🔻 Google Slides After Earnings

Good afternoon! OpenAI just dropped Deep Research, an AI-powered tool designed to tackle complex queries for users who need more than a quick answer. Available to ChatGPT Pro subscribers ($200/month), it aims to help professionals in finance, policy, and engineering by pulling together detailed, well-cited research. While it’s starting with a 100-query limit, OpenAI says higher caps and broader availability are on the way.

The tool runs on a beefed-up version of OpenAI’s o3 model, fine-tuned for browsing and data analysis. It can sift through massive datasets, analyze PDFs, and even generate graphs—but OpenAI admits it still makes mistakes. The biggest question: Will Deep Research actually provide a competitive edge, or is it just a fancier way to Google? Google's already got a similar tool, and the AI research race is just heating up.

MARKETS

• Wall Street rebounded Tuesday, snapping a two-day losing streak as Big Tech took the lead. The Nasdaq rallied 1.4%, with the S&P 500 and Dow adding 0.7% and 0.3%, respectively, as investors turned their attention to strong earnings and a dose of AI-fueled optimism.

• Traders also digested weaker-than-expected jobs data, which hinted at a cooling labor market. With China’s tariff retaliation in the background, the market steadied as Wall Street weighed the Fed’s next moves on interest rates and inflation.

STOCKS
Winners & Losers

What’s up 📈

• Spotify soared 13.24% after reporting its first full year of profitability, posting 1.14 billion euros in net income and a fourth-quarter revenue beat. ($SPOT)

• Palantir Technologies jumped 23.99% after reporting stronger-than-expected fourth-quarter results, attributing the earnings beat to its artificial intelligence platform gaining traction. ($PLTR)

• Grab surged 12.56% after reports surfaced that the Southeast Asian ride-hailing and food delivery app was in merger talks with rival GoTo. ($GRAB)

• Ferrari gained 7.08% after reporting a 21% increase in net profit for 2024 and forecasting at least 5% revenue growth in 2025. ($RACE)

• Super Micro Computer climbed 8.60% amid hopes that its upcoming second-quarter business update will bring positive news. ($SMCI)

• SiriusXM rose 2.58% after Berkshire Hathaway increased its stake in the streaming company to 35%. ($SIRI)

What’s down 📉

• Estée Lauder plummeted 16.07% after issuing weak earnings guidance, announcing over $1 billion in pretax charges, and revealing plans to cut 7,000 jobs. ($EL)

• PayPal sank 13.17% despite reporting a fourth-quarter earnings and revenue beat, as concerns over a slowdown in payment volume weighed on shares. ($PYPL)

• Merck dropped 9.07% after issuing disappointing full-year earnings and revenue guidance, falling below analysts’ expectations. ($MRK)

• Clorox slipped 7.24% despite posting a fiscal second-quarter earnings and revenue beat, as the company lifted full-year earnings guidance. ($CLX)

• PepsiCo declined 4.51% after missing revenue guidance for the third consecutive quarter, citing weaker demand for snacks and beverages in North America. ($PEP)

• Illumina lost 5.26% after also being added to China’s "unreliable entity" list, raising concerns over potential business restrictions. ($ILMN)

• GEO Group and CoreCivic dropped 7.78% and 5.65%, respectively, after El Salvador offered to jail U.S. criminals and undocumented migrants, raising concerns about reduced demand for private prisons. ($GEO, $CXW)

• Vaccine stocks stumbled after Robert F. Kennedy Jr’s nomination as Health and Human Services secretary advanced to a Senate vote, with Moderna falling 6.51% and BioNTech declining 2.24%. ($MRNA, $BNTX)

EARNINGS
Alphabet Slides After Cloud Sales Fall Short of Expectations

Alphabet just reminded investors that even tech giants can trip. The company’s fourth-quarter revenue landed at $96.5 billion—just shy of expectations—but the real disappointment came from Google Cloud. The division pulled in $12 billion, missing forecasts and raising concerns about whether AI-driven cloud growth is slowing down. Investors didn’t take it well. Shares tumbled over 8% in after-hours trading, wiping out much of this year’s gains.

Big AI Bets, Bigger Bills

While cloud struggled, Alphabet is doubling down on AI. The company announced a jaw-dropping $75 billion in capital expenditures for 2025, blowing past Wall Street’s $58 billion estimate. That cash will fund data centers and infrastructure to power AI ambitions, giving a nice boost to chip supplier Broadcom, whose shares popped 6%. But with rivals like OpenAI and DeepSeek proving they can build AI models for far less, Alphabet’s spending spree is raising eyebrows.

