Amazon Earnings Disappoint, Stock Slides
Yahoo Finance's Dan Howley reports: Amazon (AMZN) released its fourth-quarter results after the bell on Thursday, exceeding estimates on both top and bottom lines but issuing disappointing Q1 guidance. Amazon's shares declined following the news.
Amazon's earnings follow cloud rivals Microsoft (MSFT) and Google (GOOG, GOOGL), which missed cloud sales expectations in the quarter. Microsoft posted $40 billion in revenue, while Wall Street anticipated $41.1 billion. Google reported sales of $11.9 billion; analysts had projected $12.1 billion. Both companies attributed their cloud disappointments to insufficient capacity to meet AI service demand.
Nvidia Soars Amid Stock Rally
Nvidia (NVDA) shares rose significantly on Thursday as the stock market closed higher. The rally extended gains from recent sessions, with Nvidia's stock now up over 10% in the past three days.
AI Mentions Surge on Earnings Calls
Goldman Sachs' chief US equity strategist, David Kostin, observed a record-high 50% share of S&P 500 (^GSPC) companies mentioning AI during this quarter's earnings calls. Kostin also noted that in the first quarter, companies benefiting from the AI narrative have shifted from AI infrastructure providers like chipmakers to those leveraging AI software to boost revenue. Goldman highlighted Accenture (ACN), Adobe (ADBE), and Meta (META) as examples of companies capitalizing on their AI investments.
Ford Falls after Weak Guidance
Yahoo Finance's Pras Subramanian reports: Ford (F) announced fourth-quarter earnings and revenue above estimates, with full-year profit exceeding expectations slightly. However, the automaker issued cautious full-year guidance.
Ford forecasts adjusted EBIT of $7 billion to $8.5 billion and adjusted free cash flow of $3.5 billion to $4.5 billion for 2025. The company anticipates "headwinds related to market factors," including pricing, but excludes policy changes like potential EV tax credit reductions or tariffs.
CFO Sherry House stated that a 25% tariff on imports "would have a major impact" on the industry. In comparison, Ford reported 2024 adjusted EBIT of $10.2 billion with revenue of $185 billion and net income of $5.9 billion. Ford previously projected 2024 adjusted EBIT "to be about $10 billion." Ford's stock declined more than 7% at market open, reaching its lowest level since January 2021.
Skyworks Plummets as Apple Shifts to Rival
Apple (AAPL) supplier Skyworks Solutions (SWKS) experienced a stock plunge of over 23% on Thursday. The semiconductor firm revealed that it was losing business with Apple to a competitor, believed to be Broadcom (AVGO), according to analysts.
Skyworks produces chips used in Apple devices for wireless communication. The company stated that Apple accounted for 72% of its $1 billion revenue in the December quarter. Furthermore, 85% of that Apple revenue stemmed from sales of Skyworks components for the iPhone.
Tariff Threat on Lumber Poses Risks for Builders
President Donald Trump's planned tariff on Canadian imports could result in increased lumber prices, impacting homebuilders' margins. Lumber futures (LBR=F) currently stand at $583 per thousand board feet.
The National Association of Home Builders notes that a 25% tariff on softwood lumber products from Canada, in addition to the current 14.5% duty rate, would elevate the overall effective rate for the Canadian tariff to almost 40%.
Job Market Challenges Increase
Finding employment has become more difficult for Americans. Labor Department data from Thursday showed 1.89 million continuing weekly unemployment insurance claims, up from 1.86 million the previous week and close to their highest level in three years. This indicates that more Americans are staying unemployed for longer periods and continuing to claim unemployment benefits.
While the number of new claims remains near its lowest point in the past year, indicating a low layoff environment, economists argue that the high level of continuing claims suggests job seekers are facing greater challenges.
Dow Drops on Salesforce, Honeywell Shares
The Dow Jones Industrial Average (^DJI) lost over 150 points on Thursday, dragged down by Salesforce (CRM) and Honeywell (HON) shares. Honeywell, a conglomerate, announced plans to separate into three distinct companies, a move anticipated by Wall Street after pressure from activist investor Elliott Management. The stock fell over 5%.
Salesforce declined more than 5% after the software giant revealed a management change with the creation of a new role combining two significant positions into one.
Arm, Qualcomm Stocks Fall Amid AI Wait
Yahoo Finance's Laura Bratton reports: Arm Holdings (ARM) and Qualcomm (QCOM) stocks both declined over 4% on Thursday due to quarterly results indicating that the AI boom has yet to generate a surge in demand for consumer devices powered by their chips. Despite outperforming quarterly earnings estimates the previous day, investors remained impatient regarding whether artificial intelligence would drive new consumer device demand.