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AI Stocks Continue Dominant Run, Electric Vehicle Demand Cooling, Big-Tech Earnings Releases, and Small-Cap Risers Of The Week

Written byEvan Berryman

Published on10 February 2024

What Happened In The Stock Market This Week?

It was another consequential week in the market as the S&P 500 briefly exceeded the 5,000 level for the first time ever as bulls celebrated, earnings season continued in full effect and saw AI companies continue their dominant run, car companies re-shift strategy and resources to gas-powered vehicles as consumer demand for electric vehicles continues to wane, more quarterly earnings for large tech companies were released, and small-caps once again made noise this week; one even increasing by more than 1,000% in a single trading day.

This week saw a few AI (artificial intelligence) focused companies including $PLTR (Palantir Technologies), and $ARM (Arm Holdings plc) release their quarterly earnings reports and showed once again that AI is still a quickly-growing industry and more capital is heading into the sector as share prices for both companies increased.

Meanwhile, car manufacturers such as $TM (Toyota Motor Corp), and $F (Ford Motor Company) had solid earnings reports and saw their share prices increase as a result. Both companies have made the strategic shift toward focusing the majority of their resources back on the production of gas and/or hybrid vehicles rather than fully-electric vehicles as consumer demand for fully-battery powered cars continue to cool.

More large tech companies released their quarterly earnings reports this week as well. These companies included $SPOT (Spotify Technologies), $SNAP (Snapchat), $UBER (Uber Technologies), $PYPL (Paypal Holdings), $PINS (Pinterest), and $DIS (Walt Disney Company), with some soaring on earnings and others cratering as a result.

There were also a handful of small-cap stocks that made noise in the trading community including $TENX (Tenax Therapeutics), $HKIT (Hitek Global), and $HOLO (MicroCloud Hologram) which soared more than 1,000% in a single trading day. We'll discuss the volatile movers later in the Traders' Recap.

Let's get into it, traders!

Palantir Technologies Inc. ($PLTR):

We'll start with the sector that has taken the market by storm since 2023, Artificial Intelligence. Shares of $PLTR traded down by nearly 2% during the morning session on Monday as market participants awaited the release of the company's Q4 earnings report.

After the release of the company's Q4 earnings report, shares of $PLTR gapped-up more than 25% during the mornings session on Tuesday. The spike in share prices came after a stellar earnings report in which the company's commercial business grew an "eye-popping 70% in Q4 and commercial customer count grew 44%.". The company also recorded an increase in revenue for Q4 by 20%, beating Wall Street estimates.

In a letter to shareholders, Palantir Technologies, CEO, Alex Karp wrote, "demand for large language models in the United States continues to be unrelenting.". $PLTR is best known for its defense and intelligence work with the United States government.

Arm Holdings plc ($ARM):

Continuing on in the artificial intelligence sector, we recap the move that $ARM made this week. Shares of $ARM traded relatively flat during the morning session on Wednesday as market participants eagerly awaited the release of the company's Q3 & Q4 earnings report.

$ARM made it's debut on the market in September of last year. $ARM is a semiconductor and design design that is firmly in the spotlight of the AI craze which has been dominating the market over the last year. They were also one of the most eagerly awaited IPO's of 2023. The company already has massively sized commercial customers including Nvidia, Apple, Google, and Microsoft, as more technology need hefty processors to run their workloads, which $ARM delivers on.

Shares of $ARM rose more than 45% during the market session on Thursday as $ARM delivered better-than-expected earnings for Q3 and issued strong guidance for the year ahead. $ARM broke through the $100 barrier for the first time in it's existence after the strong earnings report release, and added nearly $38B to its total market cap.

Toyota Motor Corp ($TM):

Shares of $TM traded higher by more than 5% during the morning session on Tuesday as market participants awaited the release of the company's Q3 earnings report in the post-market session.

After the release of the company's Q3 earnings report, shares of $TM soared more than 8% in the post-market session on Tuesday. Toyota raised its full-year operating profit forecast by nearly 9% on Tuesday after its Q3 earnings easily beat analyst expectations. The company attributed its positive earnings to a weaker yen and strong sales of high-margin cars and hybrid vehicles, combined with the cooling of consumer demand for fully-battery powered vehicles.

