During the dot-com bubble of the late 1990s, some internet companies saw their stock prices soar despite having no profits—or even revenue. A famous example is Pets. com, an online pet supply retailer that went public in February 2000 at $11 per share. The stock initially rallied 27% to a peak of $14 per share, fueled by investor speculation, but soon plummeted. Just 268 days after its IPO, Pets .com went bankrupt, becoming one of the most infamous failures of the dot-com era.
Market Wrap
On Friday, February 14, 2025, global financial markets were influenced by several economic, macroeconomic, and political developments, with the S&P flat for the day.
U.S. Tariff Policies: President Donald Trump announced plans for reciprocal tariffs on countries imposing taxes on U.S. imports. While specific details were pending, this announcement introduced uncertainty in the markets, leading to cautious investor sentiment.
U.S. Retail Sales Data: The U.S. Census Bureau released retail sales data for January 2025 at 8:30 a.m. EST on February 14, 2025. The report indicated an unexpected decline of 0.9%, the largest drop in nearly two years. This downturn was attributed to adverse weather conditions and consumer concerns over potential tariffs, raising questions about the strength of consumer spending and its impact on economic growth.
Federal Reserve's Stance: The Federal Reserve maintained a data-dependent approach, refraining from proactive policy changes due to previous forecasting errors and unpredictable policy shifts. This cautious stance led to debates about the Fed potentially lagging behind economic developments.
Currency and Bond Markets: The U.S. dollar weakened, reaching its lowest point this year, influenced by falling Treasury yields and delays in tariff implementations. This depreciation was evident against currencies like the euro and yuan.
Geopolitical Developments: Ongoing peace talks between the U.S. and Russia regarding the Ukraine conflict positively impacted European markets. Sectors heavily reliant on energy experienced gains, and natural gas prices declined, suggesting optimism about a potential resolution.
These factors collectively contributed to a complex and cautious environment in global markets, with investors closely monitoring policy decisions, economic indicators, and geopolitical events.
Applied Materials dropped by 8.2% despite reporting strong earnings. The stock fell due to weaker-than-expected revenue guidance, as investors worried about a potential slowdown in semiconductor equipment spending.
Airbnb surged 14% after reporting stronger-than-expected earnings. The company saw a significant increase in bookings, and its forward guidance exceeded analyst expectations, reinforcing investor confidence in the travel sector.
Dell Technologies rose almost 4% after reports of a potential $5 billion deal with Elon Musk’s xAI. The deal could enhance Dell’s role in AI infrastructure, fueling optimism about its long-term growth in high-performance computing.
Howmet Aerospace gained 4.2% and hit a 52-week high, outperforming competitors. The stock benefited from increased demand in the aerospace and defense sector, particularly as airlines and manufacturers ramped up production post-pandemic.
GoDaddy fell by 14% after missing profit estimates and reporting a decline in its customer base. Investors reacted negatively to slowing growth in domain registration and web services, with weaker guidance adding to concerns.
DraftKings climbed 8.7% after surpassing profit estimates and raising its full-year revenue forecast. The company continues to benefit from increased sports betting activity, and its recent acquisition of Jackpocket further expanded its market reach.
DaVita plummeted by 11% due to a disappointing forecast, citing higher healthcare costs and lower reimbursement rates. Investor sentiment worsened after Berkshire Hathaway reduced its stake in the company, adding to concerns over its long-term growth prospects.
SoundHound AI experienced a significant decline of 28% after NVIDIA disclosed selling its entire stake in the company. Despite this setback, SoundHound remains optimistic about its future, projecting potential revenues of $84 million in 2024, amid growing interest in AI technology.
Serve Robotics saw its shares plummet by 39.6% following NVIDIA's announcement of exiting its investment in the company. The move raised concerns about Serve Robotics' growth prospects, especially given its focus on the niche market of autonomous delivery solutions.
Digital Brands Group skyrocketed by 147.73% after announcing a major partnership with a leading e-commerce platform. The surge was likely driven by retail investor enthusiasm and potential short squeezes, making it one of the most volatile stocks of the day.
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