ever makes it off the ground. For now, Bezos’ cosmic aspirations are still waiting for liftoff.

MARKETS

*Stock data as of market close*

  • Wall Street kicked off the day with optimism after December’s producer price index (PPI) came in at a cool 0.2%—half of what analysts expected. The Dow gained 221 points (0.5%) as investors cheered signs of easing inflation, while the S&P 500 managed a slight 0.1% bump. The Nasdaq, weighed down by struggling tech stocks, slipped 0.2% to close in the red.

  • But the real showdown is set for Wednesday’s CPI report. Markets are on edge, with options data hinting at a potential 1% swing either way. A soft CPI print could soothe rate-cut hopes, while a hotter-than-expected number might dash dreams of Fed-friendly policies in 2025.

STOCKS
Winners & Losers

What’s up 📈

  • H&E Equipment Services skyrocketed 105.48% after United Rentals announced a $4.8 billion acquisition, valuing H&E shares at $92 each. United Rentals also gained 5.9%. ($HEES)

  • Rigetti Computing soared 47.93%, followed by D-Wave Quantum climbing 23.50% and Quantum Computing rising 13.96% as quantum computing stocks rebounded. ($RGTI, $QBTS, $QUBT)

  • Applied Digital gained 9.98% after Macquarie announced plans to invest up to $5 billion in its AI data centers. ($APLD)

  • Hesai jumped 10% after Goldman Sachs upgraded the stock to "buy," citing underestimated growth potential from its product cycle. ($HSAI)

  • Celanese rose 5.37% following a rare double upgrade to "buy" from Bank of America, highlighting an attractive valuation. ($CE)

  • KB Home increased 4.82% after beating fourth-quarter earnings estimates, reporting $2.52 per share on $2 billion in revenue. ($KBH)

  • Instacart climbed 4.36% after BTIG upgraded the grocery delivery company to "buy," citing strong order growth. ($CART)

What’s down 📉

  • Signet Jewelers plummeted 21.66% after lowering its fourth-quarter guidance due to weak holiday sales and customer spending at lower price points. ($SIG)

  • Eli Lilly fell 6.59% after reducing its 2024 revenue outlook, attributing it to lower-than-expected sales of its weight-loss drugs Mounjaro and Zepbound. ($LLY)

  • Snap dropped 6.67%, and Meta Platforms fell 2.31%, despite TikTok's ban discussions failing to lift competing social media stocks. ($SNAP, $META)

  • Las Vegas Sands lost 3.99% after Morgan Stanley downgraded the casino operator, citing concerns over slowing revenue growth in its Asian properties. ($LVS)

  • Boeing declined 2.08% as reports showed its 2024 airplane deliveries fell to 348, a third of Airbus' 766 deliveries. ($BA)

TECH
Meta to Cut Roughly 5% of Staff, Targeting Lowest Performers

In a move that feels like déjà vu, Meta announced it’s cutting about 5% of its workforce—or around 3,600 jobs—by February. But this round of cuts isn’t about reducing costs—it’s about raising the performance bar. In a memo to employees, CEO Mark Zuckerberg said he wants to “move out low performers faster” and focus on assembling the best talent as Meta gears up for an “intense year” of building in AI, smart glasses, and the future of social media.

A Balancing Act

While some roles are being slashed, new ones are being created. Meta plans to backfill these positions later this year, signaling that the company is doubling down on key growth areas. However, Wall Street didn’t exactly cheer—shares fell more than 2% after the announcement.

The memo also comes on the heels of other major changes, including the end of Meta’s fact-checking program and a rollback of diversity efforts, moves that some see as attempts to cozy up to the incoming Trump administration.

Raising Eyebrows

Zuckerberg’s efficiency push has sparked internal debate, with some employees questioning whether these cuts disproportionately affect underrepresented groups—especially after recent comments about fostering more "masculine energy" in corporate culture. And while Meta says the focus is on boosting performance, critics argue the policy shifts could further erode trust among its workforce, particularly in areas tied to inclusion and oversight.

The Bigger Picture

Zuckerberg’s focus on efficiency isn’t new—he dubbed 2023 as Meta’s "year of efficiency" and cut over 20,000 roles across the company. Now, he’s positioning Meta to stay competitive as it pivots toward AI-led growth. But this time, the cuts have reignited concerns about whether Meta can pull off this balancing act without losing its edge—or its people.

NEWS
Market Movements

VENTURE
Intel to Turn Venture Arm Into Separate Firm With New Name

Intel is spinning off its venture capital arm, Intel Capital, into an independent investment fund, aiming to inject new energy (and new money) into its operations. Intel, which will stay on as an anchor investor, says the standalone fund will start operating under a new name in the second half of 2025, boasting over $5 billion in assets under management.

The move is all about flexibility. By stepping out of Intel’s shadow, Intel Capital can raise funds from external backers while continuing to make strategic bets on innovative startups. The current Intel Capital team will transition to the new entity, and day-to-day operations will carry on without interruption. Interim co-CEO David Zinsner called the split a "win-win" that unlocks new capital while keeping Intel’s strategic partnership intact.

A Legacy of Bold Bets

Intel Capital, established in 1991, was a pioneer in corporate venture capital. Over the years, it has invested more than $20 billion in over 1,800 companies, with a portfolio spanning AI, cloud, 5G, and robotics. Its big-name bets include AI chipmaker SambaNova and robotics firm Figure, proving that it knows how to pick winners in the tech game.

