TNC Daily Open: Deepseek Who? Big Tech Is Already Raking In Billions

This report is from today’s TNC’s Daily Open, our international markets update. TNC Daily Open keeps investors informed on everything they need to know, no matter where they are.

What To Note Today

Markets Soar Amid Volatile Trading

Major U.S. indexes increased on Thursday in a tumultuous session that saw stocks plummet in the last hour of trade before regaining significant losses. The majority of Asia-Pacific markets rose on Friday. Ahead of the nation’s Union Budget on Saturday, where the government must balance fiscal restraint and economic stimulus, India’s Nifty 50 index increased by almost 0.8%.

Underwhelmingly Slow U.S. Economic Growth

The fourth quarter of 2024 saw a 2.3% annualized and inflation-adjusted growth in the U.S. gross domestic product, according to a report released Thursday by the U.S. Commerce Department. The number declined from the 3.1% growth observed in the third quarter and below the 2.5% predicted by economists polled by Dow Jones. Nevertheless, the United States’ economy grew by a solid 2.8% in 2024.

Apple’s Services Sales Compensate for iPhone Decline

After the business announced a 14% year-over-year increase in services revenue during its first fiscal quarter, which helped raise gross margins to 46.9%, the best on record, Apple shares increased by almost 3% in extended trading. Concerns about dwindling iPhone sales, which dropped 11% annually in the Greater China market, were allayed by that spike. However, Tim Cook, the CEO, stated that China has “a national subsidy program” that may increase sales.

Samsung Electronics Operational Profits Decline

Samsung Electronics exceeded LSEG projections with fourth-quarter revenue that increased 12% from the previous year. According to Samsung, 2024’s yearly income was the second-highest on record. In the face of weak market circumstances and rising corporate expenses, the South Korean company’s operating profit increased by almost 130% yearly. Still, it fell by almost 30% every quarter.

OpenAI’s Worth Would Double With A New Financing Round

According to CNBC, OpenAI is negotiating to raise $40 billion in a funding round, double the artificial intelligence company’s previous private investor estimate of $157 billion, and bring its valuation to as high as $340 billion. According to two people familiar with the negotiations who asked not to be named because the talks are still ongoing, Masayoshi Son’s SoftBank would lead the round with a contribution of up to $25 billion. At such sums, SoftBank would overtake Microsoft as OpenAI’s largest investor.

The Year Is As Good As January

According to Yale Hirsch, who created the Stock Trader’s Almanack, the January Barometer asserts that “as goes the S&P 500 in January, so goes for the year.” The S&P is up 3.2% for the month with just one trading day remaining, positioning it to indicate gains for the remainder of 2025. However, why would January’s performance dictate the course of the market for the next eleven months?

Bottom Line

Stocks appear to have stabilized following Tuesday’s market-shaking ruction caused by DeepSeek. Industry experts’ evaluations of DeepSeek’s claims, as well as their skepticism, helped allay some of the initial anxiety.

While a robust, if somewhat disappointing, U.S. gross domestic product report fuelled expectations that earnings growth will continue in 2025, a week full of Big Tech earnings also reminded investors that it might be wiser to concentrate on companies currently generating billions of dollars in revenue.

The S&P 500 is expected to end the month in the green unless a new artificial intelligence model that costs maybe $5 is released to the world on Friday, the last trading day of January. Although DeepSeek has reignited some long-standing concerns regarding high-tech valuations, the S&P is off to a strong start this year.

 

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