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Rani Molla5/21/25

Google soars after analysts charmed by developer conference

Wall Street analysts were generally impressed with Google’s two-hour developer conference yesterday, in which execs crammed its Gemini AI into basically everything.

Today the stock is up more than 5%. Here are some comments from a few of their notes:

JPMorgan: “We come away from Google I/O incrementally positive as we believe Google is leading in many areas of AI with Gemini at the top of foundational model leaderboards, AI Mode bringing Gemini into Search and incorporating agentic capabilities from Astra, Mariner, & Deep Research, and Gemini becoming widely available across numerous platforms (iOS & Android) & device types (smartphones, wearables, & auto). Importantly, Google’s product innovation is accelerating — the company is shipping faster than ever — and AI Mode in Search is rolling out to US users just 1 year after AI Overviews were introduced. We believe Google’s ‘total reimagining of search’ is taking shape as AI Mode integrates what have been somewhat disparate AI products.”

Morgan Stanley: “I/O showed how GOOGL intends to make search more AI-enabled, personalized, and agentic in ’25. Next gen (subscription, diffusion and devices) tools are improving too but for now we are most optimistic on the free pipeline of products to come.”

Bank of America: “We think the catch-up phase for Google’s LLM capabilities is coming to an end... We see this as Google’s ‘Reels moment,’ taking on a growing and well-funded competitor in OpenAI by integrating a directly competitive product [AI Mode].”

Evercore ISI: “We don’t believe there will be only one AI winner, but we think Google has successfully proven that it will remain a leader in the AI race.”

Baird: “It’s a tough and competitive landscape, but Google’s global scale, infrastructure, and suite of apps are meaningful competitive advantages.”

Rosenblatt Securities: “While impressive, the event was also a reminder that Google is stretching to parry huge strides by rivals that were nowhere just a couple of years ago.”

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Max Knoblauch12h

American Eagle posts stronger-than-expected Q4 earnings and revenue

If American Eagle has seen farther, it is by standing on the shoulders of Sydney Sweeney.

The jeans seller posted adjusted earnings of $0.84 per share, ahead of the $0.71 expected by analysts polled by FactSet. It booked $1.76 billion in fourth-quarter revenue, versus the $1.74 billion consensus.

Shares initially climbed more than 5% after-hours before paring gains to about 2%.

“Compelling new product collections, supported by fresh marketing campaigns, led to higher demand trends in the quarter,” said CEO Jay Schottenstein.

American Eagle said it’s expecting same-store sales to grow by high single digits in the first quarter.

Marketing controversy has proved to be a powerful mover of denim for AE. In its third-quarter earnings call in December, AE said its partnership with Sydney Sweeney — together with a Travis Kelce partnership — had garnered more than 44 billion impressions. The retailer hit meme stock status last July when it initially launched its “Sydney Sweeney has great jeans” campaign.

As of Wednesday’s close, American Eagle shares had climbed 120% since the Sweeney ad first landed.

Broadcom posts modest Q1 sales and earnings beats

The custom chip specialist just reported Q1 results.

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Rigetti Computing posts Q4 sales that fall short of expectations

The quantum computing firm just posted Q4 results.

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Tasha Matsumoto

Stocks rebound as investors’ risk appetite resumes

Investors shifted their focus from the war in Iran, resuming a risk-on mood amid surprise economic data.

Josh Giddey #3 of the Chicago Bulls grabs a rebound during the second half against the Detroit Pistons on October 22, 2025 at the United Center in Chicago, Illinois.

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Investors are itching to buy the dip in memory stocks

The intense drubbing in South Korean stocks, with the benchmark Korean index (KOSPI) falling nearly 20% in its first two trading days of the week following a Monday holiday, represented a serious threat to the hottest AI trade: memory stocks.

South Korea’s market is dominated by two high-bandwidth memory giants: SK Hynix and Samsung.

After Tuesday’s tumble, US investors seemingly said enough is enough: it’s a buy-the-dip opportunity.

US memory stocks like Micron, Sandisk, Western Digital, and Seagate Technology Holdings are posting massive gains on the day. The advance comes amid positive commentary at a Morgan Stanley conference on demand for memory chips.

Even more interestingly, the iShares MSCI South Korea ETF is up big today despite the KOSPI falling 12% overnight, its largest drop on record. The ETF’s outperformance of the South Korean equity gauge is the largest since 2008, as the global financial crisis raged.

The daily performance of these two can differ materially since they trade at different times and don’t track precisely the same things. US investors are making the bet that a potential break in this momentum trade and the potential for an unwind of retail leverage in South Korean markets be damned, big drops in memory stocks are meant to be bought.

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