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  • šŸ‡ØšŸ‡³ Alibaba Is Leading In AI?

šŸ‡ØšŸ‡³ Alibaba Is Leading In AI?

+ Earnings From Broadcom, Hewlett Packard, Costco & Kroger

Good afternoon! Discord might be ready to level upā€”this time on Wall Street. The online chat platform is reportedly in early talks with bankers about a potential IPO, setting the stage for one of the most anticipated public listings in tech. With a user base packed with gamers and retail traders, an offering could generate plenty of buzz, not to mention a much-needed boost for the sluggish IPO market.

If it does go public, Discord could take notes from Reddit, another online community hub that successfully navigated the IPO process. The company was last valued at $15 billion in 2021, and while Redditā€™s stock has had a strong run since its debut, the real test will be whether Discord can turn its cult-like following into sustainable profits.

MARKETS

  • Stocks took another dive Thursday as tariff turmoil kept markets on edge. The S&P 500 slid 1.8%, the Dow shed 427 points, and the Nasdaq plunged 2.6%, officially entering correction territory.

  • A brief pop followed news that Canada and Mexico got a one-month tariff exemption, but the relief didnā€™t last. Investors shrugged off the concession, and by the closing bell, the sell-off was back in full swing.

STOCKS
Winners & Losers

Whatā€™s up šŸ“ˆ

  • BJā€™s Wholesale Club surged 12.23% after beating earnings expectations and outlining expansion plans. ( $BJ )

  • Burlington Stores climbed 8.74% as same-store sales exceeded forecasts and management offered a cautiously optimistic economic outlook. ($BURL )

  • Veeva Systems jumped 7.37% following a strong beat-and-raise earnings report. ( $VEEV )

  • Zscaler gained 2.9% after surpassing analyst estimates and issuing upbeat guidance for the coming quarter. ( $ZS )

  • Rigetti Computing rose 4.03% despite missing Wall Street expectations, as investor enthusiasm for quantum computing remained high. ( $RGTI )

  • Teladoc increased 4% on news that it signed a deal with Eli Lilly to offer weight-loss drug Zepbound to self-paying patients. ( $TDOC )

Whatā€™s down šŸ“‰

  • Venture Global plummeted 36.1% after reporting a decline in revenue, disappointing early investors. ( $VG )

  • MongoDB tanked 26.94% despite an earnings beat, as weak forecasts for next quarter spooked investors. ( $MDB )

  • Grindr tumbled 16% following a wider-than-expected net loss for the full year. ( $GRND )

  • Hims & Hers Health dropped 15.9% after a Texas court ruled that there may no longer be a shortage of Zepboundā€™s key ingredient. ( $HIMS )

  • Marvell Technology fell 19.8%, dragging down the semiconductor sector despite a modest earnings beat. ( $MRVL )

  • Nvidia lost 5.74%, ON Semiconductor fell 5.6%, and TSMC dropped 4.6% in sympathy with Marvellā€™s weak outlook. ( $NVDA ) ( $ON ) ( $TSM )

  • Tesla declined 5.6% as momentum stocks continued to struggle. ( $TSLA )

  • Applovin sank 18.4%, while Palantir fell 10.73%, as investors pulled back from high-risk trades. ( $APP ) ( $PLTR )

AI
Alibaba Shares Soar After Chinese Tech Giant Unveils New DeepSeek Rival

China just went all-in on AI, and Wall Street is taking notes.

Alibaba sent shockwaves through the stock market after unveiling its latest AI reasoning model, QwQ-32B, a high-efficiency rival to OpenAI and DeepSeek. The news ignited a frenzyā€”Alibabaā€™s Hong Kong shares spiked 8.4%, dragging Chinaā€™s tech index up 5.4%, with Tencent and Kuaishou notching double-digit gains. Investors, it seems, arenā€™t just buying into Alibabaā€”theyā€™re buying into Chinaā€™s AI dominance.