Toyota also announced yesterday that they would invest $1.3B into their Kentucky facility for full-electrification efforts, including the assembly of a new, three-row fully-electric SUV for exclusively for the United States market.

Ford Motor Company ($F):

Continuing on in the car sector, shares of $F traded higher by more than 2% during the morning session on Tuesday as market participants awaited the release of the company's Q4 earnings report.

After the release of the company's Q4 earnings report, shares of $F soared more than 10% in after-hours trading. Ford reported Q4 sales that easily beat analyst expectations and projected a full-year profit outlook for 2024 that should also beat analyst estimates. This even after the company is still forecasting more losses for its EV unit. Ford also announced a first quarter dividend of $0.15 per share and will also include a special dividend of $0.18 per share.

Hertz Global Holdings Inc. ($HTZ):

Finishing off in the automobile sector, we'll discuss the car rental service, Hertz. Shares of $HTZ traded higher by more than 8% during the market session on Tuesday after the release of the company's Q4 earnings report that same morning.

What's strange about this move, was that it was more in reaction to guidance than to the earnings report itself, as the company did in fact report wider-than-expected losses for the previous quarter after offloading around 20,000 Tesla EV's from its inventory. In addition the company announced it will no longer be buying 65,000 EV units from Polestar.

$HTZ just recently reached a 52-week low in January of this year. Market participants did however, take kindly to company guidance as CEO, Stephen Scherr said, "we continued to face headwinds related to our electric vehicle fleet and other costs in Q4...our planned reductions in EV's and cost base will improve financials heading into 2025".

Spotify Technology ($SPOT):

We'll shift our discussion to the technology and streaming sector as a multitude of tech and streaming companies released quarterly earnings this week, and we'll begin with Spotify.

Shares of $SPOT gapped-up by more than 8% during the morning session on Tuesday, after the release of the company's Q4 earnings report. Spotfiy delivered strong results in Q4 and all of their KPI's met or exceeded guidance. The company said in their earnings statement, "With revenue and profitibality trends both inflecting favorably heading into 2024, we view the business as well positioned to deliver improving growth and profitability.". The main focus of excitement for market participants was the fact that $SPOT beat expectations for subscribers and listeners in Q4, as their platform continues to gain traction across the globe.

Snap Inc. ($SNAP):

Continuing on in technology sector we'll discuss parent company of the popular app, Snapchat, Snap Inc.

Shares of $SNAP traded higher by more than 3% during the morning session on Tuesday as market participants awaited the release of the company's Q4 earnings report during the post-market session.

After the release of the company's Q4 earnings report, shares of $SNAP plummeted more than 30% during after-hours trading. This came after the company reported a miss on revenue and issued pessimistic guidance for the year to come. The company reported that they are struggling with a slower rebound from a tough 2022 advertising market than other larger tech-giants like Meta.

$SNAP had one of its three worst days in the market since its IPO-day, more than 7 years ago on Tuesday. Analysts' at Morgan Stanley noted that strong ad improvements and impression growth from Meta and Amazon represent another threat for Snapchat's ad revenue.

Walt Disney Company ($DIS):

Turning to a somewhat newly established streaming service provider we recap what happened this week with Disney.

Shares of $DIS traded down by roughly 2% as market participants awaited the release of the company's Q1 earnings report in the after-hours session.

After the release of the earnings report, $DIS stock climbed higher than 8% during the market session on Thursday and hit 52-week highs. Disney reported better-than-expected earnings on Wednesday as the company slashed costs while revenue stayed stagnant. Disney said it's currently on pace to cut costs by $7.5B by the end of their fiscal Q4. Disney also said they expect their EPS (earnings per share) to increase to $4.60 per share this year, which is approximately an increase of almost 20% compared to 2023. Disney also announced it will take a $1.5B stake in Fortnite studio, Epic Games, and launch its flagship ESPN streaming service in Fall of 2025.

Uber Technologies Inc. ($UBER):

Moving to the technology company best known for their ride-share service app, we discuss Uber.

Shares of $UBER fell roughly 1.5% during the morning session on Wednesday, even after the release of a stellar Q4 earnings report. $UBER posted its first, full-year profit in 2023, as a publicly traded company, and projected growth into Q1 of this year. This marks the end of the company giving priority to growth over profits in its overall strategy. The company also reported Q4 results that beat analyst estimates on top and bottom lines. The company reported revenue for Q4 that was up 15% from Q4 in 2022.

