Good Morning!
On Thursday, February 20, the S&P 500 closed at 6,117.52, down 0.27% from the previous trading session. The NASDAQ was down 0.33%, finishing at 19,962.36. The Dow Jones Industrial Average slid 0.85% closing at 44,176.65. Meanwhile, the Russell 2000 was down 0.81%, ending the session at 2,261.74.
Crypto Highlights
Bitcoin (BTC): Currently trading at $97,565, up 0.46% over the past 24 hours.
Ethereum (ETH): Up 1.730.52, trading at $2,740 per coin.
Solana (SOL): Up 1.44%, currently trading at $175.41.
Ripple (XRP): Down 1.81% in the last 24 hours, now trading at $2.64 per coin.
Headlines
U.S. and European Energy Firms Face Uranium Supply Crunch as China and Russia Secure Resources
U.S. and European energy companies are increasingly at risk of a uranium supply shortage as demand for nuclear power rises and key suppliers shift sales toward China and Russia. Kazakhstan, the world’s largest uranium producer, is exporting more of its supply to these countries while reducing sales to the West, raising concerns among industry experts. Analysts warn that global uranium inventories, built up after the 2011 Fukushima disaster, are depleting, and Western nations have not taken sufficient steps to secure new sources. The World Nuclear Association projects that uranium demand will double by 2040 as countries, including the U.S. and UK, aim to triple nuclear energy capacity by 2050 to support clean energy transitions and power-intensive AI data centers.
Kazatomprom, Kazakhstan’s state-owned uranium producer, has significantly reduced its sales to Western buyers, with only 28% of its uranium going to U.S., Canadian, French, and UK buyers in 2023, down from 60% in 2021. Meanwhile, Niger, a key supplier to European reactors, halted uranium exports in 2024 following a military coup, further straining global supply. French state-owned Orano, a major player in the nuclear sector, faces resource depletion in Kazakhstan and was stripped of mining rights in Niger. Analysts predict U.S. utilities will need to secure new uranium contracts this year, warning that a supply shock could tighten global uranium markets and create long-term challenges for Western energy security.
U.S. and Russian Participants Hold Unofficial Talks on Ukraine in Switzerland
Unofficial discussions between American and Russian participants regarding the Ukraine war have taken place in Switzerland in recent months, including as recently as last week, according to sources familiar with the matter. These "Track Two" talks, which involve individuals with diplomatic and security experience but not official government representatives, aim to improve communication rather than develop formal agreements. While it remains unclear whether any attendees were directly sent by their governments or if Ukrainian representatives were present, the discussions coincide with a shift in U.S. policy under President Donald Trump, who has engaged directly with Russian President Vladimir Putin in pursuit of a swift resolution to the war.
The meetings, at least one of which reportedly took place in Geneva during the Munich Security Conference, highlight ongoing behind-the-scenes efforts to explore potential diplomatic solutions. The White House, Ukrainian government, and Russian foreign ministry have not commented on the talks, while Switzerland's foreign ministry confirmed that such unofficial exchanges occur regularly. Recent diplomatic engagements have also included official U.S.-Russia meetings in Saudi Arabia, suggesting that Track Two discussions may become less relevant as formal diplomatic channels reopen. However, previous attempts at similar dialogue in 2023 failed to produce concrete results, leaving uncertainty about the effectiveness of these latest initiatives.
Walmart Stock Plunges After Earnings, Walton Family Loses Billions
Walmart shares tumbled more than 6.5% on Thursday, marking their worst day since November 2023, as the retail giant issued a weaker-than-expected forecast for 2025. Despite reporting strong fourth-quarter earnings of $180.6 billion in sales and $0.66 earnings per share—both exceeding analyst expectations—the company’s outlook for its fiscal year ending January 2026 disappointed investors. Walmart projected full-year sales growth of 3% to 4%, slightly below Wall Street's 4.1% estimate, and forecasted earnings per share between $2.50 and $2.60, falling short of the expected $2.77. The market reaction erased approximately $51 billion in Walmart’s market capitalization.
