Wolfe lifts Nvidia target by $25 on rack-scale growth

Investing.com -- London’s FTSE 100 edged higher on Friday as markets weighed U.S. President Donald Trump’s pick of Kevin Warsh to lead the Federal Reserve, with European shares advancing and the pound slipping below $1.38.

As of 1403 GMT, the blue-chip index rose 0.3%% and the British GBP/USD fell 0.4% against the dollar to 1.3752.

DAX index in Germany gained 0.8%, the CAC 40 in France rose 0.6%.

UK round up

AstraZeneca PLC (ST:AZN) will pay Chinese drugmaker CSPC Pharmaceutical Group up to $18.5 billion in a licensing deal for experimental obesity and weight-related drugs, CSPC announced Friday.

The agreement includes an upfront payment of $1.2 billion, with potential additional payments of up to $17.3 billion if certain milestones are met. This deal expands on existing collaboration between the companies in areas including artificial intelligence.

In other market news, Airtel Africa Plc (LAGOS:AIRTELAFRI) shares fell approximately 6%, reversing early gains despite reporting strong third-quarter results. The telecommunications company posted a 31.0% increase in EBITDA to $836 million in constant currency terms, with margins expanding to 49.6%, up 278 basis points year-over-year. The results were driven by strong revenue growth in Nigeria and mobile money services.

Meanwhile, Antofagasta PLC (LON:ANTO) shares dropped more than 4.8% following a downgrade by UBS from "buy" to "neutral." UBS cited limited near-term growth momentum after the Chilean copper miner’s shares surged approximately 135% over the past 12 months on a total shareholder return basis in U.S. dollars, outperforming copper prices by roughly 90% and the COPX index by about 40%.

In the financial sector, Schroders PLC (LON:SDR) has held high-level discussions about potential partnerships to boost growth in its private capital business, according to Reuters. The British asset manager reportedly explored deals for Schroders Capital with French investment firm Wendel and London-listed Bridgepoint Group. These previously undisclosed talks, which took place several months ago, have since been paused for reasons that remain unclear.

Regarding monetary policy, Deutsche Bank expects the Bank of England to keep its Bank Rate at 3.75% in its February decision. The German bank forecasts a 7-2 vote split, with external Monetary Policy Committee members Alan Taylor and Swati Dhingra likely to favor a rate cut. Deutsche Bank analysts pointed to signs of economic resilience in the UK despite a fragile labor market, where unemployment has reached 5.1% in the three months to October.

Investing.com -- Wolfe Research upgraded Broadcom Inc (NASDAQ:AVGO) to Outperform, with price target of $400 on growing confidence in the scale and competitiveness of Google’s tensor processing unit program and Broadcom’s position as a key beneficiary.

The firm said its channel checks suggest TPU shipments could reach about 7 million units annually by calendar 2028, a level that Wolfe said it can no longer ignore.

Google’s move to make TPUs available to third parties is creating a credible alternative to Nvidia’s GPUs, with Broadcom expected to capture much of the associated custom silicon demand.

Wolfe raised its calendar 2027 estimates to $154.5 billion in revenue and $16 in earnings per share, reflecting higher assumed TPU volumes and stronger AI-related contributions.

It said additional upside is possible from other custom accelerator programs not fully reflected in its forecasts, including projects linked to Meta and OpenAI.

For calendar 2026, Wolfe revised its AI ASIC revenue estimate to about $44 billion, based on roughly 3.3 million TPU shipments. It lifted its calendar 2027 AI revenue estimate to $78.4 billion, assuming around 5.1 million units.

The firm expects TPUs to drive the majority of Broadcom’s XPU growth, with other programs accounting for 17% of XPU revenue in 2026 and 14% in 2027.

Wolfe also modeled networking revenue of $15.1 billion in 2026, up about 75% year on year, and expects AI networking revenue to grow about 55% in 2027. It left estimates for non-AI semiconductors and infrastructure software unchanged.

Wolfe said its $400 target reflects about 22 times a bull-case earnings scenario of $18 per share in 2027, which assumes Broadcom can double AI revenue again that year.

