Stock Market Today: Netflix, Alphabet Lead Rally in Tech Stocks
Netflix reported much higher-than-expected subscriber growth, while Wall Street cheered Alphabet's layoff announcement.
Stocks ended the week on a high note. And while the buying was widespread on Friday, tech stocks were the clear winner as investors cheered impressive subscriber growth from streaming giant Netflix (NFLX) and news that Google parent Alphabet (GOOGL) is undergoing its biggest round of layoffs ever.
Last night, Netflix reported fourth-quarter earnings of 12 cents per share, much lower than the 45 cents per share analysts were expecting, due to forex headwinds. Revenue of $7.85 billion matched the consensus estimate. But the real number investors were looking for was the subscriber growth, and Netflix blew that out of the water. Specifically, the company added 7.66 million paid subscribers over the three-month period – a time frame that included the launch of a lower-price, ad-supported tier. This compared to Wall Street's expectation for 4.57 million additions. Netflix also said founder Reed Hastings will step down as co-CEO, and will be replaced by Chief Operating Officer Greg Peters. The stock rose 8.5% as a result.
"Netflix has had a show-stopping end to the year, in a performance even its worst critics can't argue with," says Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. "While Wall Street sags with the weight of recession fear and Federal Reserve jitters, Netflix's huge beat on subscriber numbers has injected some much-needed optimism into the mix."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Elsewhere in the tech space, Alphabet said it is cutting roughly 12,000 positions, which works out to be about 6% of its global workforce, sending its shares up 5.3%. "Over the past two years we've seen periods of dramatic growth," Sundar Pichai, CEO of Alphabet, wrote in a memo to employees. "To match and fuel that growth, we hired for a different economic reality than the one we face today." This follows similar layoff announcements from several big tech companies in recent months, most notably Amazon.com (AMZN), Meta Platforms (META) and Microsoft (MSFT).
Big gains for Netflix and Alphabet stocks helped the tech-heavy Nasdaq Composite outperform today (+2.7% at 11,140), though the broader S&P 500 (+1.9% at 3,972) and the blue-chip Dow Jones Industrial Average (+1.0% at 33,375) still notched robust gains.
3 Hot Earnings Reports to Watch
So what's in store for next week? Lots of chatter around what the Federal Reserve may or may not do at its upcoming two-day policy meeting, set to kick off on Tuesday, Jan. 31. Ahead of this, Wall Street will get more data on how the economy is holding up amid the central bank's efforts to tame inflation through aggressive interest-rate hikes, with the first reading on fourth-quarter gross domestic product (GDP) due out on Thursday. Additionally, December's personal consumption expenditures (PCE) index – the Fed's preferred measure of inflation that tracks consumer spending – will be released Friday.
And throughout the week, investors will sift through a jam-packed earnings calendar. Among the notable names set to report quarterly earnings are Dow Jones stocks Microsoft and Visa (V). Electric vehicle maker Tesla (TSLA) is also on the docket. Despite a dismal end of the year for Tesla stock, analysts still expect solid growth in the company's Q4 financial results.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.
-
Farewell Paper I-Bonds: Savings Bonds Are Going Online-Only
The last remaining way to buy a paper savings bond in the U.S. (with your income tax refund) won't be available from January 2025. Tax filers will still be able to buy I-bonds online, however.
By Lisa Gerstner Published
-
Is Medicare a Good Reason to Wait Until 65 to Retire?
The average retirement age is 62, but many people wait until Medicare starts at 65. Should health care be the key driver of your retirement date?
By Evan T. Beach, CFP®, AWMA® Published
-
Tesla's Robotaxi Event: What Wall Street Expects
Tesla’s robotaxi event kicks off next week. Here’s what Wall Street expects to see and how analysts feel about the stock heading into the event.
By Joey Solitro Published
-
What Stocks Are Politicians Buying and Selling?
Some of the trades made by members of the House and Senate might surprise you.
By Dan Burrows Published
-
What's Next for Visa Stock After DOJ Lawsuit?
Visa stock continues to fall after the Justice Department accused the payments giant of monopolizing the debit card market. Here's what investors need to know.
By Joey Solitro Published
-
Stock Market Today: Visa's the Worst Dow Stock After DOJ Sues
The blue chip stock sold off after the Justice Department accused Visa of monopolizing the debit card market.
By Karee Venema Published
-
Stock Market Today: Dow, S&P 500 Eke Out New Highs
Intel was among the best performers Monday, boosted by M&A news and reports of a potentially massive cash infusion.
By Karee Venema Published
-
Stock Market Today: Stocks Close Out Fed Week on a Quiet Note
Nike jumped on news it's replacing its CEO, while FedEx slumped on disappointing earnings.
By Karee Venema Published
-
Stock Market Today: Dow Gains 522 Points in Fed-Fueled Session
The blue chip index closed above the psychologically significant 42,000 level for the first time ever Thursday.
By Karee Venema Published
-
Is Amazon Stock Still a Buy After Pay Hikes, Prime Benefit?
Amazon announced a pay increase for its fulfillment and transportation employees, as well as a free membership to Prime. Here's what investors need to know.
By Joey Solitro Published