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 rose sharply today as the Q4 earnings season kicked off and December’s consumer inflation print showed signs of softening.

• 📈 | One Notable Gainer: Bank of New York Mellon (BNY) shares climbed 8%, pacing a pack of surging big bank stocks after the first batch of fourth-quarter earnings came in strong.

• 📉 | One Notable Decliner: Lululemon’s (LULU) stock fell another 3%, bringing it more than 7% below its intraday high on Monday, when it posted strong holiday sales — on the back of many clearance sales.

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MARKET MOVERS

JPMorgan, Wells Fargo, Goldman Sachs

JPM (+2%) / WFC (+6.7%) / GS (+6%) JPMorgan Chase, Wells Fargo and Goldman Sachs Report Big Profits (NYT)

C (+6.5%) Citi cuts return targets to spend more on regulatory fixes, plans $20 billion in buybacks (Reuters)

IONQ (+33.5%) / RGTI (+22.2%) / QBTS (+22.4%) The crazy ride in quantum computing stocks continues as shares rip higher on Microsoft’s ‘quantum-ready’ directive (CNBC)

CVGW (-6.8%) Calavo Growers, Inc. Announces Fourth Quarter and Fiscal Year 2024 Financial Results (GlobeNewswire)

BLK (+5.2%) BlackRock CEO Succession Outlook Shifts Amid Exits, Buying Spree (Bloomberg)

OVERHEARD ON THE STREET

NBC: Israel and Hamas have reached a deal for a Gaza ceasefire and hostage release, ending 15 months of fighting.

Reuters: In December, US consumer prices rose the most in nine months, driven by higher energy costs.

Bloomberg: However, core CPI (excluding more volatile food and energy costs) rose just 0.2%, below expectations, boosting bets for a quicker Fed rate cut.

BI: The Los Angeles wildfires could cause $250 to $275B in damages, leaving governments, insurers, and residents with long-term financial burdens.

Barron’s: Venture Global, a liquefied natural gas exporter, is planning an IPO valued at $110B. It could get a boost from President-elect Donald Trump.

TOMORROW’S TRADE IDEA, TODAY

NVIDIA May Be Slowing Down. Is Every Chipmaker?

Looking Elsewhere

It’s hard not to be bullish on a stock that’s had a run like NVIDIA’s (NVDA). Indeed, analysts are still mostly bullish on the AI powerhouse.

But it’s also hard to imagine NVIDIA posting yet another year of triple-digit gains — especially with expectations so high that anything less than a knock-out punch now looks like a loss in investors’ eyes.

So many analysts are looking to other stocks within the surging semiconductor industry that they believe could deliver better returns in 2025. Here are a couple of the names getting tossed around.

Broadcom

According to Blue Whale Growth Fund manager Stephen Yiu, Broadcom (AVGO) is likely to outperform NVIDIA this year as tech companies look to reduce their reliance on a single supplier.

Companies like Microsoft (MSFT) and Google (GOOGL) are already starting to develop their own custom AI chips. Supplying custom chips is a core tenant of Broadcom’s business.

Yiu’s not the only one predicting broad gains for Broadcom. Jefferies analyst Blayne Curtis named the chipmaker a top pick, thanks to its growing customer base. He also believes that increased demand for custom silicon will serve as a strong tailwind. 

Curtis has a hit rate of nearly 2 in 3, according to TipRanks, with an average return of almost 25%.

AMD

Broadcom’s a proven commodity. Its stock has risen more than 100% in the past 12 months. For investors who prefer a bargain, Loop Capital points to AMD (AMD).

AMD, another major player in custom chipmaking, has not had a great year. The stock is down nearly 20% over the past 12 months.

But Loop Capital’s Gary Mobley believes that leaves it poised for a rally. The analyst is confident that AMD will be able to increase its market share in the desktop and server markets, especially given the well-document struggles of key rival Intel (INTC). 

Mobley initiated coverage of AMD at a Buy rating with a $175 price target, suggesting around 46% upside from today’s close. 

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ON OUR RADAR

CNN: Many cars track drivers’ whereabouts, speed, and even appearance. Some automakers sell this data to insurance companies, who use it to adjust rates.

AP: Germany's economy contracted for the second straight year in 2024, solidifying its position as Europe's worst-performing major economy.

CNBC: Saudi Arabia announced a $100B mineral investment project, with $20B already in progress, as it aims to rapidly expand its mining sector.

WSJ: Costco is resisting calls to backtrack on its DEI initiatives, urging shareholders to reject a proposal to assess DEI’s impact on its stock price.

NPR: South Korea's impeached President Yoon Suk Yeol was detained for questioning on insurrection charges, following his recent martial law decree.

TUESDAY’S POLL RESULTS

Are you bullish or bearish on RH (RH) over the next 12 months?

🟩🟩🟩🟩🟩🟩 🐂 Bullish

🟨🟨⬜⬜⬜⬜ 🐻 Bearish

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