The multiple sits below the stock’s roughly 25 times average over the past three years, covering the AI spending cycle.

Investing.com -- Citi upgraded Spotify to Buy in a note Friday, arguing it now sees “lots of reasons to like” the music-streaming platform’s stock, including attractive valuation, beatable estimates, and a series of upcoming catalysts. 

Analyst Jason Bazinet said Citi is maintaining its $650 target price on SPOT, which reflects “28x 2027 FCF per share.”

Citi told clients it sees Spotify’s revenue and profitability running ahead of Wall Street expectations, saying its revenue forecast is “1% to 2% above consensus,” driven largely by Premium average revenue per user that is “2% above sell-side estimates.” 

The bank added that its adjusted EBITDA projection is approximately 3% higher than the Street, supported by stronger revenue and gross margin expectations that are around 1% above the consensus.

On potential catalysts, Citi highlighted several developments that could boost sentiment. 

These include “more price hikes in the EU,” possible pricing increases from rival digital service providers, which would “lower the risk of share loss at Spotify,” and the prospect of “accelerating buybacks,” supported by robust free cash flow and a strong balance sheet.

Citi also argued Spotify’s valuation is compelling. At current levels, the firm estimates the stock trades at “just 21x 2027 FCF per share,” excluding cash and investments.

The bank cautioned on two risks, including the possibility that Spotify deploys its cash to acquire an AI-music startup, an outcome investors may view less favorably than buybacks, and the chance that rivals avoid raising prices, which could spur concerns about market share and long-term margin pressure.

Investing.com -- U.S. stock futures slipped lower Friday, but pared earlier losses as investors digested U.S. President Donald Trump’s nomination of Kevin Warsh to be the next head of the Federal Reserve as well as a series of quarterly earnings.

Here are some of the biggest premarket U.S. stock movers today:

• Apple (NASDAQ:AAPL) stock traded largely unchanged as investors parsed through the tech giant’s best quarterly iPhone sales growth performance in over four years, as well as less impressive news in wearables and accessories, including things like the Apple Watch and AirPods, which fell by roughly 3%. Sales of Mac computers were also down by just over 7%.

• Verizon (NYSE:VZ) stock gained 2.2% after the telecoms giant reported fourth-quarter earnings and revenue that exceeded expectations, while providing an upbeat outlook for 2026 that signals the beginning of a strategic turnaround. 

• Exxon Mobil (NYSE:XOM) stock dropped 0.9% after the oil major reported better-than-expected earnings and revenue for the fourth quarter, but weak oil prices weighed.

• Aon (NYSE:AON) stock gained 1.1% despite the insurance broker reporting a jump in fourth-quarter adjusted profit on the back of robust demand for its risk management offerings.

• Chevron (NYSE:CVX) stock gained 0.4% after its oil major’s fourth-quarter profits fell but came in ahead of estimates as it focused on cutting costs and making its operations more efficient to contend with lower crude prices throughout 2025.

• Regeneron (NASDAQ:REGN) stock dropped 2.6% after the U.S. drugmaker’s fourth-quarter earnings fell, even though it was helped by strong demand for its eczema treatment, Dupixent. 

• Visa (NYSE:V) stock fell 0.8% despite the credit card giant beating first-quarter earnings and revenue expectations, as some investors reacted to a shortfall in total transactions processed and persistent caution around broader consumer spending trends.

• SanDisk (NASDAQ:SNDK) stock soared 24% after the storage-chip maker delivered a significant profit beat and raised guidance, as demand for data-center and AI-related memory products outpaced forecasts.

• American Express (NYSE:AXP) stock fell 2.5% as higher costs weighed on the payment company’s quarterly profit. However, it still plans to boost its dividend 16%, helped by resilient spending by the credit card giant’s largely affluent customer base amid broader economic uncertainty.

Investing.com -- U.S. stock index futures fell Friday, but cut into their losses on the news that President Donald Trump has nominated Kevin Warsh to be the next Federal Reserve chairman. 

At 07:55 ET (12:55 GMT), Dow Jones Futures fell 245 points, or 0.5%, S&P 500 Futures dropped 35 points, or 0.5%, and Nasdaq 100 Futures slipped 160 points, or 0.6%.

