Key Takeaways
- The S&P 500 advanced 0.6% on Wednesday, Jan. 22, 2025, following the announcement of major AI investments and a string of positive earnings releases.
- Netflix shares took off after the video streamer topped quarterly estimates and reported strong subscriber additions.
- The uncertain outlook for renewable energy under the new presidential administration weighed on shares of First Solar and several companies with exposure to wind power.
Major U.S. equities indexes pushed higher after President Trump introduced a joint venture that will pump significant investments into artificial intelligence (AI) infrastructure and as investors digested a spate of strong earnings results.
After touching a record intraday high above 6,100, the S&P 500 finished the session with a gain of 0.6%, ending just below its all-time closing high. The Dow ticked 0.3% higher, while strength in the tech sector helped the Nasdaq climb 1.3%.
Video streaming giant Netflix (NFLX) posted better-than-expected sales and profits for the fourth quarter, and its shares soared 9.7%, notching the top performance in the S&P 500 on Wednesday. Netflix also reported it had added 19 million new subscribers during the period, boosted its share repurchase program by $15 billion, and increased its 2025 revenue outlook. Analysts at JPMorgan said they expect minimal resistance to subscription price hikes announced by Netflix, pointing to the strong slate of programming on the platform this year.
Shares of power management chipmaker Monolithic Power Systems (MPWR) jumped 8.0% on Wednesday, adding to a string of gains dating back to last week. The upturn has coincided with several research firms listing Monolithic Power stock among their “top picks.” Analysts at Deutsche Bank pointed to expectations for revenue growth and margin expansion for Monolithic over the coming years, while Oppenheimer analysts noted that the semiconductor industry’s transition toward higher-power modules could help underpin the company’s long-term growth.
Moderna (MRNA) shares surged 7.3%. The biotech firm received nearly $600 million in additional funding from the U.S. Department of Health and Human Services to advance its development of mRNA vaccines against strains of influenza with the potential to cause a pandemic, including the avian influenza strain H5N1. An additional boost for Moderna came as Larry Ellison, chairman of Oracle (ORCL), spoke at a White House meeting about the potential of artificial intelligence (AI) in developing cancer vaccines.
Shares of Seagate Technology Holdings (STX) added 6.8% following a strong earnings report. The world’s largest manufacturer of hard-disk drives topped quarterly sales and profit estimates, pointing to an improving demand environment. Analysts at Morgan Stanley affirmed the upbeat trends in the hard-disk drive sector, including Seagate stock among their top picks and indicating that consensus forecasts could be underestimating the company’s gross margin trajectory.
Shares of Edison International (EIX)—operator of Southern California Edison, the largest utility in the region suffering from a torrent of devastating wildfires—sank 6.3%, dropping the most of any S&P 500 stock. On Tuesday, a judge ordered Edison to preserve evidence and data related to the origins of the Eaton fire. Several homeowners in the area have filed lawsuits claiming that the company’s equipment may have played a role in igniting the fire. Previous wildfires in the state have been linked to electrical equipment and triggered significant liabilities for utility companies.
First Solar (FSLR) shares fell 6.3% on Wednesday, extending losses posted in the previous session after President Donald Trump returned to office and announced the elimination of several renewable energy initiatives. While shares of the solar panel maker have been volatile in recent months, the stock is down around 20% since Trump’s election victory in November.
President Trump’s initial slate of executive orders included a measure to pause permitting processes for wind energy projects, pending a review by the Department of the Interior. The policy shift weighed on shares of companies with exposure to onshore and offshore wind power generation. Shares of both AES Corp. (AES) and Dominion Energy (D) dropped 5.3%.