CEO, Dara Khosrowshahi said "2023 marked a year of sustainable, profitable growth for Uber" and noted that the boom was primarily due to a consumer shift in spending from retail to services. Khosrowshahi went on to say, "People are going out to dinner, they're going out to concerts, sports events, etc. And when people go out and they spend money, or when they want anything delivered to their home, Uber benefits.".

PayPal Holdings Inc. ($PYPL):

Turning to the payment-provider technology company, we discuss PayPal.

Shares of $PYPL traded relatively flat during the market session on Wednesday as market participants awaited the release of the company's Q4 earnings report.

After the release of their Q4 earnings report, shares fell more than 10% during the market session on Thursday, even after the company reported better-than-expected earnings and revenue. The drop in share prices was due to weak guidance from company leadership in which they announced that EPS (earnings per share) for the full-year will fall below expectations of $5.48 per share down to $5.10 per share. The company also announced it would cut 2,500 jobs, equal to about 9% of its global workforce.

CFO, Jamie Miller, said on the earnings call, "that the company will stop providing annual guidance, and instead just provide an outlook for the current quarter. Given the considerable changes underway at the company, we believe it is prudent to guide revenue one quarter ahead and provide updates as the year progresses."

Pinterest Inc. ($PINS):

In the last technology company we'll discuss this week, we turn our attention to Pinterest.

Shares of $PINS traded relatively flat as market participants awaited the release of the company's Q4 earnings report in the post-market session on Thursday.

Shares of $PINS fell by more than 10% during the morning session Friday after the release of the company's earnings report in the after-hours session on Thursday. The drop in share prices was due to a handful of reasons including the company missing on sales and issuing a weaker-than-expected forecast for the year ahead.

Some positives for the company were the number of active users increased to 498 Million in Q4, a nearly 11% increase. Pinterest, CEO, Bill Ready announced a "3rd-party app integrations with Google" in which the integration could help better "monetize markets" outside the United States. He went on to add that "We see Pinterest as significantly under-monetized across the board, but the most-under monetized internationally", and that the Google integration could help "going forward" to solve this issue for the company.

MicroCloud Hologram ($HOLO) (Small-Cap):

Let's talk about the absolute craziest move of the week, particularly for short-sellers, which occurred on Wednesday.

Shares of $HOLO soared more than 1,000% during the morning session on Wednesday, and during the post-market reached heights of more than an 1,800% increase from its previous close, after news broke that holographic technology research and development company announced plans to join the Communications Industry Association.

The Communications Industry Association focuses on the sharing of information on an international level, which allows companies across the globe to make use of this shared pool of knowledge to further progress the communications sector.

The stock fell back below $20 per share at one point during the market session on Friday.

Hitek Global ($HKIT) (Small-Cap):

In our second small-cap recap of the week, we will discuss Hitek Global ($HKIT).

Shares of $HKIT soared more than 400% during the market session on Thursday, even as no clear news from the company was released to cause the spike in trading volume. More than 70M shares of the company were traded on Thursday, this way above its average daily volume of about 273,000 shares traded. The only noteworthy event surrounding the company itself is that a general shareholder meeting is scheduled for Monday. The primary focus of the meeting is for the approval of new directors, as well as reverse stock split.

It's also worth noting that this could be what as known as a "sympathy play" to what was the most parabolic small-cap stock of the week, MicroCloud Hologram ($HOLO). A sympathy play in stock trading happens when the price of a company is affected by the news of another company within the same geographic region or industry. In this case, both companies HQ's are in China and they both are in the technology sector, and had roughly the same market cap.

The stock fell below $3 per share during the market session on Friday.

Tenax Therapeutics Inc. ($TENX) (Small-Cap):

In our final small-cap recap of the week, we will discuss Tenax Therapeutics Inc. ($TENX).

Shares of $TENX soared more than 100% during the morning session on Tuesday after United States regulators endoresed its patent application related to its heart failure therapy, Levosimendan. IF granted the patent, Levosimendan will be protected until December of 2040 and potentially beyond. The patent relates to the oral, subcutaneous, and intravenous forms of Levosimendan used in patients with heart failure.

The stock fell below $5 per share during the market session on Friday.

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