Breakfast News: AI Model Showdown
January 29, 2025
| Tuesday's Markets |
|---|
| S&P 500 6,068 (+0.92%) |
| Nasdaq 19,734 (+2.03%) |
| Dow 44,850 (+0.31%) |
| Bitcoin $101,153 (-0.16%) |
Source: Image created by JesterAI.
1. DeepSeek Scrutiny
Microsoft (MSFT 1.21%) and OpenAI are reportedly investigating suspicions DeepSeek built its new AI app by the back door. Bloomberg says Microsoft experts observed individuals "exfiltrating a large amount of data" from the OpenAI API.
- Why it matters: If true, maybe billion-dollar spend really is needed to build next-generation AI technology. Investors will keenly await further news here.
- That's not all, folks: Alibaba (BABA 1.83%) launched its latest Qwen 2.5-Max AI model Wednesday, claiming it outperforms DeepSeek, GPT-4, and Llama-3.1. Unlike Monday's decline, Nasdaq futures are little changed this morning.
2. ASML Smashes Forecasts
Stock Advisor recommendation ASML Holding (ASML 2.87%) posted Q4 results ahead of expectations, after its stock price suffered in the wake of the DeepSeek sell-off. Net bookings soared 169% to 7.1 billion euros ($7.4 billion), crashing through the expected 4 billion euros.
- "Artificial intelligence is the key driver for growth in our industry": CEO Christophe Fouquet said the shift in market dynamics "creates both opportunities and risks."
- Another record year for sales: Annual net sales hit 28.3 billion euros ($29.5 billion), while 2.7 billion euros ($2.8 billion) in quarterly net profit beat the predicted 2.6 billion euros.
3. Mag 7 Earnings Begin After the Closing Bell
Hidden Gems rec Tesla (TSLA 2.60%) reported a quarterly record of 495,570 vehicle deliveries ahead of Q4 earnings, and expects 20% to 30% more vehicles in 2025. More affordable models expected in the second half could be key.
- "2024 was a pivotal year for Reality Labs": In an internal memo seen by Business Insider, CTO Andrew Bosworth at Rule Breakers recommendation Meta Platforms (META +0.69%), said the Wearables and Metaverse division "beat nearly all of last year's aggressive sales and user goals." Watch for next-generation Llama 4 AI plans, based on 100,000 Nvidia (NVDA +0.64%) H100 chips.
- Azure revenue expected to grow 31-32% in Q2: Microsoft is expected to report revenue of $25.8 billion from its intelligent cloud business, home to its Azure platform. Management is looking for $10 billion in annual revenue run rate in Q2.
4. CrowdStrike Soars on Perfect Score
CrowdStrike (CRWD +0.81%) stock jumped 9.4% Tuesday to reach an all-time high, after the cybersecurity company hit a perfect score on the latest SE Labs ransomware test.
5. Next Up: No Change at the Fed?
The Federal Reserve's latest two-day meeting concludes today, with the CME FedWatch tool showing a 99.5% probability of no further interest rate cut.
- "I'll demand that interest rates drop immediately": President Trump wants quick cuts, but does not have authority over the Fed's decision.
- Growth vs inflation: Cuts should give business and stocks a boost, but could push inflation back up again.
6. Foolish Fun
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