S&P 500, Nasdaq Find Footing; Bitcoin Regains $1T Market Cap

Investors Have Piled Into ‘Magnificent Seven’ Stocks—Why That May Not Be Good

39 minutes ago

Investors have been piling into the ‘Magnificent Seven‘—driving their stocks to sky-high valuations and major indexes to record highs—on expectations that artificial intelligence (AI)-related business growth will support continued gains.

But Mag Seven’s success isn’t without its risks.

“The Mag 7’s rise has left the S&P 500 at around its most concentrated in at least the last 100 years. Perhaps not since the bubble of 1929 have so few stocks had such high weightings to the overall market,” Deutsche Bank analysts led by Jim Reid wrote in a research note Tuesday. “In turn, their future performance will likely impact the majority of global assets to some, or to a great, degree going forward.”

Read more about what analysts think today’s market concentration does and doesn’t have in common with past bubbles.

–Christiana Sciaudone

Kraft Heinz Stock Slides as Higher Prices and Industry Headwinds Send Sales Tumbling

1 hr 26 min ago

Kraft Heinz (KHC) shares dropped over 6% Wednesday after the food giant reported higher prices and falling demand pulled down sales.

The maker of Heinz ketchup and Kraft macaroni and cheese reported fourth-quarter revenue declined 7.1% from a year ago to $6.86 billion, missing estimates. Earnings per share came in at 78 cents, slightly higher than expected.

Sales in North America were down 9.1% to $5.17 billion, and international sales fell 0.2% to $1.69 billion. Organic net sales slipped 0.7%, as the company raised prices to offset inflation. Kraft Heinz noted it was particularly impacted by cuts in the federal Supplemental Nutrition Assistance Program (SNAP) program, which helps low-income Americans purchase food. 

Kraft Heinz anticipates full-year organic net sales growth for 2024 to be flat to up 2%, slowing from a 3.4% gain in 2023. It projects adjusted gross profit margin to be up 25 to 75 basis points (bps), well below last year’s jump of 240 bps.

Kraft Heinz shares were down 6% at $33.98 Wednesday afternoon, their lowest level since November. They’ve lost more than 15% over the past year.

–Bill McColl

Uber Shares Surge After Unveiling $7 Billion Buyback in First For Ride-Hailing Firm

2 hr 11 min ago

Uber Technologies (UBER) shares surged Wednesday morning after the ride-hailing firm said it is planning to buy back up to $7 billion in shares in its first-ever buyback program.

Uber Chief Financial Officer Prashanth Mahendra-Rajah said in a statement that “the authorization of the company’s first-ever share repurchase program is a vote of confidence in the company’s strong financial momentum.”

Last week, the leading ride-hailing company reported its first annual net profit since going public in 2019. Along with the earnings release, the company said it planned to announce a plan to return capital to shareholders—opening the door to today’s buyback announcement. Uber said last week it had free cash flow of $3.4 billion in 2023, up from $390 million a year earlier.

Uber shares were up 11.8% at $77.13 early Wednesday afternoon. With today’s gains, the stock has risen more than 118% in the last year.

–Fatima Attarwala

Bitcoin Puts Wind in the Sails of Crypto Stocks

2 hr 49 min ago

Shares of cryptocurrency-adjacent companies surged Wednesday as the price of Bitcoin soared past $51,000 to its highest level since December 2021. 

Bitcoin miners Marathon Digital (MARA) and Riot Platforms (RIOT) climbed more than 12% and 10%, respectively, on Wednesday. Crypto exchange Coinbase (COIN) rose more than 11%. All three have risen more than 150% in the last year, outpacing Bitcoin itself, which is up about 120%. 

Bitcoin has risen relatively steadily for the last week as inflows to new spot Bitcoin ETFs have picked up pace. Investors are also looking forward to an imminent halving, which is expected to happen sometime in April. 

Lyft Stock Goes On Wild Ride After Q4 Earnings Beat and Error

3 hr 25 min ago

Lyft (LYFT) shares, which initially skyrocketed following a reporting error by the ride-hailing company, settled nearly 32% higher in intraday trading on Wednesday as fourth-quarter earnings and first-quarter bookings guidance surpassed analysts’ expectations.

