TheDrop Market Analysis, 01/22/24

Markets rose sharply following very important news of a government-funded AI initiative.

The S&P 500 rose 0.6%, the Dow by 0.3%, and the Nasdaq by 1.3%. Following an announcement by President Trump of a substantial $500 billion AI initiative labeled "Stargate," tech stocks in particular set off, many making all-time highs in just one day alone. The president has formed an alliance with OpenAI, Oracle, and others, which set investors off to buy shares en masse.

Some of the biggest beneficiaries of Stargate, like Arm Holdings, Oracle, Palantir, Microsoft, and others all witnessed >2% increases in share price, with Arm leading the way with a massive 15.9% surge. Other stocks like Intel and Apple, who may also be impacted by Stargate, rose less substantially but still by respectable margins.

Trump Media set a second day in a row in the red as enthusiasm from investors dwindles post-inauguration. Tesla, Soundhound, and Target all declined despite their peers surging, possibly due to their overvalued market caps or controversy holding them back (like Elon Musk's Nazi salute for Tesla).

Soundhound in particular has attracted investor attention for being a possible short option, as the company's dramatic rise to success in the stock market seemed to come to an end today. Rigetti, another small volatile stock, also ended its winning streak from last week. This could mean a weakness for smaller tech stocks but a boom for larger, more well-established ones.