Stock Market Today: Earnings and AI Send Stocks to New Highs

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published 22 January 2025

Contributions from
Joey Solitro

Market participants were in full risk-on mode Wednesday as an AI-fueled rally in big tech stocks and a batch of upbeat corporate earnings sent stocks to fresh highs.

Tech stocks dominated the list of biggest gainers after President Trump unveiled The Stargate Project, a new company formed by Oracle (ORCL), OpenAI, SoftBank and MGX, which will invest up to $500 billion in AI infrastructure over the next four years.

The news boosted shares in many of the market's largest and most important stocks, as they're all essentially monopolistic plays on generative artificial intelligence (AI). At the same time, better-than-expected quarterly results from a number of big names also lifted animal spirits.

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"Stocks are jumping toward fresh all-time highs as investors cheer new stateside AI investments and strong earnings from corporate America," writes José Torres, senior economist at Interactive Brokers. "Today's equity market enthusiasm is being dominated by technology and communication services, which are the only two sectors gaining, as rising interest rates and a stronger greenback weigh on the other nine segments."

Torres adds that "optimism stemming from Davos, Switzerland, where countless company and government leaders are commenting on the need for trade cooperation," also helped sentiment.

Tech and communications names dragging the market higher included much of the Magnificent 7. Nvidia (NVDA, +4.4%), for example, was the group's best performer Wednesday, helping to lift shares in the wider semiconductor sector.

On the software side, Microsoft (MSFT, +4.1%) and Palantir (PLTR, +5.2%) stood out in Wednesday's session, but no major tech stock performed better on the Stargate announcement than Oracle. (See more on Oracle stock below.)

At the closing bell, the blue chip Dow Jones Industrial Average was up 0.3% at 44,156, while the broader S&P 500 gained 0.6% to 6,086. The tech-heavy Nasdaq Composite added 1.3% to end at 20,009.

Stocks on the move

Netflix (NFLX) stock surged 9.7% after the streaming giant beat top- and bottom-line expectations for its fourth quarter, raised its full-year revenue expectations for 2025 and announced price hikes for specific subscription tiers.

Netflix blew past analysts' subscriber addition numbers in the most recent quarter, cementing its place as the premium streaming service in an increasingly crowded and chaotic market for consumers. Indeed, the streamer ended 2024 with more than 300 million global subscribers and topped $10 billion in annual operating profit for the first time ever.

"We enter 2025 with strong momentum, coming off a year with record net additions and having re-accelerated growth," Netflix said in a statement. "Moreover, we're in a leadership position in terms of engagement, revenue ($39 billion), and profit ($10 billion in operating income) in a market that is continuing to expand."

Procter & Gamble (PG) stock increased 1.9% after the consumer products company beat top- and bottom-line expectations for its fiscal 2025 second quarter and reaffirmed its full-year outlook.

PG, a Buy-rated Dow Jones stock, also reaffirmed its outlook for fiscal 2025. The company expects to achieve revenue growth in the range of 2% to 4% and earnings of $6.91 to $7.05 per share.

Although Procter & Gamble has lagged the broader market over the past 12 months, Wall Street remains mostly bullish on one of the best dividend stocks for dependable dividend growth.

GE Vernova (GEV) stock rose 2.7% after the global energy company missed top- and bottom-line expectations for its fourth quarter but reaffirmed its outlook for 2025.

Although GEV's results came up short of analysts' expectations, the company reaffirmed its outlook for 2025. For the full fiscal year, the company expects to achieve revenue in the range of $36 billion to $37 billion, representing growth of 3% to 5.9% over 2024.

Oracle pops on AI billions

Oracle stock jumped 6.7% after the Stargate announcement, but the volatile stock already had upside momentum heading into the trading week.

Since January 13, ORCL stock is up about 12% on a price basis vs a gain of less than 4% for the broader market. Over that span, ORCL added more than $85 billion in market cap. That's essentially equivalent to the entire market value of Moody's (MCO), which is a major holding in the Berkshire Hathaway equity portfolio.

Oracle generated a total return (price change plus dividends) of 59% over the past 52 weeks, vs a gain of 27% for the S&P 500, and Wall Street thinks the tech giant has more upside ahead.

Of the 35 analysts issuing opinions on ORCL, 16 rate it at Strong Buy, six say Buy, 12 call it a Hold and one says Strong Sell. That works out to a consensus recommendation of Buy, albeit with somewhat mixed conviction.

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Dan Burrows is Kiplinger's senior investing writer, having joined the publication full time in 2016.

A long-time financial journalist, Dan is a veteran of MarketWatch, CBS MoneyWatch, SmartMoney, InvestorPlace, DailyFinance and other tier 1 national publications. He has written for The Wall Street Journal, Bloomberg and Consumer Reports and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among many other outlets. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange.

Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.

In his current role at Kiplinger, Dan writes about markets and macroeconomics.

Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.

Disclosure: Dan does not trade individual stocks or securities. He is eternally long the U.S equity market, primarily through tax-advantaged accounts.

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