The San Francisco-based company disclosed fourth-quarter adjusted earnings of 18 cents per share, more than double the 8 cents a share Wall Street had forecast. Revenue in the period of $1.22 billion increased 4% from the prior year, sitting in line with analysts’ estimates.

Looking ahead, Lyft projects gross bookings in the current quarter to range between $3.5 billion and $3.6 billion, ahead of the $3.46 billion consensus. Moreover, the company sees 2024 adjusted profit margin as a percentage of bookings increasing 50 basis points (BPS) to 2.1%, up from 1.6% in 2023.

The company’s initial press release mistakenly projected annual margin expansion of 500 BPS, instead of 50 BPS, which Lyft’s chief financial officer, Erin Brewer, corrected on the earnings call.

–Timothy Smith

Nvidia Overtakes Alphabet as Third-Largest Public U.S. Company

4 hr 32 min ago

Nvidia (NVDA) shares rose more than 2.5% in early trading Wednesday, launching it past Alphabet (GOOGL) into the position of America’s third-most valuable company. 

Nvidia’s market cap surged to $1.821 trillion Wednesday, while Alphabet’s value ticked up $1.817 trillion. 

It is the second time this week the chipmaker has leapfrogged a fellow tech giant to claim a new position among the country’s public behemoths. Nvidia’s market cap soared past Amazon’s (AMZN) on Monday. 

Nvidia has been the largest beneficiary of the AI boom that has sent investors piling into the Magnificent Seven. Its stock has gained more than 220% in the past year alone. 

Robinhood Stock Jumps as Trading Rebound Helps Drive Earnings Beat

4 hr 55 min ago

Shares in Robinhood Markets (HOOD) soared in early trading Wednesday after the commission-free brokerage firm reported a surprise profit in the December quarter amid higher-than-expected interest income on customer loans and a rebound in retail trading activity.

The online brokerage at the center of the pandemic-era meme stock trading frenzy posted fourth-quarter adjusted earnings of 3 cents a share, whereas analysts had expected the company to report a 1 cent loss. Revenue of $471 million grew 24% year-over-year and also came in ahead of forecasts, which Wall Street had modeled at $455 million.

The company’s net interest revenue in the period grew 41% from a year earlier, driven by higher short-term borrowing rates, while its transaction-based revenue of $200 million improved 8% from the prior year, benefiting from increased trading activity across its cryptocurrency and equity offerings.

The online broker pointed to a 6% fourth-quarter sequential jump in its monthly active user count as a sign that retail traders were wading back into the markets.

Robinhood shares jumped more than 14% Wednesday, putting them on track to have their best day since June 2022.

–Timothy Smith

Stocks Making the Biggest Moves Premarket

5 hr 39 min ago

Gains:

• Lyft Inc. (LYFT): Shares of the ride-hailing company jumped 20% after it forecast better-than-expected bookings in the current quarter and said it would generate positive cash flow this year. The stock had gained more than 60% late Tuesday after it accidentally forecast margins would increase 500 basis points, rather than 50 basis points, this year.
• Robinhood Markets Inc. (HOOD): Shares of the trading platform surged 14% after it reported an unexpected profit in the fourth quarter.
• Uber Technologies Inc. (UBER): Shares of Lyft’s larger rival rose 8% after it announced a $7 billion share buyback authorization, its first initiative to return capital to shareholders following its first profitable year as a public company. 

Losses:

• Instacart (CART): Shares of the grocery delivery company fell more than 5% after it reported fourth-quarter results that were roughly in line with expectations and announced it would lay off 250 employees, or about 7% of its staff. 
• Airbnb Inc. (ABNB): Shares of the vacation rental company slipped about 4% despite reporting better-than-expected sales and offering upbeat guidance. The company reported a loss in the quarter due to one-time tax expenses.
• Kraft Heinz Co. (KHC): Shares of the packaged food giant fell more than 2% after its quarterly revenue of $6.86 billion fell short of analyst estimates. 

Stock Futures Up as Indexes Rebound from CPI Sell-Off

6 hr 17 min ago

Futures contracts connected to the Dow Jones Industrial Average were up 0.4% in premarket trading on Wednesday.

S&P 500 futures were 0.6% higher.

Nasdaq 100 futures gained nearly 0.8%.