The stock slide significantly impacted the Walton family, with the heirs of Walmart’s founders losing billions. Sam Walton’s three surviving children—Alice, Jim, and Rob Walton—each saw their net worth decline by over $6 billion, while other family members collectively lost around $4.5 billion. Walmart also expressed concerns about the potential impact of tariffs under former President Donald Trump’s administration, acknowledging that higher costs could eventually be passed on to consumers. CFO John David Rainey noted that while Walmart remains committed to keeping prices low, the company is not immune to tariff pressures and expects foreign currency fluctuations to dent profits by about 2% this year.
Nvidia CEO Jensen Huang Dismisses DeepSeek Stock Sell-Off as Misinterpretation
Nvidia CEO Jensen Huang addressed the stock market's reaction to Chinese AI firm DeepSeek, asserting that investors misunderstood the significance of its advancements. In January, DeepSeek released its R1 model, built with weaker chips and significantly less funding than leading Western AI models, sparking concerns that high-end AI infrastructure spending might be unnecessary. The news triggered a sell-off that wiped $600 billion from Nvidia’s market value and temporarily slashed Huang’s net worth by nearly 20%. Speaking in a pre-recorded interview aired Thursday, Huang argued that investors had the wrong perspective, emphasizing that AI’s evolution depends not just on pre-training but also on post-training—where Nvidia’s computing power remains essential.
Huang highlighted that post-training, which enables AI to refine reasoning and problem-solving abilities, is the most critical phase of intelligence development. He rejected the notion that AI progress had stalled, pointing to DeepSeek’s innovations as a positive force for the industry. Nvidia has been defending against skepticism that AI model scaling is slowing, with concerns growing even before DeepSeek’s emergence. Huang previously stressed that while AI scaling has shifted from training to inference, it remains a computationally intensive process. His remarks could preview Nvidia’s upcoming earnings call on February 26, where DeepSeek’s impact on the AI market is expected to be a key topic of discussion.
Boeing CEO Praises Elon Musk for Air Force One Project Assistance
Boeing CEO Kelly Ortberg credited Elon Musk for providing significant assistance in addressing delays in the Air Force One replacement project. Speaking at a Barclays investor conference, Ortberg described Musk as a "brilliant guy" who has been instrumental in identifying technical requirements and removing unnecessary obstacles to expedite delivery. Musk is working with the Department of Government Efficiency (DOGE), a commission he leads, to help improve the project's timeline. Boeing was originally contracted in 2018 to deliver two new Air Force One aircraft for $3.9 billion by 2024, but the project has faced repeated delays, pushing the expected delivery to at least 2027 and costing Boeing over $2 billion in losses.
Former President Donald Trump has criticized Boeing’s handling of the project, calling the company "in default" for its slow progress. Ortberg, who took over from Dave Calhoun in July 2024, has sought to revamp Boeing’s strategy, including leveraging Musk’s expertise. Musk previously voiced concerns about Boeing’s leadership but has since expressed confidence in Ortberg’s direction. Despite these efforts, Boeing’s financial struggles persist, with the company posting a $3.86 billion net loss in Q4 2024 and nearly $12 billion in losses for the year. Boeing shares fell 2.83% on Thursday, extending a 12-month decline of more than 10%.
Alibaba Shares Surge 14% on AI Investment Pledge
Alibaba’s Hong Kong-listed shares soared 14.6% on Friday after the company announced plans to invest “aggressively” in artificial intelligence over the next three years. CEO Eddie Wu stated that Alibaba would spend more on AI and cloud infrastructure in the coming years than it had in the past decade, though he did not specify an exact investment amount. In 2024, the company’s capital expenditures rose to ¥72.5 billion ($10 billion), significantly higher than the previous year’s ¥24 billion, as Alibaba ramped up purchases of processors and other AI-related infrastructure. The company aims to develop artificial general intelligence (AGI) and plans to release a deep reasoning model to compete with AI leaders like DeepSeek and OpenAI.
