The stock market rally hit fresh highs, buoyed Salesforce, Credo Technology Group, Marvell Technology and mostly positive earnings. Tame economic data and Fed comments bolstered expectations for a December rate cut. Tesla kept surging while Nvidia, Meta Platforms cleared buy points while Microsoft flashed aggressive entries. Many extended plays grew more. Bitcoin briefly shot up above $100,000 for the first time, buoyed by President-elect Trump's pro-crypto SEC pick and Fed chief Jerome Powell's comments on the "digital gold."
Stock Market Indexes Hit Fresh Highs
The major index all hit record highs during the week, with the Nasdaq leading while the Dow Jones ultimately fell slightly. The small-cap Russell 2000 retreated, but is still close to all-time levels. Salesforce and other upbeat tech earnings led the way. Treasury yields fell amid tame economic data.
Jobs Report Bolsters Fed Rate Cut Hopes
Friday's jobs report likely cleared the way for a Dec. 18 rate cut, despite a stronger-than-expected payroll rebound and upward revisions to prior data. With November's 227,000 payroll increase, including 194,000 in the private-sector, job growth appears to have stabilized, but at a level that's too low to keep up with trend growth in the labor force. Including October's revised 36,000 gain, amid storms and the Boeing strike, the average gain over the past two months is 131,500, or 96,000 for private jobs. The household survey, with a much bigger margin of error, looked far weaker. The unemployment rate rose to 4.2% as the ranks of the employed fell by 355,000, while labor force participation fell by 193,000. Despite the modest trend in job gains, average hourly wages rose 0.4% on the month and 4% from a year ago, both just above estimates.
Bitcoin Tops $100,000
Bitcoin finally cleared the highly anticipated $100,000 threshold to hit a new all-time high of $103,900 early Thursday, CoinMarketCap data showed, but soon fell back to just below the $100K level. The Dec. 5 record surpassed its previous record peak of $99,768 in late November. Bitcoin has clipped new highs in the wake of the U.S. elections, as Donald Trump promised a much friendlier crypto administration during his second term. The President-elect on Thursday picked another pro-crypto cabinet member with his nomination of lawyer Paul Atkins to lead the Securities and Exchange Commission. The former Republican SEC member has cochaired a crypto advocacy group since 2017 and is expected to take a looser stance on crypto regulation than predecessor Gary Gensler. Elsewhere, Federal Reserve Chair Jerome Powell on Wednesday spurred bitcoin higher, calling it "digital gold" and "not a competitor for the dollar." Late Thursday, President-elect Donald Trump named venture capitalist David Sacks, an Elon Musk ally, to be the "White House A.I. & Crypto Czar."
Top UnitedHealth Exec Slain
The assassination of UnitedHealth Group insurance division CEO Brian Thompson in midtown Manhattan on Wednesday morning didn't just rob two boys of their father. It may have shaken an entire industry. UNH stock actually rose on Wednesday, as investors focused on its release of a positive earnings outlook for 2025. But the health care giant's stock and that of other managed-care players sold off on Thursday and Friday, with the downdraft including Humana, Cigna, Centene and Elevance Health. Thompson's wife said he had been subject to threats, possibly over lack-of-coverage issues. UNH removed pictures of other top executives from its website. On Thursday, Anthem Blue Cross Blue Shield reversed a plan to limit coverage of anesthesiology care amid a public backlash. The extent to which Thompson's slaying influenced Anthem's decision isn't clear.
Salesforce Gaps Up On Revenue, AI Hopes
Salesforce reported Q3 earnings rose 14% to $2.41 per share, slightly missing views for $2.44 due to an 18-cent loss on investments. Revenue climbed 8% to $9.44 billion while operating margin came in at 33.1%, both topping estimates of 32.2%. Management said the company signed 200 Agentforce deals in the quarter. Salesforce recently pivoted to autonomous AI agents. As a result, expectations for monetizing artificial intelligence products have increased for 2025. Salesforce forecast Q4 revenue in line with consensus. Shares gapped higher, with many other business software stocks also rallying.
Nasdaq Nears 20,000 But This Risk Rises
Cybersecurity Earnings Strong
Cybersecurity firms reported strong results, though their stocks varied. Zscaler said fiscal Q1 earnings rose 36% adjusted while revenue climbed 26% to $628 million. Fiscal Q1 billings rose 13% to $516.7 million. For the current Q2, Zscaler guided fractionally higher. Shares rose modestly for the week. SentinelOne broke even in the October quarter vs. a 3-cent loss a year earlier. Revenue rose 28% to $210.6 million. But January-quarter revenue guidance was just above consensus. Investors were hoping for more upside stemming from the CrowdStrike IT outage in July. Shares tumbled. Okta reported a 52% EPS gain while revenue climbed 14% to $665 million. Okta guided up on fiscal Q4 revenue. Shares jumped but hit resistance. Rubrik reported an adjusted Q3 loss of 21 cents per share, narrowing from a 47 cent loss a year earlier. Revenue jumped 43% to $236.2 million. The Microsoft-backed 2024 IPO reported subscription-based annual recurring revenue of $1 billion. Net new ARR of $83 million topped consensus of $58 million and improved from $63 million in Q2. Shares skyrocketed.
Credo Tech Spikes On Earnings, Guidance
Credo Technology Group said fiscal Q2 earnings leaped 600% to 7 cents a share while revenue rose 64% to $72 million. For the January quarter, Credo forecast revenue of $120 million, blasting past estimates of $85 million. Among its products are active electrical cables. AECs connect computer servers to networking equipment such as switches or routers. Credo's biggest customers for AECs are Microsoft and Amazon.com. Shares spiked 48% on Tuesday to a new high.
