Meta soars as investors give thumbs up to AI advances

AI News

Key Takeaways

  • On Friday, June 5, 2024, the S&P 500 rose 0.5% after the latest jobs report showed signs of a cooling labor market and raised hopes of an interest rate cut.
  • Meta Platform shares soared amid suggestions that Facebook's parent company's AI investments may be starting to pay off.
  • Southwest Airlines shares have plummeted after the company recently introduced a “poison pill” plan aimed at preventing activist investors from buying more shares.

Major U.S. stock indexes rose after a shortened trading week following the Independence Day holiday.

Stocks rose on Friday after the June jobs report showed a slowing pace of hiring and a rise in the unemployment rate, raising expectations that the Federal Reserve may move to cut interest rates in the coming months.

The S&P 500 rose 0.5%, closing at an all-time high for a third straight day, the Nasdaq rose 0.9%, closing at a record high again, and the Dow traded in negative territory for much of the session before gaining in the afternoon to close up 0.2%.

Shares of Meta Platforms (META), the parent company of Facebook and Instagram, surged 5.9%, hitting the highest level on the S&P 500 index on Friday, with the stock closing at an all-time high. The rally came amid optimism that Meta's big investments in artificial intelligence (AI) technology may start to translate into increased revenue, with Bernstein analysts noting recently that AI-driven algorithms are increasing the amount of time users spend on Meta's apps.

Shares of healthcare technology company Baxter International (BAX) rose 5.3% after reports that the company is in talks to sell its renal care spinoff, Vantiv, to private equity firm Carlyle Group (CG). The two companies are reportedly in exclusive talks about a deal valued at $4 billion, including debt.

Rising optimism about AI has sent shares of semiconductor maker Advanced Micro Devices (AMD) up 4.9% as the company prepares to ramp up shipments of its latest generation of graphics processing units (GPUs) optimized for generative AI applications, with analysts expecting new AI-related product launches later this year.

Southwest Airlines (LUV) shares fell 5.7%, the biggest drop among S&P 500 stocks on Friday. The airline introduced a “poison pill” shareholder rights plan earlier this week aimed at blocking further acquisition of the company by activist investor Elliott Investment Management, which is calling for a management shakeup.

First Solar (FSLR) shares fell 3.9%, capping a volatile week of trading for the solar technology company. The stock fell on Tuesday after Baird analysts lowered their target price following updated cost and price forecasts, but recovered strongly in shortened trading on Wednesday. First Solar has been gaining attention for its potential to support power demand from AI data centers, but it faces uncertainty over the upcoming presidential election and the future of U.S. clean energy policy.

Shares of computer memory and data storage provider Micron Technology (MU) fell 3.8%. The company's stock has also benefited from AI-related optimism, but the company issued a weak revenue outlook when it reported quarterly results last week, casting doubt on its growth trajectory.

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