Alibaba’s AI push comes alongside strong financial performance, with revenue rising 8% to ¥280 billion in the final quarter of 2024—its fastest growth in over a year. Sales in its cloud division grew 13%, contributing to a 50% year-to-date surge in Alibaba’s stock price. The company has also benefited from a broader AI-driven rally in Chinese tech stocks and its partnership with Apple to integrate AI features into iPhones in China. Additionally, Alibaba’s international ecommerce division grew 32%, driven by AliExpress, while domestic commerce saw a 5% increase. The return of co-founder Jack Ma, who recently participated in a high-profile meeting with President Xi Jinping, further boosted investor confidence.
IRS Fires 6,000 Employees as Trump Pushes Government Downsizing
The Internal Revenue Service (IRS) announced the layoff of approximately 6,000 employees on Thursday, marking a significant reduction of about 6% of its workforce during the peak of tax-filing season. The job cuts are part of President Donald Trump’s broader initiative to shrink the federal government, a campaign spearheaded by tech billionaire Elon Musk. The move follows Trump's efforts to roll back hiring expansions made under his predecessor, Joe Biden, who had increased IRS staffing to boost tax enforcement on wealthy individuals. A federal judge in Washington ruled that the firings could proceed despite legal challenges from labor unions.
Trump Administration Shortens Deportation Protections for 521,000 Haitians
The Trump administration announced on Thursday that it will cut the duration of deportation protections and work permits for 521,000 Haitians covered under the Temporary Protected Status (TPS) program, setting their expiration for August 2025. Homeland Security Secretary Kristi Noem’s decision reverses an earlier Biden administration extension that would have kept protections in place until February 2026. President Donald Trump has long been critical of TPS, attempting to curtail the program during his previous term, though his efforts were blocked by federal courts. Noem echoed Trump’s stance, emphasizing that TPS should remain temporary.
Trump Administration Launches Review of California High-Speed Rail Project
The Trump administration has initiated a federal review of California’s $128 billion high-speed rail project, reigniting debates over the long-delayed and over-budget initiative. Secretary of Transportation Sean Duffy announced on Thursday that the Federal Railroad Administration would conduct a compliance and performance review to assess whether taxpayer funding should continue supporting the venture. Originally estimated at $33 billion with service expected to begin in 2020, the project has since ballooned in cost and delays, with only 119 miles of the planned 776-mile route under construction. The current cost projection now ranges from $89 billion to $128 billion.
Japan’s Inflation Hits Two-Year High, Strengthening Case for Rate Hikes
Japan’s inflation rate surged to 4% in January, the highest level since January 2023, reinforcing calls for interest rate hikes by the Bank of Japan (BOJ). Core inflation, which excludes fresh food prices, rose to 3.2%, exceeding economists’ expectations, while the core-core inflation rate, which also excludes energy prices, reached 2.5%. Inflation has remained above the BOJ’s 2% target for 34 consecutive months, fueling speculation that the central bank may tighten its monetary policy. Following the inflation data release, the yen strengthened slightly against the U.S. dollar, reflecting market anticipation of a shift in Japan’s monetary stance.
The BOJ has been considering rate hikes to counter inflation risks and yen depreciation, with board members expressing concerns about excessive monetary easing. Governor Kazuo Ueda has indicated the central bank is prepared to increase government bond purchases if yields rise sharply. Meanwhile, Japanese government bond yields, which recently hit a 15-year high, showed a slight decline. The stronger-than-expected inflation figures come on the heels of robust GDP growth data, further bolstering arguments for an earlier rate hike.