Search Still Reigns, But Challenges Mount

Despite the cloud miss, Google’s core business held strong. Search advertising raked in $54 billion, edging past estimates, while YouTube brought in $10.5 billion—helped by a surge in election-year podcast ads. Meanwhile, Waymo and other experimental projects in Alphabet’s “Other Bets” segment fell flat, reporting just $400 million in revenue, well below expectations. Investors are increasingly questioning whether these moonshot ventures are worth the money.

Beyond earnings, Alphabet is facing growing regulatory headaches. U.S. and Chinese regulators are circling, with lawsuits targeting its search dominance and ad practices. At the same time, AI challengers are nipping at Google’s heels, with OpenAI now embedding real-time search capabilities into ChatGPT. For now, Alphabet is stuck balancing massive AI investments, legal fights, and investor jitters. Whether all that spending translates into long-term dominance—or just thinner margins—remains the trillion-dollar question.

NEWS
Market Movements

• 🚘 GM Slashes 50% of Cruise Staff After Robotaxi Exit: General Motors is laying off half of Cruise’s workforce following its decision to shut down the robotaxi business. The move comes after GM spent over $10 billion on Cruise, which faced regulatory scrutiny and leadership failures before halting operations ($GM).

• 📉 Tariff Uncertainty Puts the Fed in a Bind: The Federal Reserve faces a dilemma as Trump's tariffs threaten to both raise inflation and slow GDP growth. Economists project tariffs could shave 1.2% off growth while adding 0.7% to core inflation, potentially forcing the Fed to delay rate cuts or pivot later in the year ($SPX).

• 📱 Apple Launches 'Invites' App to Take on Partiful: Apple introduced a new event-planning app called 'Apple Invites,' allowing users to create and manage RSVPs. The app requires an iCloud+ subscription, integrating AI features for automated invitations. The move expands Apple’s services strategy amid growing subscription revenue ($AAPL).

• 🚗 Tesla’s Market Share Plummets in Scandinavia: Tesla lost ground in Sweden and Norway, with January registrations dropping 44% and 38% year-over-year despite overall auto sales rising. Public sentiment toward the brand soured following Elon Musk’s political remarks, cutting Tesla’s market share in Sweden to 2.1% and in Norway to 7.4% ($TSLA).

• 📉 Vanguard Slashes Fees, Pressuring Rivals: Vanguard is cutting fees on 87 U.S. funds by an average of 20%, saving investors $350 million this year. The move, its largest-ever fee reduction, ramps up pressure on competitors like BlackRock and Fidelity ($BLK).

• 🕶️ Meta Nears $100 Billion in VR Investments: Meta is set to surpass $100 billion in total spending on VR and smart glasses, allocating another $20 billion to Reality Labs this year. Despite generating $2.1 billion in 2024 revenue, the unit posted a staggering $17.7 billion operating loss. Meta is now shifting its focus toward AI-powered Ray-Ban smart glasses over its metaverse ambitions ($META).

• 🏈 Super Bowl 59 to Stream for Free on Tubi: Fox is making history by streaming this year’s Super Bowl on its ad-supported platform, Tubi. The move is aimed at expanding Tubi’s audience, which recently reached 97 million monthly users ($FOXA).

• 📈 Deel Eyes IPO After Strong Revenue Growth: HR software firm Deel hit an $800 million annual revenue run rate, up 70% year-over-year, and is preparing for an IPO as early as 2026. The company’s valuation jumped to $12.6 billion after a $300 million secondary share sale, though it remains embroiled in a money laundering lawsuit.

• 🔧 Microsoft Drops VPN Feature from 365: Microsoft is removing the built-in VPN feature from Microsoft 365 on February 28, citing low usage. The decision follows a recent subscription price hike of $3 per month to include AI features ($MSFT).

• 📉 U.S. Job Openings Drop Sharply in December: Job openings fell to 7.6 million, the lowest level since September and below expectations of 8 million. The decline was driven by drops in professional services, education, and finance, though hiring and quit rates held steady. The Fed is watching the labor market closely for signs of cooling ($SPX).

EARNINGS
Echelon Of Earnings From AMD, Chipotle, Snapchat

AMD’s Data Center Miss Overshadows Strong Earnings

AMD delivered a solid earnings beat, but investors were fixated on a shortfall in its data center business. The chipmaker posted $7.66 billion in revenue, surpassing expectations, yet its crucial data center unit fell short, reporting $3.86 billion instead of the projected $4.14 billion. Despite a 69% year-over-year jump in data center sales—driven by AI chip demand—Wall Street wanted more. Shares dropped 8% in extended trading. CEO Lisa Su remains optimistic, forecasting strong double-digit growth in 2025 as AMD scales its AI chip business, but for now, the market isn’t buying in.