The main Wall Street indices closed mixed Thursday, with the S&P 500 and the tech-heavy NASDAQ Composite declining, weighed by losses from tech giant Microsoft (NASDAQ:MSFT) after its earnings. The Dow Jones Industrial Average rose marginally.

Week to date, the S&P 500 and Nasdaq have each added nearly 0.8%, while the DJIA is down nearly 0.1% on the week.

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Warsh nominated for Fed chair role

Trump has nominated former Fed governor Kevin Warsh for the role of chairman of the Federal Reserve, potentially starting in May when the role is vacated by current chair, Jerome Powell.

In his post on Truth Social announcing Warsh’s nomination, Trump outlined the reasons why Warsh’s past experience will equip him to be a "GREAT" chairman.

"He has conducted extensive research in the field of Economics and Finance," Trump wrote, crediting Warsh for issuing an independent report to the Bank of England "proposing reforms in the conduct of Monetary Policy in the United Kingdom".

He also noted Warsh’s previous tenure in the Federal Reserve, last time as a member of the Fed’s board of governors between 2006 and 2011. 

Warsh -- who had lost out to current Chair Jerome Powell for the post in 2017 -- has largely aligned himself with Trump’s calls for lower rates in the past year, but was a long-time critic of the ultra-loose monetary policy pursued by the Fed since the financial crisis, including the central bank’s expanded balance sheet.

"Warsh was one of the top 4 finalists for weeks, but he wasn’t the market’s first choice given his very hawkish views on QE," said analysts at Vital Knowledge, in a note, "and past comments about effecting a “regime change” at the Fed." 

This nomination is set to clear out a major point of uncertainty for Wall Street, as investors fret over the long-term trajectory of lending rates in the country.

But Warsh’s potential nomination also comes amid heightened concerns over the Fed’s independence, especially amid growing calls from the White House that the central bank cut rates aggressively. 

Additionally, Trump publicly endorsed a bipartisan spending deal negotiated by Senate Republicans and Democrats that would avert a looming government shutdown, posting support on Truth Social and urging cooperation.

The compromise would fund most federal agencies while leaving contentious immigration issues for further negotiation.

Reports said Democrat and Republican leaders had also agreed to the deal, although it remained unclear when Congress will vote on the matter. Lawmakers have until midnight, Friday, to release more spending for the federal government. 

Apple’s iPhone sales beat expectations

In the corporate sector, there are more earnings from the likes of Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), American Express (NYSE:AXP), Verizon (NYSE:VZ), Regeneron Pharmaceuticals (F:REGN) and Aon (NYSE:AON) due later in the session.

After the close Thursday, Apple (NASDAQ:AAPL) comfortably beat profit and revenue expectations for the holiday quarter, its fiscal first quarter, enjoying its best quarterly iPhone sales growth performance in over four years.

iPhone sales jumped 23.3% year-on-year to $85.27 billion, marking the biggest increase since the fourth quarter of 2021.

The tech giant also forecast higher-than-expected revenue growth of up to 16% for the March quarter, powered by strong demand for its iPhones and a sharp rebound in China and accelerating demand in India.

Still, Apple’s shares slipped around 1% lower in premarket trade, as sales in other parts of the company were less positive.

Wearables and accessories, which include things like the Apple Watch and AirPods, fell by roughly 3%. Sales of Mac computers were down by just over 7%.

Elsewhere, SanDisk (NASDAQ:SNDK) shares surged premarket after the storage-chip maker delivered a significant profit beat and raised guidance, as demand for data-center and AI-related memory products outpaced forecasts.

Credit cad giant Visa (NYSE:V) beat first-quarter earnings and revenue expectations, as some investors reacted to a shortfall in total transactions processed and persistent caution around broader consumer spending trends.

Gold, crude slip lower

Gold prices fell sharply Friday, retreating from record levels following the news that President Trump is set to announce his nominee for the next Federal Reserve Chair later in the day.

Warsh, the new favorite for the role, is seen as less dovish than other potential candidates, and this resulted in the U.S. dollar bouncing, to the detriment of commodities denominated in the greenback. 

