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Live Markets: GOOGL, AMD, AMZN Weigh on Nasdaq

Gerelyn Terzo

Published: February 5, 2025 11:22 am

Last Updated: February 5, 2025 2:45 pm

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Stocks Hold Their Own, Nvidia Tide Turns

2:45 pm

Stocks are holding steady as of mid-afternoon trading, with all three of the major indices showing fractional moves in either direction. The Nvidia (Nasdaq: NVDA) tide has turned higher as the stock advances 4% in response to massive AI spending unfolding in corporate America, including from Alphabet.

As exciting growth stock Nvidia can be, it’s also one of the most volatile. Some small- and mid-cap AI names are another way to place the industry, though they have their own level of volatility inherent with AI stocks.

• 8×8 (Nasdaq: EGHT) is down 2% on the day, off its worst levels. The company is behind a cloud-based customer experience (CX) platform to which it incorporates AI solutions. With a market cap of $361 million, 8×8 has earned a “buy” rating from Needham analyst Ryan Koont, who on the heels of the company’s earnings increased the price target to $3.50 from $3.
•  The GlobalX ETF (Nasdaq: AIQ) provides investors with broad exposure to the AI space and it is trading fractionally higher on the day.
• The SPDR S&P Kensho New Economies Composite (NYSE Arca: KOMP) similarly offers investors exposure to AI innovation but without some of the biggest names in the space. It is also moving fractionally higher on the day.

AMZN: It’s All About the Cloud

Investors are also on pins and needles awaiting Q4 earnings results from Amazon tomorrow. The company is reportedly planning an AI-infused upgrade to its Alexa robot for later this month. Wall Street analysts remain bullish on Amazon’s cloud demand in its AWS business. BofA analysts expect Amazon’s operating profits to surpass estimates, thanks to solid holiday sales. The Wall Street firm has a “buy” rating on AMZN stock with a price target of $255 per share attached.

Today’s trading reveals technology investors see the glass half empty at the moment. A tech malaise fueled by Google parent Alphabet (Nasdaq: GOOGL) and chipmaker AMD (Nasdaq: AMD) is pressuring the Nasdaq Composite and S&P 500 moderately lower while the Dow Jones Industrial Average is eking out a gain.

The tech malaise can be blamed on Alphabet’s steep 8% drop, owing to a revenue shortfall coupled on top of an aggressive AI spending plan that didn’t sit well with Wall Street. AMD stock, a member of the Nasdaq Composite, is currently down 9% as of mid-morning. Amazon (Nasdaq: AMZN) shares are down in sympathy ahead of the company’s earnings report after the closing bell tomorrow.

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Despite selling pressure the S&P 500 is managing to hover above the key 6,000 level, buoyed by stocks like Newmont Mining (NYSE: NEM) with a 4% gain and trucking company Old Dominion Freight Line (Nasdaq: ODFL) with a 6% jump in response to earnings. On the economic front, the economy appears to be humming as the workforce added a higher than expected 183,000 private payrolls in January, fueled by service providers, while wages rose, according to ADP data.

Here’s a look at the performance as of morning trading:

Dow Jones Industrial Average: up 38.57 (+0.09%)
Nasdaq Composite: down 78.77 (-0.41%)
S&P 500: down 7.76 (-0.13%)

Tech Earnings Roundup

Alphabet’s Q4 revenue missed consensus estimates while the company has earmarked a whopping $75 billion in AI capex, including the development of data centers, amid fierce competitive headwinds from the U.S. and China. Google’s YouTube was another drag as its ad revenue slowed.

AMD’s stock is reeling after its data center revenue failed to meet high expectations. It shows how much AI is running the show, as AMD’s top and bottom lines came in better than expected.

Wall Street Moves

• A slew of analysts responded to AMD’s earnings print. Among them, Citi described AMD’s results as “decent” but lacking on AI revenue guidance. Goldman Sachs analysts called the results “better than feared” while the data center performance fell short.
• As for Alphabet, Goldman Sachs maintains a “buy” rating with a $220 price target, while BofA said, “Street could be underestimating AI Overview benefits for Search monetization in 2025.”
• Grab Holdings (Nasdaq: GRAB) is down 6% on the heels of a JPMorgan analyst downgrade to a “neutral” rating from “overweight” with a $5.60 price target, saying they are looking to better entry levels on the stock.