Stocks started slow Tuesday as the hangover from Monday's broad-market beating lingered. However, a buy-the-dip mentality quickly settled in, with all three main indexes boasting big gains by the time the closing bell rang.
Indeed, after suffering their biggest one-day drops in two years, the Dow Jones Industrial Average jumped 0.8% to 38,997 and the S&P 500 added 1% to 5,240. Not to be outdone, the Nasdaq Composite surged 1% to 16,366 on strength in several mega-cap stocks.
Nvidia (NVDA), for instance, jumped 3.8%, gaining $89 billion in market value along the way, as Wall Street brushed off rumors its Blackwell artificial intelligence (AI) chips may be delayed.
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Even if the media reports are true, the impact will likely be minimal and short-lived, says Oppenheimer analyst Rick Schafer (Outperform, the equivalent of Buy). "NVDA's competitive position remains sound," he notes, adding that Nvidia is "best positioned in AI, benefiting from full stack [of] AI hardware/software solutions."
Meta pops in market rebound
Meta Platforms (META) was another Magnificent 7 stock that outperformed Tuesday, rising 3.9%. In an early morning note, Morgan Stanley analyst Brian Nowak (Overweight, the equivalent of Buy) warned that internet stocks are at risk if consumer spending slows, but says the Facebook parent is better-positioned to navigate such a scenario compared to its peers.
Nowak has a $575 price target on Meta, representing an implied upside of more than 16% to current levels.
Wall Street isn't worried about Google's antitrust ruling
Elsewhere in the mega-cap space, Alphabet (GOOGL) stock slipped 0.6% after falling more than 4% on Monday following a U.S. federal judge's ruling that Google unlawfully held a monopoly in search and text advertising.
Needham analyst Laura Martin (Buy) thinks the ruling will have a minimal near-term impact on the stock. "We believe consumers give Google Search its monopoly, so even without its exclusive contracts, consumers will download the Google app and its Search market share won't change materially," Martin says, adding that Alphabet remains "our top large-cap stock pick for 2024."
Palantir, Uber climb after earnings
Looking at the earnings calendar, Palantir Technologies (PLTR) stock rallied 10.4% after the data analytics provider beat top- and bottom-line expectations for its second quarter and raised its full-year revenue forecast.
"This was a game changer quarter for the Palantir story as the AIP [Artificial Intelligence Platform] monetization piece on U.S. commercial was front and center as a major growth driver," says Wedbush analyst Daniel Ives, who reiterated a Buy rating on PLTR stock after earnings.
In other earnings news, Uber Technologies (UBER) was one of the best S&P 500 stocks Tuesday, spiking 10.9% after the ride-hailing company topped expectations for its second quarter. It was also the sixth consecutive quarter that trip growth topped 20%.
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