Happy Wednesday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

• 🟨 | US stocks were mixed today as yet another key inflation print came in hotter-than-expected. Of the three major indexes, only the Nasdaq Composite eked out a gain.

• 📈 | One Notable Gainer: CVS (CVS) shares soared 15% after delivering an earnings beat in its first quarter under new CEO David Joyner.

• 📉 | One Notable Decliner: Stock in Biogen (BIIB) slumped more than 4% despite its own earnings beat, as the biotech giant slashed its R&D pipeline in favor of more M&A.

Sponsored by Cadiz

The Ground Floor’s Getting Crowded — But There’s Still Room For More

Barclays PLC upped its holdings in Cadiz, Inc. (NASDAQ: CDZI) by more than 300% in the third quarter.

It wasn’t the only one. At last check, B. Riley Financial, Equitec Proprietary Markets, HCR Wealth Advisors, and GAM Holding AG all grew their stake in the same company by double- to triple-digit percentages.

Curious why? You should be. Cadiz has several developments in the pipeline that point to a potential breakout on the horizon. It’s not hard to see why major investors are crowding into the ground floor — but there’s still room for more.

MARKET MOVERS

Grail, Kraft Heinz, Baidu

GRAL (+18.4%) GRAIL joins Quest to widen access to multi-cancer detection test (SeekingAlpha)

KHC (-3.3%) Berkshire Is Losing Money on Its $9 Billion Kraft Heinz Stake. Impairment Is Possible. (Barron’s)

BIDU (+4.4%) Chinese tech giant Baidu to release next-generation AI model this year as DeepSeek shakes up market (CNBC)

WAB (-8.9%) Wabtec Reports Sales Below Analyst Estimates In Q4 Earnings, Stock Drops (YF)

GILD (+7.5%) Gilead Sciences: Strong Q4 Results And Huge Progress In HIV (SeekingAlpha)

OVERHEARD ON THE STREET

CNN: US inflation hit 3% in January, its highest rate since June, as consumer prices rose 0.5% from December, the fastest pace since August 2023.

CNBC: The NYSE is launching NYSE Texas after TXSE Group filed to register the Texas Stock Exchange with the SEC.

WSJ: US crude oil stockpiles rose for the third straight week, increasing by 4.1M barrels, while gasoline stocks declined for the first time in three months.

Reuters: Chevron will lay off 15% to 20% of its global workforce by the end of 2026 to reduce costs and streamline its business.

AP: Fed Chair Jerome Powell stated that President Trump's calls for lower interest rates will not influence the Fed's decisions.

TOMORROW’S TRADE IDEA, TODAY

Arm Holdings Is Staying in the Loop

ARM and a Leg

After surging more than 23% since the start of 2025, Arm Holdings (ARM) costs an arm and a leg. But according to Loop Capital, the high price could still be worth it.

The UK-based chipmaker’s recent earnings exceeded expectations on both the top and bottom lines. But Arm’s shares still slumped on narrowed guidance, and remain down around 10% over the past five days.

Loop’s Ananda Baruah believes that this might be the best buying opportunity investors are going to get.

Big Plans for 2025

The analyst lifted his price target to $195 and reiterated his Buy rating. The new price target represents more than 25% in potential upside from today’s close.

Baruah believes that AI is driving demand for Arm’s computing systems. The company recently announced several deals planned for the middle of this year, all AI- and compute-subsystems-centric. 

Wall Street Says Buy

The analyst’s forecast wasn’t without warnings. He pointed out several potential risks to investing in Arm, including geopolitics, customer consumption, and an ongoing lawsuit with Qualcomm (QCOM).

However, the majority of analysts believe the pros outweigh the cons. According to LSEG data, 22 of 38 analysts covering the stock have given it either a Buy or Strong Buy rating.

Of the remaining 16 analysts, just 3 say to Sell.

Sponsored by Cadiz

A Groundbreaking Partnership

This year, Cadiz, Inc. (NASDAQ: CDZI) is set to break ground on the Southwest’s largest water pipeline. The Mojave Groundwater Bank will send affordable, reliable, and clean water to much of the region, including historically underserved communities.

Cadiz made news in November when it purchased 180 miles of steel pipe from the failed Keystone XL project. And investors’ heads turned again shortly thereafter when the Lytton Rancheria tribe announced it would invest $50 million in the project.

It’s a groundbreaking partnership (see what we did there?) that marks the first major investment by a Native American tribe in large-scale water infrastructure off tribal lands.

ON OUR RADAR

WSJ: President Trump called Vladimir Putin, and they agreed to initiate talks to end the war in Ukraine.

CNN: Bankrupt fabrics retailer Joann will close 500 of its 800 stores as it streamlines operations during the bankruptcy process.

BI: The journal dove deep into Mr. Beast’s ascension to TV stardom — and lessons Hollywood can learn from his rise.

CNBC: ESPN host Stephen A. Smith expressed interest in running for US president, saying he'd excel in a presidential debate

AP: Tesla has used an aggressive legal strategy in China, successfully suing customers and journalists to silence critics.

TUESDAY’S POLL RESULTS

Which stock do you think will outperform over the next 12 months?

🟨⬜⬜⬜⬜⬜ Commercial Metals (CMC)

🟨🟨🟨🟨🟨⬜ Cleveland-Cliffs (CLF)

🟩🟩🟩🟩🟩🟩 Nucor (NUE)

🟨🟨⬜⬜⬜⬜ Steel Dynamics (STLD)

And, in response, you said:

• Nucor (NUE) — “Because of size, growth, history, earnings, dividend, beta, the better PEG, and the biggest name brand. Chaaa ching!”

• Steel Dynamics (STLD) — “Not an iffy outcome like the others. If I’m wrong, it’ll be Cleveland-Cliffs.”

Last Words From Our Sponsors

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