S&P 500 closed above 5,000 for the first time on Friday and Nasdaq briefly traded above 16,000, with boosts from megacaps and chip stocks, including Nvidia as investors bet on artificial intelligence technology and eyed strong earnings data.
Market Snapshot
The S&P 500 rose 0.57% to 5,026.61 points. The Nasdaq rose 1.25% to 15,990.66 points, while Dow Jones Industrial Average fell 0.14% to 38,671.69 points.
Market Movers
Nvidia finished up 3.6% and hit a record high after Reuters reported it was building a new business unit focused on designing bespoke chips for cloud computing firms and others, including advanced artificial intelligence (AI) processors.
Expedia Group reported fourth-quarter adjusted earnings of $1.72 a share, beating analysts’ estimates of $1.68 but shares of the online travel agency slumped 18% after it announced that CEO Peter Kern would be replaced by Ariane Gorin, who has served in multiple roles at the company since joining in 2013, most recently as president for business. Gorin’s appointment is effective May 13. Expedia also reported gross bookings in the quarter of $21.67 billion, up 6%, but a little shy of Wall Street estimates of $22 billion. Competitor Booking Holdings declined 2.1%.
Cloudflare surged 20% after the internet infrastructure company reported fourth-quarter adjusted earnings of 15 cents a share, up from 6 cents a year earlier and ahead of analysts’ expectations of 12 cents. Revenue rose 32% to $363 million and beat estimates of $353 million as the business was “driven by robust momentum with large customers,” Cloudflare said.
Fiscal second-quarter revenue at Affirm Holdings rose 48% from a year earlier to $591 million and the lending and payments company posted a loss of 54 cents a share. Gross merchandise volume rose 32% from last year to $7.5 billion, accelerating for the third consecutive quarter, according to the company, which raised its fiscal-year forecast for gross merchandise volume to more than $25.25 billion, up $1 billion from its prior outlook. The stock fell 11% on Friday after rising 10% on Thursday in the lead-up to the earnings report.
PepsiCo reported fourth-quarter earnings adjusted earnings of $1.78 a share, beating analysts’ estimates of $1.72. Revenue of $27.9 billion fell 0.5% from a year earlier and missed forecasts of $28.4 billion. Shares of the beverages and snacks company fell 3.6%.
AMC Networks fell 15% after the television broadcasting and production company reported a 30% fall in quarterly revenue following a decline in subscribers.
Pinterest reported fourth-quarter revenue that slightly missed Wall Street estimates and adjusted profit of 53 cents a share that exceeded expectations by 1 cent. For the first quarter, Pinterest projected revenue of $690 million to $705 million, up 15% to 17%, but with the middle of that range slightly below Wall Street consensus of $702 million. Shares of the social media site fell 9.5%.
Take-Two Interactive Software reported fiscal third-quarter adjusted revenue, or net bookings, that were in line with analysts’ estimates, but the videogame publisher’s revenue guidance for the fourth quarter of between $1.27 billion to $1.32 billion missed estimates of $1.51 billion. Take-Two said it saw weakness in mobile advertising and revenue from its NBA 2K24 basketball game. The stock declined 8.7%.
Masonite International reached an agreement to be acquired by Owens Corning in a cash deal valued at $3.9 billion, or $133 a share. Shares of Masonite, a manufacturer of doors, rose 35% to $130.51.
Arm Holdings climbed 1.2% on Friday after ending Thursday’s session with a gain of 48% following a bullish revenue outlook and earnings that topped Wall Street expectations. The chip designer has received a boost from a faster-than-expected shift to artificial intelligence.
Market News
Amazon Steers Consumers to Higher-Priced Items, Lawsuit Claims
Amazon.com was sued in a proposed U.S. class action accusing the online retailer of violating a consumer protection law by steering hundreds of millions of shoppers to higher-priced items in order to earn extra fees.
According to a complaint filed on Thursday in federal court in Seattle, Amazon's algorithm for choosing what to display in its "Buy Box" when shoppers search for products often obscures lower-priced options with faster delivery times.
Apple to Settle Trade Secrets Lawsuit Against Chip Startup Rivos
Apple plans to settle a lawsuit that accused tech startup Rivos of stealing its trade secrets related to computer-chip technology, according to a joint court filing on Friday in California federal court.
The companies told the U.S. District Court for the Northern District of California that they had "signed an agreement that potentially settles the case," and that the agreement allows Apple to examine Rivos' systems and recover any confidential information.