Breakfast | Apple and Tesla lead, all seven tech giants decline! TSMC once again proves AI demand, boosting chip stocks

Overnight Market Overview

U.S. stocks opened high but fell back, initially boosted by positive earnings reports from bank stocks, but after several fluctuations during the day, they all ended lower, with the Nasdaq down 0.9%, the largest decline. Large tech stocks fell across the board, while small-cap stocks, chip stocks, and Chinese concept indices rose against the trend, with chip stocks boosted by TSMC's performance in the U.S. market, and most quantum computing concept stocks also closed higher.

The "seven sisters" of tech stocks all fell, with Apple down 4.04%, Tesla down 3.36%, Nvidia down 1.92%, Google A down 1.35%, Amazon down 1.2%, Meta Platforms down 0.94%, and Microsoft down 0.41%.

Most quantum computing concept stocks closed higher. Quantum Corporation (QMCO) rose 15.13%, IonQ (IONQ) rose 5.48%, Kingsoft Cloud ADR rose 3.44%, Rigetti Computing (RGTI) rose 2.74%, but the Chinese concept stock MicroVision Hologram ADR fell 10.57%.

The Chinese concept index rose against the trend. The Nasdaq Golden Dragon China Index closed up 0.22%, at 6566.64 points. Among popular Chinese concept stocks, Douyu rose over 27%, XPeng and GDS Holdings rose over 6%, while NetEase fell over 4%.

TSMC ADR closed up 3.86%, at one point rising over 7% during the day, following better-than-expected earnings.

Today's Key Focus

At 10:00 AM Hong Kong time, China will announce its fourth-quarter GDP, December industrial added value above designated size, retail sales of consumer goods, urban fixed asset investment, national real estate development investment, and urban surveyed unemployment rate.

TSMC Q4 Net Profit Increased by 57% Year-on-Year, Exceeding Expectations, Gross Margin Rises to 59%, AI Demand Reconfirmed

TSMC's Q4 net profit reached NT$374.7 billion (approximately USD 11.4 billion), exceeding market expectations of NT$369.8 billion. Revenue reached NT$868.46 billion, a year-on-year increase of 39%. The strong performance reflects investors' continued optimism about the growing demand for AI hardware, and this trend is expected to continue until 2025.

Jensen Huang: CoWoS Capacity Has Not Decreased, Expected to Increase Significantly This Year

Nvidia CEO Jensen Huang stated that the capacity of Nvidia's Blackwell platform CoWoS-L has increased, so there is no issue of reduced CoWoS capacity, and it is expected that the overall CoWoS capacity can continue to increase significantly this year. Additionally, in response to market concerns about the cooling of the GB200 server, Huang pointed out that the cooling technology of the Blackwell platform is relatively complex, but the Blackwell system has already begun full-scale production, and the initial challenges faced are normal compared to the complexity of the system. The Blackwell system has begun sales to global customers.

Goldman Sachs Explains Tesla FSD: Expects Robotaxi to Start Operations in H2 2026, Revenue of Approximately USD 115 Million in 2027

Goldman Sachs pointed out that the performance of Tesla's latest V13 version FSD system has significantly improved, able to operate without human intervention in 97% of driving scenarios, with key intervention distances reaching 400-450 miles. However, this achievement still has a considerable gap from true "autonomous driving."

Microsoft adds Copilot to Office App, first price increase for Microsoft 365 in twelve years

The subscription price for Microsoft 365 Personal has increased by about 43%, rising to $9.99 per month and $99.99 per year, while the price for Microsoft 365 Family has increased by 30%, rising to $12.99 per month and $129.99 per year. The price increase takes effect immediately for new users and does not apply to existing users, but will increase upon renewal.

Apple's iPhone shipments in China decline by 25% in Q4, shares tied for first with Huawei

In Q4 2024, Apple held a 17% market share in China, shipping 13.1 million iPhones. Huawei's shipments grew by 24% to 12.9 million units, also reaching a 17% market share, tying with Apple for first place.

Bank stocks' earnings reports exceed expectations again

Bank of America’s Q4 net profit doubled, with investment banking revenue reaching a three-year high. Morgan Stanley’s Q4 net profit also doubled, with annual revenue hitting a record high and stock trading income significantly exceeding expectations. Analysts believe that trading activity will be more active in 2025 and will benefit from President Trump's promised pro-business policies. Bank of America’s stock fell nearly 1%, while Morgan Stanley’s stock rose over 4%.

Sources say Biden administration will not enforce TikTok ban, leaving it to Trump to handle

On January 16, local time, ABC News cited informed government officials stating that the Biden administration will not enforce the planned TikTok ban set to take effect on January 19, and the matter will be left to the incoming Trump administration. The official stated in a release that TikTok should continue to operate under U.S. ownership, but given the timing of the ban coinciding with the day before Biden's departure, it will be handled by the next administration.

Federal Reserve Governor Waller: Does not rule out the possibility of rate cuts in March, may cut rates 3-4 times this year if data supports

Federal Reserve Governor Waller stated that yesterday's U.S. CPI data was very good, and if more such data continues to come in, we may see the Fed cut rates in the first half of this year, with March cuts not ruled out. If significant progress is made in the data, there could be three or four rate cuts this year. Following Waller's remarks, traders raised their expectations for Fed rate cuts, leading to a rapid decline in U.S. Treasury yields and a slight increase in U.S. stocks.

U.S. Treasury Secretary nominee Basant: Not extending tax cuts would lead to "economic disaster," supports increasing sanctions on Russia, Trump policies will not raise inflation

During the Senate hearing confirming his nomination, Basant stated that it is essential to ensure the safety of the U.S. supply chain, carefully deploy sanctions, and maintain the dollar's status as the global reserve currency; extending the tax cuts from the Trump administration in 2017 is the most important economic issue; U.S. fiscal spending is out of control, and the Trump administration did not plan to reduce Social Security and Medicare spending; carbon tariffs may be included in the tariff plan; the Trump administration may increase sanctions on Russia, especially oil giants; inflation "is still far above target," and Trump’s policies would bring inflation closer to 2%; the Fed should be independent; there is no reason for the U.S. to have a central bank digital currency; willing to work with Trump and lawmakers to eliminate the debt ceiling, will not allow U.S. debt default; AI helps to address tax evasion issues.

U.S. December retail sales fell short of expectations month-on-month, with building materials and food services dragging down, but auto sales remained strong

Sales in the control group, which excludes food services, auto dealers, building material stores, and gas stations (used by the government to calculate consumer spending for GDP), increased by 0.7% in December, the highest in three months. Analysts believe this figure exceeds expectations and is a positive signal for the consumer sector, indicating that consumers are still increasing spending (mainly to cover rising prices of goods due to inflation).

U.S. January Philadelphia Fed Manufacturing Index at 44.3, reaching a new high since April 2021, far exceeding the expected -5

The previous value for December was revised from -16.4 to -10.9, marking the largest monthly increase since June 2020, when factories began reopening after the COVID-19 shutdown. The latest data suggests that the long-term slump in the U.S. manufacturing sector may be coming to an end