Chipotle’s Forecast Sours Otherwise Strong Earnings

Chipotle kept the burritos rolling with solid Q4 earnings, but its outlook left investors with indigestion. The company posted $2.85 billion in revenue, matching estimates, while earnings per share came in slightly ahead. Traffic remained strong, up 4% year over year, and the brand continued outpacing the broader restaurant industry. However, a lukewarm 2025 same-store sales forecast of low- to mid-single-digit growth disappointed Wall Street, leading to a 5% drop in after-hours trading. Chipotle remains bullish on expansion, planning to open up to 345 new locations—most featuring drive-thru “Chipotlanes”—but investors were hoping for a bigger growth story.

Snap Pops on Earnings Beat, But Guidance Disappoints

Snap’s stock jumped 6.55% after the social media company reported a rare earnings win, with revenue climbing 14% to $1.56 billion and daily active users hitting 453 million—both ahead of expectations. The company even turned a profit, a major turnaround from last year’s loss. However, the celebration was short-lived as Snap’s Q1 guidance underwhelmed, with projected earnings below analyst expectations. The company cited increased investment spending, legal costs, and a seasonal marketing shift as key factors. While its Snapchat+ subscription service continues to gain traction, adding 2 million subscribers in Q4, Snap still faces regulatory scrutiny and heavy competition from Meta and TikTok.

WEALTH
Trump Signs Order to Create U.S. Sovereign-Wealth Fund

President Trump is making big moves again—this time by signing an executive order to create a U.S. sovereign wealth fund. The goal? Monetize America’s balance sheet, invest in national projects, and, according to Trump, maybe even play a role in securing a deal for TikTok.

At an Oval Office ceremony, Trump framed the fund as a game-changer for U.S. economic strategy, promising it would be “one of the biggest.” Treasury Secretary Scott Bessent backed up the urgency, pledging to “stand this thing up within the next 12 months.”

How Would It Work?

Sovereign wealth funds aren’t new—Norway, China, and Saudi Arabia have been running them for years, leveraging oil profits and trade surpluses to bankroll investments. The U.S., however, has a slight problem: no surplus.

The government’s balance sheet is heavy on real estate and student loans but light on liquid assets, making funding a massive investment vehicle tricky. Trump floated the idea of using tariff revenue to fund the venture—though that assumes the recently delayed tariffs actually go into effect and generate enough cash.

A New Player in Global Markets?

If it gets off the ground, the fund would join a crowded field of government-backed investors influencing everything from infrastructure to AI. Trump’s team has hinted that it could be used to invest in manufacturing, defense, and critical supply chains, with Commerce Secretary nominee Howard Lutnick suggesting the U.S. should get equity stakes in companies it does business with—think vaccine makers and defense contractors.

TikTok’s Wild Card Role

Trump also hinted that the fund could somehow facilitate TikTok’s U.S. future, though the details remain murky. The president has been pushing for an American-owned TikTok spin-off and previously suggested the government itself should take a 50% stake. Whether the fund plays a role in that deal—or if it’s just Trump thinking out loud—remains to be seen.

The executive order gives officials 90 days to draft a plan detailing investment strategies, governance, and legal considerations. But without a clear funding source, it’s unclear how this fund would compete with the trillion-dollar giants already dominating the space.

Calendar
On The Horizon

Tomorrow

Tomorrow brings another check-up on the labor market with the ADP private payroll report, offering insights into hiring trends nationwide. December saw 122,000 new jobs added—solid, but a step down from November’s 146,000. Economists are cautiously optimistic about January’s numbers, with seasonal hiring expected to lend a boost.

On the earnings front, a packed slate awaits. Uber ($UBER), Arm Holdings ($ARM), MicroStrategy ($MSTR), Qualcomm ($QCOM), GSK ($GSK), Ford ($F), Toyota ($TM), Boston Scientific ($BSX), Allstate ($ALL), The New York Times ($NYT), and Harley Davidson ($HOG) are all set to unveil their latest results.

