On Tuesday, the stock market resumed the upward course it has followed for most of 2023, and the Dow Jones Industrial Average (^DJI +0.49%) set a new closing high for the year. Federal Reserve Chairman Jerome Powell made upbeat comments about how the fight against inflation was progressing, suggesting that the prospects were promising for dramatic reductions in price pressures over the course of the year. The gains made by the S&P 500 (^GSPC -0.17%) and Nasdaq Composite (^IXIC -0.83%) in the session were even steeper than the Dow's advance.
|
Index |
Daily Percentage Change |
Daily Point Change |
|---|---|---|
|
Dow |
0.78% |
266 |
|
S&P 500 |
1.29% |
53 |
|
Nasdaq Composite |
1.90% |
226 |
Data source: Yahoo! Finance.
There's been a lot of hype about AI-powered chatbots lately, with companies scurrying to put the new technology to use in applications such as internet search. But for those who think that share-price gains in the artificial intelligence space seem frothy due to overhyped claims, two other high-performing stocks might seem like a better choice. Below, you'll learn why Zoom Video Communications (ZM -1.45%) and BP (BP -2.90%) did well on Tuesday -- even without any apparent connections to the AI chatbot space (at least for now).
Zoom cuts jobs amid cost reductions
Shares of Zoom Video Communications jumped by 10% on Tuesday, with most of the gains coming late in the day. The video collaboration specialist made a rare midday announcement that had it joining the growing list of companies cutting back on their employee spending.
Zoom revealed in a filing with the U.S. Securities and Exchange Commission that it would implement a restructuring plan intended to reduce its operating costs and boost its opportunities for growth and profitability. A major part of that plan involves cutting Zoom's workforce by 15%, or roughly 1,300 people. That will cost Zoom between $50 million and $68 million in severance, transition, benefits, and other costs. The company's goal is to finish the restructuring by the end of April.
NASDAQ: ZM
Key Data Points
Along with the filing, CEO Eric Yuan attached the letter that went out to Zoom employees about the move. Yuan took the blame for mistakes that the company had made during the early stages of the COVID-19 pandemic that led Zoom to grow in ways that were unsustainable and not always in line with its highest priorities.
Also as part of the cost-cutting measures, Yuan and his executive team will not receive bonuses for Zoom's just-completed fiscal 2023, and the CEO slashed his $1 million salary by 98% for fiscal 2024 to just $20,000. That won't make those who are laid off feel better, but it does indicate a level of empathy that many companies making similar job cuts recently haven't bothered to demonstrate.
BP rides the energy wave
Meanwhile, BP shares finished Tuesday's session higher by 8%. The energy giant's fourth-quarter financial results benefited from high oil prices, and shareholders got a nice dividend boost to go with their sizable share-price gains.
BP's results for the quarter were stunning. Reported profits came in at $10.8 billion, more than four times what BP earned in the year-ago period. Operating cash flow more than doubled, and even the more conservative replacement cost profit metric was up 18% year over year to $4.81 billion.
NYSE: BP
Key Data Points
The energy giant has also taken valuable steps to shore up its business. Its debt levels are 30% below where they were this time last year, even though BP has also boosted its capital expenditures significantly over the past three months. It also had enough left over to boost its dividend by 10% and to implement a $2.75 billion stock buyback program.
Some critics noted that BP's commitment to renewable energy seemed to waver in light of higher prices and demand for fossil fuels. Yet others were satisfied with a plan that includes bioenergy, charging infrastructure, and green hydrogen, and shareholders in the energy company didn't seem troubled by the developments.
