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The Key Takeaways
- The S&P 500 added 0.6% on Monday, Jan. 6, led by a surge in semiconductor stocks as the first full week of the new year began.
- Teradyne shares pushed higher as Northland Securities analysts highlighted upside potential for the company's electronic testing equipment.
- Shares of Palantir Technologies, the S&P 500's top-performing stock in 2024, sank as analysts from Morgan Stanley cited valuation concerns.
At the start of the first complete week of 2025 in the United States, the major equities indexes showed mixed results. Thursday will see a trading holiday to remember former U.S. Presidency Jimmy Carter. On Friday, the jobs report for December is due.
The S&P 500 added 0.6%, while upbeat indications of semiconductor demand helped lift the tech-heavy Nasdaq 1.2%. After trading in positive territory for most of the day, the Dow lost steam in the afternoon to end Monday's session with a minor downtick of less than 0.1%.
Foxconn is a Taiwan-based company that has posted record sales for the last quarter. They attributed this to a high demand for AI (artificial intelligence) servers. Shares of the entire semiconductor industry rose, including Nvidia shares (NVDA), a Foxconn client and AI chip giant. Their shares increased by 3.4%. Shares of memory solutions specialist Micron Technology (MU), whose tech is incorporated in Nvidia’s next-generation Blackwell AI platforms, surged 10.5%, notching Monday’s strongest performance in the S&P 500.
The wave of AI server enthusiasm has also benefited other companies. Following positive comments from Lynx Equity, shares of Super Micro Computer (SMCI), a maker of servers, soared by 9.4%. Analysts anticipate that Nvidia will include an update in today’s keynote address at the CES Conference on its newest version of Blackwell AI chips. This could be a catalyst to Supermicro given Nvidia GPUs’ key role in Supermicro’s advanced servers.
Northland Securities has upgraded Teradyne shares (TER) to a Buy rating. Shares have risen 7.2% since the upgrade. “outperform” It also raised its price target. Analysts think Teradyne will gain market share as cloud computing firms use its testing platform for designing application-specific integrated Circuits (ASICs). Northland said that the ongoing transitions within the semiconductor industry may boost Teradyne tester demand.
Axon Enterprise (AXON) shares fell the most of any S&P 500 stock on Monday, tumbling 5.1% to their lowest level since the manufacturer of the Taser and other law enforcement equipment posted stronger-than-expected quarterly sales and profits in early November. Axon’s stock value has increased by more than twofold in the last 12 months, thanks to the enthusiasm of police departments for Axon’s AI solutions.
Morgan Stanley re-instated coverage for the company with a positive rating. “underweight” rating. Although analysts recognized Palantir’s strong trajectory, they suggested the company’s success is more than priced into the current valuation after the stock skyrocketed in 2024, making it last year’s top S&P 500 performer.
Essex Property Trust shares fell 4% after Mizuho analysts lowered their price target for the real estate trust (REIT). Essex Property Trust (ESS) faces challenges related to changing employment dynamics and rental dynamics, particularly in the tech-dominated Northern California areas.
T-Mobile US’s (TMUS) stock fell 3.1% as Wells Fargo downgraded its wireless operator and lowered the price targets. Analysts expressed concerns over T-Mobile’s value and the potential for a slowdown in 2025 growth due to a decrease in wholesale revenues.
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