Marvell Stock Is A Marvel
Amid strong demand for custom artificial intelligence chips, Marvell Technology a 5% EPS gain with fiscal Q3 sales up 7% to $1.516 billion in its fiscal Q3. Marvell guided up on fiscal Q4. The company makes custom AI chips for Google, Amazon and Microsoft. Shares soared.
Amazon Takes On Nvidia
Shares climbed to record highs following its re:Invent customer conference for the tech giant's cloud business. Amazon Web Services stepped up its efforts to offer an AI chip alternative to Nvidia. AWS announced that Apple is among enterprises using its Trainium2 AI chip, while a Trainium3 chip will launch next year. Amazon is also building an "UltraCluster" of custom AI chips and servers that will train the latest models from Anthropic, the AI startup Amazon has invested $8 billion into. Chief Executive Andy Jassy also announced a new line of AI models called Amazon Nova, which AWS will offer to enterprise customers.
Big-Box Giants Roar As They Create Amazon-Like Businesses
Tesla Soars Even As Pay Deal Nixed
Delaware Court of Chancery Judge Kathaleen McCormick stuck with her January decision and once more rejected Elon Musk's $56 billion compensation package from 2018. Meanwhile, Tesla China sales are tracking to another impressive quarter, but Europe and the U.S. are weak, making it unclear if the EV giant will achieve delivery growth for 2024. But Tesla shares hit their highest levels since early 2022 as more analysts raised price targets, buying into Elon Musk's optimism over Full Self-Driving and more.
Trendy Retailers Are Fickle
Ulta Beauty and Lululemon Athletica surged Friday on earnings after struggling for much of the year. Victoria's Secret had a modest reaction to results, but is trading at 52-week highs. American Eagle Outfitters plunged on weak sales and holiday-quarter guidance.
News In Brief
American Airlines guided up significantly on Q4 EPS as well as other metrics, while Southwest Airlines hiked its forecast for growth in revenue per available seat mile. Both stocks jumped, with other airlines also climbing.
Intel abruptly announced the retirement of CEO Pat Gelsinger, amid board dissatisfaction with his four-year tenure. His ouster raises questions about the strategy for the long-ailing chip giant.
Eli Lilly said Wednesday its obesity treatment, Zepbound, stoked more weight loss in a 72-week study than Wegovy from Novo Nordisk. Participants with obesity and one other medical condition — but not diabetes — lost up to 20.2% of their body weight. Wegovy recipients, on the other hand, lost 13.7% of their body weight.
NCino reported a 50% EPS gain in the October-ended quarter, with revenue up 14% to $138.8 million, both beating. But the financial software plunged on weak guidance for the current quarter, though shares came off lows.
Chewy reported a 33% adjusted EPS gain, but fell short of estimates. Revenue rose 4.8% to $2.88 billion, edging out views for $2.86 billion. The pet product supplier's active customers dipped vs. a year earlier. CHWY stock fell solidly, dropping below a buy point but finding support.
Shift4 Payments fell after President-elect Donald Trump tapped its founder and CEO, Jared Isaacman, to lead NASA. Isaacman is a private astronaut and close associate of Tesla and SpaceX founder Elon Musk, who is an advisor to Trump. Shift4 competes with Clover, owned by Fiserv, as well as Square, owned by Block and Toast. Toast plunged on weak payment volume guidance.
Palantir Technologies got a higher rating for secure cloud computing services from the federal government The higher FedRAMP authorization builds on Palantir's previous ratings and enables the U.S. government to process the most sensitive unclassified workloads in Palantir's cloud offering. Later, Palantir formed a partnership with Booz Allen Hamilton, a key government consultant. PLTR shares soared for the week.
Foot Locker reported a 10% EPS gain while sales fell 1% to $1.97 billion, both missing Q3 views. The mall-based athletic shoe maker also cut guidance amid softer demand and a higher promotional environment. Shares slumped.
Kroger earnings rose 3%, edging past views. Sales fell 1% vs. expectations for a modest gain. CEO Rodney McMullen expects the "macroeconomic environment to remain uncertain near-term." That contrasted with management comments on the last earnings call about "positive customer trends" driving sales. The Albertsons merger deal remains in doubt amid an FTC lawsuit. Kroger stock reversed higher on earnings, within a buy zone.
Pure Storage beat views with flat earnings beat and a 9% sales rise to $831.1 million. The company also said its flash memory technology notched a "first-ever" design win with an unnamed top-four cloud hyperscaler. Pure Storage shares soared.
Veeva Systems jumped after reporting adjusted EPS grew 31% while sales advanced 13% to $699.2 million. Both beat Q3 expectations. Earnings climbed almost 31% while sales advanced 13%. The lion's share of revenue came from Veeva's subscription services business. The medical software company also raised its full-year outlook.
Hewlett Packard Enterprise said fiscal Q4 earnings rose 12% adjusted while revenue climbed 15% to $8.5 billion. Both beats. Revenue from AI servers came in at $1.5 billion vs. $900 million in fiscal Q3 and $400 million in Q2. Shares rose slightly, within a buy zone.
Box posted a 45% EPS gain while sales advanced 5% to $275.9 million, both beating Q3 views. But the cloud file-sharing company's total billings came in slightly lower than expected. Shares tumbled.
Samsara doubled Q3 EPS to 8 cents vs. views for a flat 4 cents. Revenue rose 36% to $322 million. Analysts expected Samsara to report a profit of 4 cents a share on sales of $310.6 million, also beating. Annual recurring revenue from subscriptions rose 35% to $1.35 billion, just topping estimates. But the Internet of Things and AI play guided fractionally lower for current-quarter revenue. IOT stock plunged.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