Spot gold slid 4.6% to $5,126.37 an ounce, after earlier briefly dropping below $5,000/oz, while gold futures for April fell 3.8% to $5,150.80/oz.  

That said, prices have risen more than 20% so far in January, heading for a sixth straight monthly gain and the largest monthly advance since 1982.

Other precious metals also cooled on Friday after logging wild swings this week. Spot silver slid 7.3% to $106.073/oz, tumbling from a Thursday record high, while spot platinum slid 8.5% to $2,394.98/oz. 

Oil prices also retreated after a three-day rally, but were still on track for hefty weekly gains as traders focused on potential U.S. military action against Iran. 

Brent futures slipped 0.3% to $69.36 a barrel, and U.S. West Texas Intermediate crude futures fell 0.2% to $65.30 a barrel.

Both benchmarks were set to gain over 6% this week.

The Organization of Petroleum Exporting Countries and allies, known as OPEC+, is set to meet on Sunday, with recent reports indicating that the cartel is likely to keep its output unchanged.

Ambar Warrick and Ayushman Ojha contributed to this report

Investing.com -- As fourth-quarter earnings approach, BofA Securities is highlighting companies best positioned to navigate AI-driven disruption, cost discipline pressures, and uneven enterprise spending patterns. 

While macro uncertainty persists, the firm’s analysis identifies several leaders with durable competitive advantages, improving fundamentals, and catalysts that could unlock significant shareholder value in 2026. 

Among these, SAP emerges as the sector’s premier large-cap pick, backed by accelerating cloud adoption and a compelling AI monetization strategy, according to BofA Securities analysts.

The brokerage also sees opportunities across travel software, fintech, and payments platforms where structural growth and improving profitability are creating attractive entry points.

SAP SE

SAP remains the sector’s premier large-cap name, supported by resilient cloud demand and strong profitability. 

The latest Q4 results showed solid revenue performance and a meaningful 31% jump in operating profit to €10.42 billion, with continued momentum in AI adoption across the ERP suite, SAP Business AI featured in two-thirds of Q4 cloud orders.

Cloud growth stayed healthy at 26% for the full year, though backlog expansion of 25% and 2026 cloud guidance of €25.8-26.2 billion came in lighter than hoped.

Even so, SAP’s high recurring revenue base (86% of total revenue), improving margins (28.3% operating margin, up 4.5pp), and roadmap for AI-driven upsell keep it well positioned, reinforced by a new €10 billion buyback program launching February 2026. 

Free cash flow nearly doubled to €8.24 billion, underscoring the company’s strong cash generation despite near-term growth concerns.

Sabre  

Sabre offers a compelling turnaround opportunity as global travel volumes normalize and its technology modernization program reaches critical milestones. 

The company is steadily improving its operational efficiency, reducing technical debt, and scaling its next-gen retailing and distribution solutions. 

These initiatives are enabling margin expansion and strengthening Sabre’s competitive positioning against industry peers. 

As airlines increasingly adopt advanced merchandising tools and dynamic pricing, Sabre stands to capture incremental revenue growth. Its "buy" rating reflects confidence in continued execution and operating leverage.

Klarna  

Klarna, though private, is one of the sector’s most influential fintech platforms and is entering a new phase of disciplined growth. 

With a renewed focus on profitability, Klarna has optimized credit performance, enhanced monetization across merchants and consumers, and invested strategically in AI-driven customer engagement. 

The platform’s scale in “buy now, pay later” and adjacent financial services provides a foundation for long-term expansion.

Its strong brand, improving cost structure, and advancing AI capabilities make Klarna an attractive fintech exposure within the broader payments ecosystem.

Paysafe  

Paysafe continues to show operational stabilization as management focuses on simplifying its portfolio and pursuing cost efficiencies.

The company has achieved incremental progress in key segments such as digital wallets and iGaming payments, though top-line momentum remains more limited compared to sector peers.

While profitability is improving and the balance sheet is strengthening, competitive pressures and moderate organic growth temper upside potential.

With a "neutral" stance, Paysafe is best viewed as a steady operator rather than a high-conviction outperformer in the current market environment.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.