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- Weekly Wrap-Up - January 25th, 2025
Weekly Wrap-Up - January 25th, 2025
S&P makes another all-time high
CMG Venture & Mark Roussin
January 25, 2025
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Good morning investors!
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This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.
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Market Talk
The first week of the new presidency saw all three major indexes move higher with the S&P 500 making new all-time highs.
3 Stories Moving the Market
These are some of the biggest stories from the second half of the week that had an influence on market action.
China’s new AI model DeepSeek is threatening U.S. dominance
A Chinese AI lab, DeepSeek, has caused a stir in Silicon Valley by releasing AI models that outperform top U.S. counterparts like Meta’s Llama 3.1 and OpenAI’s GPT-4o, despite being built with less-powerful Nvidia H800 chips and costing under $6 million.
Their latest open-source reasoning model, r1, also surpassed OpenAI's o1 in benchmark tests, raising concerns about America's AI dominance and the massive spending of U.S. tech giants.
DeepSeek’s advancements, achieved under strict U.S. semiconductor restrictions, highlight China's ingenuity in AI development through methods like model distillation to optimize smaller, cost-efficient models. Backed by a Chinese hedge fund, DeepSeek is part of a broader trend of rapid AI progress in China, with other players like 01.ai and ByteDance also making strides.
Experts, including Microsoft CEO Satya Nadella, emphasize the need to take these developments seriously.
👉 EDGE TAKEAWAY: The rise of DeepSeek and other Chinese AI labs presents a significant challenge to U.S. tech dominance, as…upgrade to Edge+ to read the Full Edge Takeaway.
Novo Nordisk shares surged +7% on Friday after the company reported promising early-stage results for its new obesity drug, amycretin.
The injectable treatment demonstrated an average weight reduction of 22% in overweight and obese patients over 36 weeks, compared to a 2% weight gain in the placebo group. This marks a significant development in the obesity drug market, targeting both GLP-1 and amylin hormones to address hunger and weight loss.
The trial, which involved 125 participants, showed mostly mild to moderate gastrointestinal side effects. Novo Nordisk is also advancing an oral version of amycretin, which delivered a 13.1% weight loss in early trials.
The positive results underscore the potential of amycretin as a successor to Novo’s blockbuster drugs Wegovy and Ozempic, bolstering the company’s position in the competitive obesity and diabetes treatment space.
📚 EDGE-UCATION: What is amycretin?
Amycretin is a novel obesity drug under development by Novo Nordisk that combines the effects of two hormones, GLP-1 (glucagon-like peptide-1) and amylin, to promote weight loss.
GLP-1 is a gut hormone that helps regulate appetite and blood sugar levels, while amylin is a pancreas hormone that plays a role in controlling hunger and food intake.
By targeting both receptors, amycretin is designed to enhance weight loss efficacy compared to existing GLP-1-based therapies like Novo Nordisk's Wegovy and Ozempic.
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Twilio shares surged over 20% on Friday, marking their biggest gain since the pandemic, after the company provided an optimistic profit outlook at its investor event.
The company expects its adjusted operating margin to rise to 21%-22% by 2027, surpassing analyst’s's 19.68% consensus, and projected $3 billion in free cash flow over the next three years, significantly higher than the $692 million generated between 2022-2024. For 2025, Twilio anticipates $825-$850 million in free cash flow and operating income, with 7%-8% revenue growth.
CEO Khozema Shipchandler, who succeeded co-founder Jeff Lawson amid activist investor pressure, highlighted the company’s focus on double-digit growth and expansion into new areas like conversational AI, which broadens Twilio’s addressable market to $158 billion by 2028.
Twilio’s preliminary Q4 results indicate 11% revenue growth and adjusted operating income above expectations. Analysts upgraded the stock, citing strengthened profitability and cash flow as drivers for continued upward momentum.
📊 EDGE SCORE: Here’s a look at Twilio’s Edge Score - even with the move higher this week, several valuation metrics show the stock is still interesting here:
Want access to your own Edge Scores? Upgrade to Edge+ today and be one of the first to use the dashboard:
In Other News
In this section, we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.
Zuckerberg Says Meta to Spend Up to $65 Billion on AI in ’25
Boeing expects $4 billion loss for fourth quarter after chaotic 2024
American Airlines Reports Record Fourth-Quarter and Full-Year Financial Results for 2024
Renewables Leader NextEra Expanding Gas, Nuclear for AI Boom
Union Pacific Stock Surges as Earnings Top Expectations, Thanks to Falling Fuel Costs
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Edge+ Posts of the Week
We continue to push out more and more content every week to give investors that edge. Here are the posts Investor’s Edge+ subscribers received this week.
The Edge Report
Mondays are for the investors. Every Monday morning we share exactly what we’re watching in the week ahead, how we’re positioning, and even share a sneak peek into our systems and models. This week we discussed the upcoming earnings and how we were preparing for the week. See the latest full report here:
The Options Edge Report
This week, we dropped the second Edge Options Report for our members—packed with actionable insights and options strategies. This week we broke down a play on Block. See the latest report here:
Earnings Recap
Every week during earnings season is extremely busy for us here at the Edge as we dive into over 100 reports and provide our members with top tier breakdowns and insights. This week we saw earnings from Netflix, P&G, Johnson & Johnson, and more. See this week’s recap:
The Week Ahead
Between a key inflation report, the Fed’s latest interest rate decision and a slew of earnings, including 4 of the MAG7 stocks, next week is shaping up to be a huge week for the market.
Earnings Reports
It is the biggest week of earnings season. Here is the list of names we will be covering next week:
Monday 1/27: Alexandria Real Estate
Tuesday 1/28: Starbucks, General Motors, and Lockheed Martin
Wednesday 1/29: Microsoft, Meta, Tesla, IBM, Lam Research, and Waste Management
Thursday 1/30: Apple, Visa, Mastercard, Intel, Caterpillar, UPS, L3Harris, and Tractor Supply
Friday 1/31: Exxon Mobil, Chevron, and AbbVie
Here is the full calendar of scheduled earnings releases:
Source: Earnings Whispers
Economic Reports
Next week is all about interest rates and inflation, with the Fed set to announce its latest rate decision on Wednesday and a key inflation report in the PCE due out on Friday.
We also get initial jobless claims, GDP data, and several housing reports.
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Thank you for reading this edition of the Weekly Wrap-Up. Have a great weekend!
Until next time investors!
Mark & Chris
The Investor’s Edge
Disclosure
This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.
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