But this spinoff isn’t happening in a vacuum. Intel has faced significant headwinds, reporting a record $16.6 billion quarterly loss last year—the largest in its history. To turn things around, the company launched a $10 billion cost-cutting plan that included shedding 15,000 jobs and spinning off other divisions like its FPGA business, Altera.

The Bigger Picture

While Intel Capital’s newfound independence mirrors similar moves in Silicon Valley (think SAP’s Sapphire Ventures), it underscores Intel’s broader effort to regain its footing amid fierce competition. As Nvidia and AMD dominate the chip scene, Intel’s restructuring is a bet on long-term survival and reinvention.

For Intel Capital, this next chapter presents an opportunity to expand its venture portfolio while navigating the complex landscape of global tech. Meanwhile, Intel’s future depends on whether it can turn its renewed focus on cutting-edge chipmaking into a comeback story worth watching.

Calendar
On The Horizon

Tomorrow

Tomorrow’s spotlight: It’s a double feature with the start of earnings season and the final CPI report ahead of the Fed’s January rate call.

CPI tracks the ups and downs in consumer prices—the stuff that makes or breaks your monthly budget. Last month’s 2.7% inflation reading matched predictions but still pointed to a longer road ahead for hitting the Fed’s 2% goal. If tomorrow’s number hints at more stubborn inflation, brace for markets to flinch and rate cut hopes to dwindle further.

NEWS
The Daily Rundown

  • 💰 Ackman’s Berkshire Ambition: Billionaire Bill Ackman announced plans to acquire Howard Hughes Corp. for $1 billion, aiming to create a "modern-day Berkshire Hathaway." Pershing Square, which already owns 37.6% of the real estate company, seeks to leverage Hughes' properties for broader acquisitions. Ackman’s pitch has sparked comparisons to Warren Buffett’s strategy, though some analysts are skeptical of his ability to scale to Berkshire’s $956 billion valuation.

  • 🔥 LA Rent Hikes After Fires Spark Outrage: Reports have emerged that Los Angeles landlords are hiking rents for fire-displaced residents, with some prices increasing by over 70%. Officials, including California AG Rob Bonta, warned that price gouging during disasters is illegal, with rent increases capped at 10% for the first six months after a declared disaster. Governor Newsom extended anti-gouging protections through January 2026 and waived environmental building regulations to help rebuild faster.

  • 🏛 Trump’s Cabinet Nominee Hearings Begin: The Senate began hearings for President-elect Trump’s key cabinet picks, with Pete Hegseth nominated for defense secretary and Marco Rubio for secretary of state. Critics argue that Hegseth’s military commentary background raises concerns over impartiality. Other high-profile appointees include Pam Bondi as attorney general and Kristi Noem for Homeland Security. The hearings are expected to spark heated debates in the lead-up to Trump’s inauguration.

  • 💼 "Ghost Jobs" Haunt Job Seekers: Despite job openings appearing abundant online, a staggering 18-22% of listings in 2024 resulted in no hires, according to Greenhouse data. Companies may post these "phantom" jobs to gauge interest or signal growth without actual hiring plans. Job seekers have voiced frustration over wasting time on cover letters and applications for roles that may not exist. Platforms like LinkedIn and Greenhouse are introducing verified job tags to help users avoid dead ends.

  • 🛍️ Lululemon's Wardrobe Boost: Lululemon reported higher-than-expected Q4 sales, as consumers splurged on premium activewear amid the return-to-office wave. Competitors Abercrombie & Fitch and Nordstrom also reported solid holiday sales, but Wall Street was unimpressed, with shares slipping due to concerns over reliance on discounts. Mastercard and Visa data showed holiday retail spending on apparel rose over 5%, driven by increased demand for work-friendly fashion.

  • 📦 China’s Trade Surplus Soars: China recorded a nearly $1 trillion trade surplus in 2024, more than double Germany’s record high. The surge was fueled by exports of EVs, solar panels, and manufactured goods, bolstered by government subsidies. However, domestic demand remained weak, with imports rising just 1% amid slowing consumer confidence following a housing market crash. Economists warn that new tariffs promised by the incoming Trump administration could dampen China’s export dominance in 2025.

  • 🕊️ Progress in Israel-Hamas Ceasefire Talks: Reports indicate that Israel and Hamas are nearing a potential ceasefire agreement after months of conflict. Negotiators are finalizing terms for a hostage exchange and humanitarian aid corridor, though officials warn the situation remains delicate. If successful, the agreement could provide temporary relief to civilians and mark a significant step toward de-escalation.

  • 🧠 J&J’s $14.6 Billion Neuroscience Buy: Johnson & Johnson announced a $14.6 billion acquisition of Intra-Cellular Therapies, known for its breakthrough psychiatric drug Caplyta. The drug, which treats schizophrenia and bipolar disorder, generated nearly $500 million in sales last year. The acquisition, including a 39% stock price premium, underscores J&J’s focus on expanding its neuroscience portfolio amid rising demand for mental health treatments.

  • 🎤 Carrie Underwood to Perform at Trump Inauguration: Country music star Carrie Underwood will headline Donald Trump’s inauguration next week, adding star power to an event already sparking political debate. Underwood’s participation has drawn mixed reactions, with critics voicing concerns over her alignment with the event. Trump’s team is finalizing the entertainment lineup as inauguration day approaches amid heightened security preparations.

RESOURCES
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