The AI Arms Race Is Heating Up

Chinaā€™s tech giants are rolling out AI models at breakneck speed. Tencent just introduced its open-source video model Hunyuan, Kuaishou launched its own AI-driven platform, and Manus AI debuted a ā€œgeneral AI agentā€ that claims to outperform OpenAIā€™s DeepResearch. Meanwhile, Alibaba is pouring $53 billion into AI infrastructure over the next three years, betting big that its latest model will cement its place at the top.

Chinaā€™s AI Push Is Government-Backedā€”And It Shows

Beijing isnā€™t just watching from the sidelinesā€”itā€™s fueling the AI boom. At this weekā€™s National Peopleā€™s Congress, China doubled down on AI support, vowing to accelerate development in everything from intelligent manufacturing to large-scale AI models. The message? China isnā€™t playing catch-upā€”itā€™s leading the charge. That backing is why Alibaba has added $153 billion in market value since January, as investors race to get ahead of whatā€™s shaping up to be a government-fueled AI gold rush.

While China is firing on all cylinders, U.S. tech firms are struggling to keep pace. Meta and Amazon are pushing AI agent development, but Marvell Technologyā€™s dismal earnings report highlighted growing concerns about Americaā€™s ability to maintain its AI edge. Factor in tariffs that are pressuring U.S. tech firms, and the balance of power in AI suddenly looks a lot more competitive than Silicon Valley would like to admit.

Chinaā€™s Not Just Catching Upā€”Itā€™s Taking the Lead: For years, Chinese tech companies were seen as playing second fiddle to their U.S. counterparts. But with Alibabaā€™s AI breakthrough, government backing, and an aggressive investment spree, that narrative is shifting fast. It was thought that export control on chips sent to China would allow the US to maintain a 3-6 month lead in AI but this just shows itā€™s anyoneā€™s game.

NEWS
Market Movements

AI
Echelon Earnings From Broadcom, Hewlett Packard, Costco & Kroger

Broadcom skyrocketed 12.82% after proving that AI is still the golden ticket. Revenue from its AI business surged 77% year-over-year, and the company upped its outlook thanks to strong demand for custom AI chips. CEO Hock Tan made it clear Broadcom doesnā€™t waste time on small-time customersā€”only hyperscalers need apply. ($AVGO)

Hewlett Packard Enterprise took a 20.21% nosedive after weak guidance and a cost-cutting plan that includes axing 2,500 employees. The company blamed aggressive discounting in the traditional server market and a stockpile of AI inventory that didnā€™t move fast enough. Investors werenā€™t buying the ā€œweā€™ll do better next timeā€ pitch, sending shares to their worst day in years. ($HPE)

Costco slipped 1.23% after falling short on earnings, with higher supply chain costs and inflation taking a bite out of profits. Shoppers are still spending, but theyā€™re getting pickierā€”splurging on fancy steak while hunting for deals elsewhere. With tariffs on the horizon, Costco is bracing for potential price hikes, though management says itā€™s doing everything possible to keep bulk-buyers happy. ($COST)

Kroger jumped 2% after delivering a strong sales forecast, but all eyes were on the sudden departure of CEO Rodney McMullen. The board gave few details beyond saying it wasnā€™t ā€œbusiness-related,ā€ leaving investors to speculate. Meanwhile, Kroger is keeping a close eye on tariffs and rising food prices, but insists it's not expecting major sticker shock for shoppersā€”yet. ($KR)

Calendar
On The Horizon

Tomorrow

No blockbuster earnings on deck tomorrow, but thereā€™s still plenty to watch across markets, policy, and tech.

Kicking things off, South by Southwest returns to Austin, bringing its usual mix of tech, media, and business heavyweights. The conference is known for spotlighting emerging trends, so expect a few headline-grabbing moments from startup founders, AI execs, and music industry disruptors.

Meanwhile, President Trumpā€™s crypto summit begins, with investors hoping for clarity on his administrationā€™s blockchain strategyā€”though concerns are mounting after reports surfaced of a $21.5 million crypto buy by his World Liberty Financial project.

Then thereā€™s the main event: the monthly jobs report. With the Fedā€™s next policy meeting around the corner, this data drop could shape expectations on rate moves and recession fears. Economists predict 170,000 jobs added in February, but after weak ADP numbers and fresh layoff announcements, traders are bracing for surprises.

