Luke Kawa3/26/25

US stocks swoon as AI trade takes a beating

A double whammy of negative AI headlines and tougher tariff talk sank stocks on Wednesday.

The S&P 500 fell 1.1%, the Russell 2000 gave back 1%, and the tech-heavy Nasdaq 100 slumped 1.8%.

Tech was the worst S&P 500 sector ETF, down 2.2%, while consumer discretionary fell more than 1%. Staples was the biggest gainer.

TD Cowen analysts, whose report on Microsoft’s dimming demand for data center projects last month weighed on AI infrastructure and energy names, said that the company had walked away from 2 gigawatts’ worth of data centers. The bottom of the S&P 500 leaderboard was a who’s who of AI-adjacent names: Super Micro Computer, Arista Networks, Vistra, Nvidia, Quanta Services, GE Vernova, and Monolithic Power Systems were all among the 10 worst-performing constituents on the day.

Meanwhile, President Trump pledged that auto tariffs are coming. Ford was relatively unbothered, while General Motors tanked.

On the other hand, some all-around good news for gaming:

GameStop was up double digits after posting its largest operating profit since Q4 2017 and announcing a tweak to its investment policy to allow the purchase of bitcoin.

Nintendo also rallied as Goldman Sachs resumed coverage of the company with a “buy” rating, expecting strong sales from its Switch 2 console.

Dollar Tree’s commitment to low prices is admirable: the company announced that it’s selling Family Dollar (which it bought a decade ago for $9 billion) for $1 billion.

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December rate cut odds creep lower with Federal Reserve hawks out in full force

A cacophony of hawkish commentary.

Federal Reserve To Make Highly Anticipated Interest Rate Announcement This Week

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J. Edward Moreno2h

Gene-editing stocks rally on Bloomberg report that FDA plans to fast-track approval process

Shares of biotechs working with gene-editing treatments rose after the industry’s top regulator told Bloomberg News that the Food and Drug Administration plans to publish a paper in early November outlining the agency’s new, faster approach to approving those treatments.

FDA Clears Way for Faster Personalized Gene Editing Treatments

FDA Clears Way for Faster Personalized Gene Editing Treatments

Amazon pulled off its monster quarter despite being left out of OpenAI’s tangle of deals

Amazon’s AWS revenue grew 20% year on year, and will hit $125 billion in capex for the year. CEO Andy Jassy said the 14,000 jobs cut weren’t about money, but about “culture.”

AWS re:Invent 2024

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Matt Phillips3h

Getty Images shares moon on licensing deal with Perplexity

Getty Images soared Friday after announcing a multiyear licensing deal with AI search company Perplexity AI. Reuters reports:

“Under the agreement, Perplexity will integrate Getty’s API technology into its AI platform workflows, enabling users to access premium visuals while improving image attribution. The collaboration is part of a wider trend of digital platforms signing licensing deals with AI content providers to expand content access while respecting intellectual property rights and generating revenue.”

Getty was up as much as 85% in the premarket trading session, but those gains are quickly dropping as holders rush to dump the stock, which has been a truly disastrous long-term trade.

In fact, Getty has had a pretty bizarre ride since it returned to the public markets on July 25, 2022, as part of a SPAC deal — in a previous life it had been publicly traded before being taken private in 2008. Within days of its return, Getty became a minor meme stock, spiking more than 250% before crashing a couple months later.

Since then, the stock’s trajectory has been abysmal. Prior to the announcement of the Perplexity AI deal on Friday, it was down 80% from its trading debut. No wonder people are trying to get out fast.

At last glance, those 85% gains in the premarket have been swamped by sellers, shrinking today’s gain for Getty down to 17%.

markets

J. Edward Moreno3h

AbbVie earnings beat estimates but sag on decline in oncology and aesthetics biz

AbbVie slipped after it reported earnings results that beat Wall Street estimates, but also showed a slowdown in its oncology and aesthetics business.

The company reported adjusted quarterly earnings per share of $1.86, compared to the $1.77 analysts polled by FactSet were expecting, and raised its full-year profit guidance. It also reported revenue at $15.7 billion, higher than the $15.5 billion the Street was penciling in.

But the pharmaceutical giant’s oncology and aesthetics business (sales of Botox and Juvederm) slowed down and missed the Street’s estimates. The latter is sometimes seen as a pulse for consumer sentiment.

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