Happy Friday 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 rose today as Wall Street aimed to recover from a volatile start to the year. Tech stocks outperformed on the final day of the week.

• 📈 | One Notable Gainer: Rivian shares surged 24% as 2024 production and deliveries met guidance, despite a lowered target in October.

• 📉 | One Notable Decliner: U.S. Steel shares dropped 7% after President Biden blocked Nippon Steel's $14.9B takeover, citing supply chain risks.

Plus, in a parched world, Cadiz is turning water into the ultimate liquid asset. Click here to learn more.

Sponsored by Cadiz

How To Weather the Uncertain Climate

Nothing is certain about today’s climate — economically, politically, and literally. Inflation appears persistent, the US presidential administration is turning over, and extreme weather events are growing in frequency and scale.

But one company appears poised to weather whatever uncertainty 2025 throws at it.

Cadiz, Inc. (NASDAQ: CDZI) is developing the Southwest’s largest water pipeline, tapping into 45,000 acres of land and 2.5 million acre-feet of water supply to provide much-needed clean water across the region.

The AI boom has been driving the market rally for a couple of years now. But it may just be a matter of time before those gains dry up. Savvy investors might be wise to start looking for alternative sources of hydration now.

Well, look no further.

MARKET MOVERS

Block, Chewy, Constellation Energy

SQ (+6.2%) Block stock climbs after upgrade to Outperform at Raymond James (Seeking Alpha)

CHWY (+6.1%) Chewy stock rating upgraded at Wolfe Research, named top pick (Investing.com)

CEG (+4%) Constellation Energy: Stock Climbs on Billion-Dollar Contract (MarketBeat)

CVNA (-11.2%) JPMorgan Sticks With Outperform Call on Carvana Despite Short-Seller Report (Investopedia)

VST (+8.5%) Vistra Shares Gap Up After Analyst Upgrade (MarketBeat)

OVERHEARD ON THE STREET

CNBC: Microsoft plans to spend $80B on AI data centers in fiscal 2025, with over half of the investment focused in the U.S.

Fast Company: Instagram removed AI profiles by Meta after user complaints about being unable to block them, highlighting AI's growing presence online.

Reuters: The US fined JetBlue $2M for operating chronically delayed flights, with $1M compensating affected passengers over the next year.

Forbes: Apple agreed to a $95M settlement over claims Siri recorded users' private conversations without consent, pending court approval.

CNN: Boeing outlined safety improvements, including culture shifts, training, and defect elimination, following incidents like a 737 Max door plug failure.

TOMORROW’S TRADE IDEA, TODAY

Citi’s 2025 REIT Cheat Sheet

Turning a Corner?

Real estate investment trusts (REITs) had a lackluster 2024, delivering just a 4.9% return—dwarfed by the S&P 500’s 23% climb. High interest rates have been a key culprit, making financing real estate acquisitions more expensive. However, the tide may be turning. 

With rates easing and the economy showing resilience, analysts, including those at Citigroup (C), predict REITs could return 10% to 15% in 2025. For context, Citi is predicting the S&P 500 will advance by only 8% this year.

Not All REITs Are Created Equal

Not all REITs are created equal, and choosing the right subsector is critical. Office REITs remain under pressure, as remote work trends continue to challenge the sector. By contrast, residential and healthcare REITs are poised to benefit from strong demographic tailwinds. 

Millennials are fueling demand for first-time home purchases, while baby boomers are driving growth in retirement communities and medical facilities. These trends could position residential and healthcare REITs as top performers in the coming year.

Citi’s Picks

Citi highlights five REITs with strong growth potential:

• American Homes 4 Rent (AMH): Single-family homes

• Sun Communities (SUI): Manufactured homes

• Omega Healthcare Investors (OHI): Healthcare properties

• Ventas (VTR): Healthcare properties

• EastGroup Properties (EGP): Industrial real estate

With a predicted 4% dividend yield and improving earnings, REITs could be a cornerstone of a winning 2025 portfolio.

Sponsored by Cadiz

No Protests for This Pipeline

The word “pipeline” might trigger unpleasant flashbacks to controversial projects like the Keystone XL Pipeline.

But indigenous people aren’t protesting Cadiz. They’re investing.

Cadiz is building the Southwest's largest water pipeline. It aims to leverage its 45,000 acres of land in California and 2.5 million acre-feet of water supply to increase clean water access where it is needed the most.

And the Lytton Band of Pomo Indians signed a Letter of Intent to invest up to $50 million in the Cadiz’s groundwater banking project in the Mojave Desert. That would be the first major investment by a Native American Tribe in large-scale water infrastructure off tribal lands in US history.

Oh, and did we mention Cadiz plans to repurpose 180 miles of pipeline assets from the failed Keystone project? Ah, the irony.

ON OUR RADAR

CNBC: The U.S. Surgeon General urged cancer risk warnings on alcohol labels, linking alcohol to seven cancers and ranking it a top preventable cause. Shares of alcohol stocks fell on the news.

CNN: Biden plans to ban future offshore drilling in parts of the Atlantic and Pacific, using a law Trump would struggle to reverse.

CNBC: Trump criticized Britain’s Labour government for raising the North Sea windfall tax to 38%, calling it a "very big mistake."

Axios: The "Amazon effect" is hitting pharmacies like CVS and Walgreens by disrupting their retail sales model, not just medicine revenues.

CNN: Cruise ships saw the worst year for gastrointestinal outbreaks in over a decade in 2024, CDC data reveals.

THURSDAY’S POLL RESULTS

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

🟨🟨🟨🟨⬜️⬜️ AT&T (T)

🟩🟩🟩🟩🟩🟩 Boston Scientific (BSX)

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