NEWS
The Daily Rundown

  • šŸ” U.S. cuts off intelligence sharing with Ukraine: The Biden-era intelligence-sharing pact with Ukraine has been suspended, cutting off critical data on Russian troop movements. The move follows Trumpā€™s push for a peace deal that excluded Ukraine and a tense Oval Office meeting with President Zelensky. U.S. officials hinted the agreement could resume if Ukraine aligns with Washingtonā€™s diplomatic efforts.

  • šŸ“° Digg plans an AI-powered comeback under new leadership: Digg, once a dominant news aggregator, is relaunching under founder Kevin Rose and Reddit co-founder Alexis Ohanian. The new platform will use AI for content curation, restore user voting, and combat misinformation. Invitations for the revamped site will roll out soon as Digg aims to reclaim its place in social media.

  • šŸŽŸ Concert ticket prices surge as Gen Z takes on debt to see shows: The average price of a Top 100 tour ticket has jumped from $52 (adjusted for inflation) in 1996 to $136 in 2023, forcing some young fans into debt. Higher production costs, post-COVID demand, and dynamic pricing have driven up concert prices. Despite the expense, Gen Z and millennials continue to prioritize live events more than past generations.

  • šŸ™ Sanctuary city mayors defend policies amid federal crackdown: The mayors of Boston, Chicago, Denver, and New York testified before Congress, pushing back against pressure to increase cooperation with immigration enforcement. They argued that limiting federal cooperation improves public safety by encouraging undocumented immigrants to report crimes. Republican lawmakers criticized the policies, while the mayors cited studies showing immigrants commit fewer crimes than native-born citizens.

  • šŸš— Trump grants auto industry a one-month tariff delay: One day after imposing 25% tariffs on Canada and Mexico, Trump announced a temporary exemption for automakers. Ford, General Motors, and Stellantis had warned that rising costs would cripple supply chains and push car prices up. While the pause gives them time to shift production, Canadaā€™s Prime Minister Trudeau refuses to lift retaliatory tariffs without full U.S. removal.

  • šŸ›  Trump administration plans deep job cuts at VA and IRS: The administration is eliminating 80,000 jobs at the Department of Veterans Affairs and slashing the IRS workforce by half as part of budget cuts. The New York Times reported the IRS layoffs remain unscheduled, though tax season is in full swing. Meanwhile, the CDC has invited back 180 recently laid-off employees due to ongoing public health concerns.

  • šŸ¢ Government quietly reverses course on federal building sales: The General Services Administration (GSA) listed 443 properties for sale, including the FBI headquarters, but later removed 100 from the list. The revised list still includes Social Security Administration and Medicare buildings, part of Elon Muskā€™s Department of Government Efficiency (DOGE) cost-cutting plans. While the GSA expects $430 million in savings, experts warn it could destabilize commercial real estate.

  • šŸ“‰ Private equity firms see first asset decline in two decades: Assets under management at private equity firms fell 2% in 2024 to $4.7 trillion, marking the first drop since Bain & Co. began tracking the industry in 2005. PE firms are stuck with a $3 trillion backlog of aging deals they canā€™t sell, causing investors to pull back. Bain found that while PE funds have doubled assets since 2019, their ability to offload investments has stalled.

  • šŸ‡ŗšŸ‡ø U.S. enters direct negotiations with Hamas for the first time: The U.S. has begun direct talks with Hamas as ceasefire efforts with Israel face setbacks. Washington has historically avoided engaging with Hamas, which it designates as a terrorist organization. Trump issued an ultimatum demanding the release of hostages, while Hamas accused the U.S. of emboldening Israel to abandon the ceasefire.

  • šŸ‡©šŸ‡Ŗ Germanyā€™s incoming chancellor unveils ā‚¬500B defense and infrastructure plan: Friedrich Merz, Germanyā€™s next chancellor, has proposed a massive investment package to modernize the countryā€™s military, energy, and transportation. The plan marks a shift from Germanyā€™s traditionally conservative fiscal policy and aims to stimulate domestic demand. If implemented, it could reshape European economic strategies and strengthen regional security.

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