markets

1/17/25

Morgan Stanley analysts say TikTok a “strategic fit” with Amazon

It’s official, the TikTok divest-or-dark law is legal, and analysts at Morgan Stanley think they know the perfect buyer: Amazon.

Analyst Brian Nowak wrote:

“We believe the combination of AMZN’s strong ad tech stack, advertiser/third party seller base, first party data and logistics assets put together with TikTok’s estimated ~32bn hours of US consumer engagement could build a viable social shopping network.”

Nowak noted that he has no knowledge of any deal discussions, and that neither ByteDance nor Amazon have commented on the chance for a tie-up.

But with US regulators unlikely to approve Meta or Alphabet building any more dominance in the online-ad space, the list of potential acquirers is slim:

“The number of companies (or individuals) who could fund a potential $80bn + acquisition (and its risks) is limited. AMZN with its $33bn of net cash on books and ~$69bn/82bn of FCF in ’25/’26 could (in theory) handle a purchase like this.”

Update April 4, 2025: Corrected article to reflect that Brian Nowak is an analyst at Morgan Stanley, not JP Morgan, as the article originally stated.

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Claire Yubin Oh

52m

IONQ rises after signing agreement with Department of Energy to advance the development and deployment of quantum tech in space

IonQ shares are 6% higher in pre-market trading on Thursday after the quantum computing company signed a memorandum of understanding with the US Department of Energy “to advance the development and deployment of quantum technologies in space.”

Per the “understanding”, IonQ will design and execute an orbital demonstration of quantum-secure communications using its satellite platform, as well as explore other quantum applications in space.

“This Collaboration is about turning possibility into practice and learning by doing,” said Rima Kasia Oueid, DOE Senior Commercialization Executive and lead architect of the Quantum-in-Space Collaboration. “By bringing in new partners, we are accelerating commercialization, demonstrating applications like secure quantum communications, advanced quantum PNT, and quantum sensing, and expanding America’s role in the space economy."

Alongside IonQ, the DoE announced new partnerships with Honeywell and the Electric Power Board of Chattanooga as part of its Quantum-In-Space initiative, an effort to push US leadership in space-based quantum technologies. Other stocks in the sector, such as Rigettiand D-Wave Quantum are also rising more modestly this morning, with the latter building on yesterday’s 18% gain, which came as part of a wave of bullish options bets.

Separately, yesterday, IonQ announced plans to acquire quantum sensor company Vector Atomic in an all-stock deal worth approximately $400 million, which Needham analysts said could help support IonQ secure government contracts and projects in the future.

markets

1h

Novo jumps after Wegovy pill shows significant weight loss in trial, Ozempic found to reduce risk of heart attacks and strokes

Danish GLP-1 trailblazer Novo Nordisk was trading as much as 7% higher early on Thursday after releasing two positive study results.

Arguably the most commercially significant of the two, Novo yesterday revealed that its oral semaglutide treatment (“Wegovy in a pill”) delivered “16.6% weight loss in people with obesity” in a new study, published in The New England Journal of Medicine. Results also showed that one in three participants reported losing 20% or more of their body weight.

According to the company’s press release, the Wegovy pill is the first oral GLP-1 treatment submitted to the US Food and Drug Administration (FDA) for chronic weight management, and the drugmaker has now started production in the US.

A total of 307 adults took part in the 64-week study, which found that:

...if all participants adhered to treatment, average weight loss of 16.6% was achieved by people taking oral semaglutide 25 mg compared to 2.7% for placebo at 64 weeks, with over a third (34.4%) experiencing a weight loss of 20% or more, versus 2.9% for placebo.

Crucially, Novo stated that these results were comparable with previous trial results of injectable Wegovy.

In an interview with CNBC, the company’s Chief Science Officer, Martin Holst Lange, said: “Our job was to show that, with the tablet, we could get the same efficacy and the same safety and tolerability as we can with the injectable. That we have now done.”

Separately, Novo Nordisk reported this morning that the once-weekly injectable version of Ozempic was “associated with a 23% reduced risk of heart attack, stroke and death in people with type 2 diabetes and cardiovascular disease on Medicare versus dulaglutide.”

Novo’s shares have been under intense pressure over the last year, as competition from rival pharma giants like Eli Lilly and compounders such as Hims & Hers has weighed on the company’s market position.

Nia Warfield, Luke Kawa

US stocks dip as rate cut fails to ignite broad enthusiasm

The S&P 500 fell 0.1%, the Nasdaq 100 gave back 0.2%, and the Russell 2000 outperformed with a 0.2% advance, though it was up more than 2% at its highs of the day.

Brown bear (Ursus arctos) looks out of its den in the woods under a large rock in winter

markets

15h

Walmart hits all-time high following Bank of America boosting its price target

Walmart shares touched an intraday all-time record of $106.11 before settling lower for the close, missing its previous record closing price of $105.05 on February 13 of this year.

The rally came after Bank of America lifted its price target on Walmart to $125 from $120 and stuck with its “buy” rating. Analysts said Walmart is emerging as a leader in “agentic AI commerce,” pointing to its GenAI assistant, Sparky, which offers occasion-based recommendations and help shoppers plan, compare, and buy products.

Analysts also flagged Walmart’s sheer scale, backed by data from 180 million customers, and its fast-growing delivery business as major competitive advantages. Beyond AI, the fundamentals are catching eyes, too. Walmart’s food delivery arm is already profitable, reaching 95% of US households within three hours and a quarter of customers in under 30 minutes.

The note also highlighted Walmart’s cushion against tariffs, since two-thirds of its products are sourced domestically, and pointed to its new Synchrony Financial-backed credit card as another way to juice membership growth.

The stock is up over 16% year to date and has more than doubled since 2020.

markets

17h

Federal Reserve cuts rates by 0.25%, signals 50 basis points of additional easing by year-end

The Federal Reserve cut interest rates for the first time this year, lowering its policy rate to a range of 4.25% to 4.5%, as anticipated.

The “dot plot” from the Summary of Economic Projections shows the median Fed official thinks it will be appropriate for the policy rate to end this year at 3.625% (expected 3.875%) and 3.375% in 2026 (expected 3.375%) if the economy evolves in line with their expectations.

Stocks slid during Fed Chair Jay Powell’s press conference, where he described the reduction as a “risk-management cut,” didn’t rule out that the US economy might still warrant restrictive monetary policy, and signaled there was not wide support for a larger 50-basis point cut at this meeting.

The iShares Russell 2000 ETF, which was up nearly 2.5% at the highs, fell into negative territory before rebounding. The SPDR S&P 500 ETF traded down as much as 0.9% before paring those losses to end up right around where it was when the rate cut was announced.

The US central bank raised its forecast for how high core PCE inflation will be next year to 2.6% from 2.4% in June, which heavily implies that monetary policymakers are willing to look through the near-term inflationary impulse from tariffs and that softening job growth has assumed more prominence in their decision-making process.

There was only one dissent: newly added Fed Governor Stephen Miran, who favored a 50-basis point cut at this meeting and appears to be the outlier Fed official who thinks the policy rate should end the year at 2.875%.

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