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- 📈 Alibaba's 60% Surge
📈 Alibaba's 60% Surge
Celsius to buy rival for $1.8B, Block shares fall after missing estimates, Amazon dethrones Walmart, Strategy raises another $2B for bitcoin, Alibaba stock surges with AI momentum
Evelio Silvera
February 21, 2025
Good morning.
⚡ The Fast Five → Celsius to buy rival for $1.8B, Block shares fall after missing estimates, Amazon dethrones Walmart, Strategy raises another $2B for bitcoin, Alibaba stock surges with AI momentum
🔎 Market Trends → Wall St ends lower as weak Walmart guidance prompts consumer demand worries; US Futures Stabilize After Market Selloff
And now…
⏱️ Your 5-minute briefing for Friday, February 21, 2025:
MARKET BRIEF
Before the Open
As of market close 02/20/2025.
Pre-Market
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Fear & Greed
Markets in Review
S&P 500 Slips as Walmart Warning Hits Retailers
The S&P 500 fell 0.4% to 6,117.5, retreating from its record high. The Dow slid 1% to 44,176.7, while the Nasdaq lost 0.5% to 19,962.4. Financials led the decline, while energy stocks bucked the trend.
The Big Picture:
Investors took a breather after the market’s recent highs, digesting corporate earnings and economic signals. Walmart's cautious outlook rattled the retail sector, fueling concerns about consumer resilience.
Meanwhile, jobless claims rose more than expected, but labor market strength remains intact. The Fed appears in no rush to cut rates, as inflation remains a moving target. Treasury yields eased, with the 10-year down three basis points to 4.51%.
On the commodity front, WTI crude edged up 0.4% to $72.53 a barrel, with supply uncertainties lending support. Gold gained 0.6% to $2,954.80 per ounce, as investors weighed macro risks.
Market Movers:
Walmart (WMT) fell 6.5%, the biggest loser on the Dow and among the worst on the S&P 500. The retail giant’s weak full-year outlook flagged shifting consumer behavior and geopolitical risks.
EPAM Systems (EPAM) slid nearly 13%, the steepest drop on the S&P 500, after issuing disappointing guidance for the quarter and full year.
Hasbro (HAS) surged 13%, leading the S&P 500, as the toymaker beat Q4 profit estimates and announced a $1 billion cost-cutting plan.
Shake Shack (SHAK) jumped 11%, even after reporting sales impacted by the Los Angeles wildfires. The burger chain sees double-digit growth in 2025.
What They’re Saying:
"The labor market remains firm, giving the Fed more breathing room before making its next move on rates," Oxford Economics noted.
WHAT WE’RE WATCHING
Events
Today: S&P Global - Flash Manufacturing Purchasing Managers' Index (PMI) - 9:45am
Why You Should Care: It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy.
Today: S&P Global - Flash Services Purchasing Managers' Index (PMI) - 9:45am
Why You Should Care: Survey of about 400 purchasing managers which asks respondents to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.
Earnings Reports
Today: UScellular, Telephone and Data Systems, Farmer Mac, Uniti Group, Oil States International, Galiano Gold
Monday: Public Storage, Zoom, Domino’s, Hims & Hers, Owens Corning, ONEOK, Realty Income, Trip.com
MARKET BRIEF
Leading News
Alibaba's AI Ambitions Signal a New Dawn for Chinese Tech Giants
Why it matters:
Alibaba's (BABA) triple-digit AI revenue growth and planned infrastructure spending spree could reshape the competitive landscape in global cloud computing, presenting a compelling growth narrative for investors seeking exposure to Asian tech.
Zoom Out:
The e-commerce behemoth is orchestrating a dramatic pivot, channeling its considerable cash flows into what CEO Eddie Wu calls an "aggressive" AI infrastructure buildout. The planned three-year investment will eclipse the company's entire cloud spending over the past decade.
This strategic shift comes as Ryan Cohen, the meme stock whisperer, has quietly amassed a $1 billion stake, suggesting smart money sees value in BABA's AI transformation story. The stock's 60% surge over the past month reflects growing optimism about its partnership with Apple (AAPL) and potential investment in rising AI star DeepSeek.
Key Insights:
Follow the money: While cloud revenue (+13% YoY to $4.3B) still plays second fiddle to e-commerce ($13.8B), the triple-digit growth in AI products for six straight quarters signals a compelling trajectory. Think Amazon Web Services circa 2015 – but with Chinese characteristics.
The profitability paradox: Management's candid admission about near-term margin pressure is actually refreshing. History shows tech giants who invest heavily through cycles (see: AMZZ 2012-2014) often emerge stronger on the other side.
Hidden catalyst: The DeepSeek connection could prove crucial. Just as OpenAI turbocharged Microsoft's cloud ambitions, this partnership might help BABA capture China's massive untapped AI market.
Market Pulse:
"When you see a company willing to bet the farm on infrastructure ahead of demand, it's either brilliant foresight or magnificent folly. With Alibaba's track record and cash position, I'm inclined toward the former." - Veteran Asia tech analyst
Bull’s Take:
Smart investors should view any short-term volatility from increased spending as a potential entry point. BABA's combination of e-commerce cash flows, AI momentum, and strategic partnerships creates a compelling risk-reward setup for patient capital looking to play the Asian tech renaissance.
Headlines
Celsius Holdings to Acquire Alani Nu®, Creating a Leading Better-For-You, Functional Lifestyle Platform (link)
Block misses Q4 profit, revenue estimates. Stock is falling. (link)
Strategy raises another $2 billion with proceeds earmarked for bitcoin purchases (link)
Amazon just dethroned Walmart in quarterly revenue for the first time ever with a bombshell $187.8 billion in sales (link)
Rivian beats Wall Street’s fourth-quarter expectations, but expects lower deliveries in 2025 (link)
Elon Musk quietly built a 2nd mega-data center for xAI in Atlanta with $700 million worth of chips and cables (link)
CRYPTO
Fear & Greed
Headlines
DAILY SHARE
On the Socials
*Hat-tip to wallstmemes