Luke Kawa2/28/25

Stocks end rough week with big gains

The S&P 500 and Nasdaq 100 closed up 1.6%, near their highs of the day, as did the Russell 2000 with a smaller 1.1% advance. For the week, however, all ended lower.

Every S&P 500 sector ETF finished higher, with financials leading the way. All but materials and real estate rose more than 1%. The number of S&P 500 constituents that advanced outnumbered decliners by 379, the highest such reading this year.

Stocks briefly retreated after a spat in the Oval Office between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy, but shrugged that off to have their first positive Friday of Trump 2.0.

Broadly speaking, the momentum names that had been getting crushed this week bounced on Friday.

The Magnificent 7 ripped higher, led by Nvidia and Tesla. The former didn’t manage to reclaim its 200-day moving average, however, though the latter bounced back above that level and ended its worst streak of big losses since March 2020. Carvana, Strategy, and Vertiv Holdings are other names that make the list of stocks that have been dumped finally seeing some relief from the intense selling pressure.

Monster Beverage booked a big gain after showing continued strength in the highly competitive energy drinks space.

Dell dropped after its fourth-quarter sales missed expectations, news that seemingly also weighed on AI server company Super Micro Computer.

FuboTV plunged double digits after reporting lower-than-expected sales and revenue guidance below what the Street had penciled in.

SoundHound AI, on the other hand, ramped nearly 20% after posting better-than-expected sales and a smaller-than-anticipated loss while also raising its 2025 outlook.

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Claire Yubin Oh21m

ServiceNow rises after Bank of America analysts reinstate as a Buy with a $130 price target

ServiceNow is up 4% in early trading on Tuesday, after Bank of America analysts reinstated coverage of the stock with a buy rating and a $130 price objective.

Now seeing the company as an “AI beneficiary given its entrenched workflow position,” Bank of America analysts, led by Tal Liani, wrote that “AI increases the need for governance, positioning ServiceNow at the center of workflow orchestration and control.” Replacing NOW with new AI tools, which has been the primary concern for many investors who have dumped the stock this year (the company's earnings being the latest example), will be “costly and complex,” considering the company’s “deeply embedded mission-critical position” within existing enterprise workflows, according to BofA's analysts.

The threat of AI agents, which can autonomously do tasks once set up, might actually lead to more demand for ServiceNow's products, with Liani writing that agentic AI deployments "would elevate the need for orchestration, permissions, approvals, policy enforcement and auditability, aligning directly with ServiceNow's core capabilities and making it the orchestration layer in an AI-driven cycle".

The team also highlighted how ServiceNow’s recent initiatives would benefit from AI, rather than being threatened:

“[W]e see the company capturing incremental value as AI adoption scales: AI Control Tower defines the strategic role; Action Fabric provides the connective layer into workflows; hybrid pricing creates the monetization model; and the Armis/Veza acquisitions strengthen the security and identity context.”

That’s a much-needed vote of confidence for NOW, which has seen its shares drop more than 40% in 2026 until the past week’s uptick. Other software peers like Workday, Atlassian, HubSpot, and Intuit are also in the green before the bell on Tuesday.

Tasha Matsumoto

Tech drags down stocks as semiconductors slip

Stocks fell as memory and semiconductor shares declined, along with five of the Magnificent 7 names.

Bears awaken from hibernation at the zoo in Thale

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Memory stocks tumble after Seagate warns on difficulty of meeting demand, bond yields edge higher

Memory stocks are cratering on Monday after media reports indicating that Seagate Technology Holdings CEO Dave Mosley warned that it would “just take too long” to boost capacity to meet AI-fueled demand.

Micron, Sandisk, and Western Digital are down in addition to Seagate.

Another place to look to help explain the group’s sudden travails (lumping together flash, storage, and high-bandwidth): memory stocks have displayed an elevated level of momentum, and momentum stocks have generally come under acute pressure during sudden bond market sell-offs.

Mosley’s answer, delivered at a JPMorgan conference, is worth reading in full, as the summarized media reports miss some of the nuance (emphasis added):

“What our customers are driving us for right now is more exabytes. And we believe that the way to get the most exabytes is to take our talented teams and really go through these technology transitions. We're targeting mid-20s percent growth, which is enormous CAGR. And the only way we're going to get there is to be able to go through those technology transitions, if you will, to take a 3 terabyte per platter product to a 4 terabyte per platter to a 5 terabyte per platter year over year over year. And so that's really the way we're driving it. If we took the teams off and started building new factories or bringing up new machines, it would just take too long. You would end up more capacity, if you will, but then you'd slow the rate of growth on that technology. So back to your question directly, the wildcard really is in unit capacity for disk drives, which we again could be fairly flexible with once we package those heads and media. That gets down to more customer diversification and edge and edge AI and all those use cases, which I think could come someday. So we would take the heads and media that we have planned and divert them somewhere else should those applications take hold.

To grossly oversimplify Mosley’s answer, he’s saying that in a resource-constrained environment, technology improvements are the better way to meet demand than building out more capacity.

Reasonable folks can quibble about how negative these remarks really are for the industry.

On one hand, not getting over their skis on capex is something that, all else equal, would protect profitability over time and avoid the boom-bust cycles that have plagued the industry.

On the other hand, that gives more time for competitors (especially those from China) to try to step in and meet the market’s appetite for memory. To that end, Changxin Memory Technologies is posting massive growth as it readies for an IPO.

markets

Lumentum, Coherent fall after hedge fund manager Aschenbrenner dumps his holdings

Shares of Lumentum and Coherent plunged Monday after Leopold Aschenbrenner, ex-OpenAI researcher turned investor, disclosed his Situational Awareness fund exited its holdings in those companies during the first quarter.

By the afternoon, Lumentum was down 11% and Coherent was down over 6%. The losses are relatively small compared to the over 120% and 80% gains the AI infrastructure companies had put up, respectively, since January.

The two companies are developers of phonetics and optical equipment, which help data centers and AI hyperscalers transmit data.

Aschenbrenner’s firm, Situational Awareness, is making major market ripples today, also sending shares of T1 Energy soaring on news he bought the stock.

He also made a bearish bet against Nvidia, which recently invested $4 billion ($2 billion each) into Lumentum and Coherent.

How surging bond yields threaten to derail the momentum trade in stocks

Sharp changes in yields mean the world might be changing. Momentum stocks like it when the world stays the same.

Highlands Train Wreck

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