Before Market Open:

• Disney’s streaming journey has been a rocky road, but the recent merger of Fubo and Hulu + Live TV is a major win. The deal adds over 1.6 million subscribers in one swoop and clears some legal headaches. Now, the focus shifts to keeping customers hooked, turning a profit, and dealing with slowing revenue at its Asian theme parks. Consensus: $1.43 EPS, $24.7 billion in revenue. ($DIS)

• Novo Nordisk recently stumbled with the failure of its new weight-loss drug, CagriSema, a rare setback for the pharma giant. Shares have taken a hit over the past year, but strong sales from current blockbusters like Wegovy and Ozempic could offer a silver lining. For patient investors, this dip might present a chance to buy in at a more attractive valuation. Consensus: $0.85 EPS, $11.34 billion in revenue. ($NVO)

NEWS
The Daily Rundown

• 🌍 Santorini Hit by Over 1,200 Earthquakes, Residents Evacuate: The Greek island of Santorini has experienced a surge in seismic activity, with more than 1,200 tremors recorded since January 24. Nearly 100 quakes occurred in a single day, prompting evacuations and school closures. Authorities say the earthquakes are linked to underwater faults rather than the island’s volcano, though experts are closely monitoring the situation.

• 🍗 Chick-fil-A Uses Drones to Optimize Drive-Thrus: Chick-fil-A has turned to drone technology to improve drive-thru efficiency, helping boost revenue per restaurant above that of McDonald's. A franchise in Illinois increased sales by 50% after using aerial footage to identify slowdowns, while a new Atlanta location operates solely as a drive-thru, serving up to 700 cars per hour. Drive-thrus now account for 60% of Chick-fil-A’s total sales, as fast-food chains nationwide expand their drive-up options to meet demand.

• 🇺🇸 U.S. Delays Tariffs on Mexico and Canada After Last-Minute Talks: The U.S. paused its planned 25% tariffs on Mexican and Canadian imports just hours before they were set to take effect. Mexico reached a deal with President Trump to deploy 10,000 troops to its northern border to curb illegal migration and fentanyl trafficking, while Trump agreed to crack down on weapons smuggling. Canada secured a 30-day delay after Prime Minister Trudeau pledged to strengthen border security and collaborate on crime prevention. Meanwhile, the 10% tariff on Chinese imports remains in place, with Beijing contesting the move at the World Trade Organization.

• 🚫 Musk and Trump Push to Dismantle USAID Amid Protests: The future of the U.S. Agency for International Development (USAID) is in jeopardy as Elon Musk and President Trump move to shut it down. Secretary of State Marco Rubio, now acting as USAID administrator, suggested the agency could be overhauled rather than eliminated. The agency, which managed $40 billion in humanitarian aid last year, faces mounting uncertainty after Musk ousted its leadership and blocked staff from its offices. Over 100 employees protested outside USAID headquarters, joined by Democratic lawmakers.

• 🏠 Climate Change Could Wipe Out $1.47 Trillion in U.S. Home Values: A new study from First Street Foundation projects that rising sea levels, wildfires, and extreme weather could erase nearly $1.5 trillion in U.S. home values over the next 30 years. The impact will be most severe in low-income communities, which often lack climate-resilient infrastructure. Researchers urge policymakers to update property assessments and invest in mitigation efforts.

• 🏈 New Orleans Saints and Pelicans Linked to Church Scandal: Internal emails have revealed that executives from the New Orleans Saints and Pelicans assisted the city’s Roman Catholic archdiocese in managing media coverage of a clergy molestation scandal. The teams’ vice president of communications reportedly advised church officials on crisis messaging. Survivors and advocacy groups have condemned the revelations, accusing the teams of helping minimize the scandal’s impact.

• 🏫 Trump Administration Eyes Major Overhaul of Education Department: The Trump administration is considering executive orders that could significantly restructure or dismantle parts of the Department of Education. The move aligns with past efforts to reduce federal involvement in education and expand school choice. Supporters argue it would give parents and local governments more control, while critics warn it could weaken public education and disproportionately impact low-income communities.

RESOURCES
The Federal Reserve Resource

Join our small yet growing subreddit 🚀: https://www.reddit.com/r/investinq/

Wall Street Reads 💎 (Best Books):

• Stock Market Books📚
  https://drive.google.com/file/d/1NQ-vdLE1afXFcc5PwDRp1d5VSHzDly88/view?usp=sharing

• Options Trading Books📗 https://drive.google.com/file/d/1xeYL3IpjT623CJpO_Ole1Z-GuzHQQJzg/view?usp=sharing

• Business Books 📖https://drive.google.com/file/d/1VfuTqhPVB2YjDOd0N56UhF6kmZU-kLci/view?usp=sharing

Check out our latest issues 🎯: https://investinq.beehiiv.com