Japan to Court Tesla on Nissan Investment
A high-profile Japanese group, including former Prime Minister Yoshihide Suga and ex-Tesla board member Hiro Mizuno, is seeking to persuade Tesla to invest in Nissan after the carmaker’s failed merger talks with Honda. The plan, supported by several Nissan board members, envisions Tesla as a strategic investor, potentially acquiring Nissan’s U.S. plants to strengthen domestic production amid concerns over tariffs under a potential Donald Trump administration. Nissan recently rejected a $58 billion merger proposal from Honda, raising fears that the struggling automaker could face takeover attempts from private equity firms or Taiwan’s Foxconn. Meanwhile, Nissan has been exploring partnerships with major tech companies like Tesla and Apple as part of its ongoing turnaround strategy, which includes job cuts and reduced production capacity.
The proposal highlights Japan’s concerns about foreign ownership of its key industries, particularly amid Foxconn’s interest in Nissan. Japan’s Ministry of Economy, Trade and Industry is monitoring the situation closely, reflecting national security concerns. Despite these efforts, Tesla CEO Elon Musk has downplayed the possibility of acquiring Nissan’s factories, emphasizing Tesla’s focus on autonomous driving and robotics. Nissan’s financial struggles continue, with Moody’s downgrading its credit rating to junk status.
Rivian Posts First Gross Profit Amid Slowing EV Demand
Rivian reported its first-ever gross profit in the fourth quarter, with revenue exceeding the cost of production, marking a significant milestone for the electric vehicle (EV) maker. The company posted $170 million in gross profit, surpassing Wall Street expectations, as it successfully reduced manufacturing costs by $31,000 per vehicle. Despite this achievement, Rivian expects to deliver fewer trucks and vans in 2025, forecasting between 46,000 and 51,000 units compared to the nearly 51,600 delivered in 2024. The company's stock saw a brief 7% rise in after-hours trading before settling near its previous closing price.
Slowing EV demand, shifting tax incentives, and potential tariffs under a new U.S. administration pose challenges for Rivian. The company must navigate the political landscape, including the influence of Tesla CEO Elon Musk in Washington and former President Donald Trump’s proposed tariffs on automotive materials. Chief Financial Officer Claire McDonough highlighted the impact of regulatory changes on Rivian’s financial outlook but expressed optimism about working with the new administration to utilize a $6.6 billion loan granted by the U.S. Department of Energy.
EU Approves €920 Million German Aid for Infineon’s Semiconductor Plant
The European Commission has approved €920 million in German state aid to support Infineon’s construction of a new semiconductor manufacturing plant in Dresden. The funding will help Infineon complete its MEGAFAB-DD project, which will produce a variety of advanced chips for industrial, automotive, and consumer applications. The plant, expected to reach full capacity by 2031, aligns with the European Chips Act’s goal of strengthening Europe's semiconductor supply chain and reducing reliance on foreign production.
The investment is part of the EU’s broader effort to boost semiconductor production, with €15 billion earmarked for public and private sector projects by 2030. Infineon’s Dresden facility represents the company’s largest single investment, with a total project cost of €3.5 billion. In exchange for the state aid, Infineon has committed to enhancing the EU semiconductor value chain, investing in next-generation chip research, and prioritizing supply during potential shortages.
Intel’s 18A Process Matches TSMC’s N2 in SRAM Density, Signaling Major Semiconductor Breakthrough
Intel’s upcoming 18A semiconductor process is reportedly on par with TSMC’s N2 technology in terms of SRAM density, marking a significant milestone for the company’s foundry ambitions. According to new details revealed at ISSCC, Intel’s 18A high-density configurations boast a macro bit density of 38.1 Mb/mm², closing the gap with TSMC’s advancements. This progress highlights Intel’s resurgence in the semiconductor race, particularly with innovations like Backside Power Delivery Network (BSPDN), which improves power efficiency and signal integrity by relocating power delivery to the back of the wafer.
TSMC’s N2 process, which features a transition from FinFET to nanosheet transistors, has also demonstrated notable improvements, including a 12% increase in SRAM density and an 18% boost in high-performance SRAM. While Intel’s technological progress is promising, the true test will be in production yields and supply chain integration. With backing from the Trump administration and aggressive talent acquisition from competitors, Intel is positioning itself for a major comeback in the semiconductor industry, setting the stage for intense competition with TSMC as both companies push the boundaries of chip manufacturing technology.
Leonardo Secures New Partner for Aerostructures Unit Amid Boeing Challenges
Italy’s Leonardo has identified a new industrial partner in the defense and space sector to co-invest in its struggling aerostructures unit, which has been impacted by Boeing’s production issues. CEO Roberto Cingolani announced the development during a post-results call on Thursday, emphasizing that negotiations are ongoing and a broader strategy for the division will be unveiled on March 11. Leonardo, which manufactures fuselage sections for Boeing’s 787 aircraft, has been working for years to restore profitability to the unit, which employs around 4,000 people across four plants in southern Italy.
Despite securing a repricing agreement with Boeing and increasing fuselage deliveries from 39 in 2023 to 49 in 2024, Leonardo’s shipment rates remain below sustainable levels. Stabilizer deliveries declined from 32 to 28 over the same period. Cingolani acknowledged that the current output is insufficient and that the challenges facing the aerostructures business are growing.
Meta Approves Executive Bonuses While Cutting Employee Stock Awards
Meta has approved a new bonus plan that could allow its executives to earn up to 200% of their base salaries, according to an SEC filing. The plan, designed to provide "variable cash incentives," significantly increases the previous bonus cap of 75%. However, the increase does not apply to CEO Mark Zuckerberg, whose compensation structure primarily relies on stock options. The company justified the change by stating that executive cash compensation was previously below the industry’s 15th percentile, and the adjustment now brings it to the 50th percentile.
At the same time, Meta has reduced the value of annual stock refreshers for employees by approximately 10%, meaning some staff will receive fewer restricted stock units (RSUs) over their four-year vesting period. The move coincides with Meta’s decision to cut around 4,000 jobs, representing 5% of its workforce, as part of its efforts to streamline operations and prioritize artificial intelligence investments.
De Beers Struggles as Diamond Demand Falls, Facing $2 Billion Inventory Pileup
Anglo American’s ownership of De Beers faces increasing scrutiny as the mining giant announced a $2.9 billion write-down in the diamond company’s valuation, following a $1.6 billion reduction in 2023. With De Beers’ book value now standing at $4 billion—less than half its 2023 valuation—the company is grappling with a $2 billion diamond inventory it has been unable to sell. The decline in demand is largely driven by the rise of lab-grown diamonds and weakening consumer interest in China, where diamond purchases have fallen 40% over the past two years. As retailers in China offload polished diamonds back into the midstream market, inventory levels have surged, further pressuring De Beers’ ability to sell rough diamonds.
In response to these challenges, Anglo American is restructuring De Beers to operate independently, potentially paving the way for a sale or IPO. However, CEO Duncan Wanblad cautioned that progress will be slow in the first half of 2025 due to persistent industry headwinds. The company has also scaled back production plans, reducing output by 10 million carats this year after a 6 million carat cut in 2024. While De Beers has exited the lab-grown diamond market to differentiate itself from cheaper synthetic alternatives, Anglo executives believe further price declines in lab-grown diamonds will eventually create a clearer divide between synthetic and natural diamonds.
Yesterday's Earnings
Walmart (WMT): Actual EPS: $0.66 (Beat by 3.13%), Expected EPS: $0.64, Actual Revenue: $180.55B (Beat by 0.39%), Expected Revenue: $179.85B, Market Cap: $768.71B
Booking (BKNG): Actual EPS: $41.55 (Beat by 15.00%), Expected EPS: $36.13, Actual Revenue: $5.47B (Beat by 5.40%), Expected Revenue: $5.19B, Market Cap: $172.43B
MercadoLibre (MELI): Actual EPS: $12.61 (Beat by 56.64%), Expected EPS: $8.05, Actual Revenue: $6.06B (Beat by 4.66%), Expected Revenue: $5.79B, Market Cap: $113.47B
Copart (CPRT): Actual EPS: $0.40 (Beat by 8.11%), Expected EPS: $0.37, Actual Revenue: $1.16B (Beat by 2.65%), Expected Revenue: $1.13B, Market Cap: $54.25B
Newmont Goldcorp (NEM): Actual EPS: $1.40 (Beat by 30.84%), Expected EPS: $1.07, Actual Revenue: $5.65B (Beat by 9.71%), Expected Revenue: $5.15B, Market Cap: $52.16B
Targa Resources (TRGP): Actual EPS: $1.89 (Beat by 1.07%), Expected EPS: $1.87, Actual Revenue: $4.41B (Miss by 0.23%), Expected Revenue: $4.42B, Market Cap: $44.04B
Quanta Services (PWR): Actual EPS: $2.94 (Beat by 12.21%), Expected EPS: $2.62, Actual Revenue: $6.55B (Miss by 0.91%), Expected Revenue: $6.61B, Market Cap: $41.86B
Live Nation Entertainment (LYV): Actual EPS: $0.58 (Beat by 153.21%), Expected EPS: -$1.09, Actual Revenue: $5.68B (Beat by 0.18%), Expected Revenue: $5.67B, Market Cap: $35.12B
VICI Properties (VICI): Actual EPS: $0.58 (Miss by 14.71%), Expected EPS: $0.68, Actual Revenue: $976.1M (Beat by 0.84%), Expected Revenue: $968M, Market Cap: $32.99B
CenterPoint Energy (CNP): Actual EPS: $0.40 (Met Expectations), Expected EPS: $0.40, Actual Revenue: $2.55B (Beat by 4.08%), Expected Revenue: $2.45B, Market Cap: $22.08B
Insulet (PODD): Actual EPS: $1.15 (Beat by 11.65%), Expected EPS: $1.03, Actual Revenue: $597.5M (Beat by 2.54%), Expected Revenue: $582.7M, Market Cap: $20.00B
Baxter (BAX): Actual EPS: $0.58 (Beat by 11.54%), Expected EPS: $0.52, Actual Revenue: $2.75B (Beat by 2.99%), Expected Revenue: $2.67B, Market Cap: $17.29B
Builders FirstSource (BLDR): Actual EPS: $2.31 (Beat by 6.45%), Expected EPS: $2.17, Actual Revenue: $3.82B (Miss by 1.55%), Expected Revenue: $3.88B, Market Cap: $16.21B
Alliant Energy (LNT): Actual EPS: $0.70 (Beat by 2.94%), Expected EPS: $0.68, Actual Revenue: $976M (Miss by 12.07%), Expected Revenue: $1.11B, Market Cap: $15.96B
Pool (POOL): Actual EPS: $0.98 (Beat by 6.52%), Expected EPS: $0.92, Actual Revenue: $987.5M (Beat by 2.86%), Expected Revenue: $960M, Market Cap: $13.01B
Akamai (AKAM): Actual EPS: $1.66 (Beat by 9.21%), Expected EPS: $1.52, Actual Revenue: $1.02B (Beat by 0.99%), Expected Revenue: $1.01B, Market Cap: $12.47B
EPAM Systems (EPAM): Actual EPS: $2.84 (Beat by 3.27%), Expected EPS: $2.75, Actual Revenue: $1.25B (Beat by 3.31%), Expected Revenue: $1.21B, Market Cap: $12.32B
LKQ (LKQ): Actual EPS: $0.80 (Beat by 6.67%), Expected EPS: $0.75, Actual Revenue: $3.36B (Miss by 2.04%), Expected Revenue: $3.43B, Market Cap: $10.80B
Hasbro (HAS): Actual EPS: $0.46 (Beat by 27.78%), Expected EPS: $0.36, Actual Revenue: $1.1B (Beat by 7.84%), Expected Revenue: $1.02B, Market Cap: $9.46B
Earnings Today
No companies are set to report earnings today.
