These 8 Key Items Are Shaping the Stock Market Thursday
Microsoft, Meta, AI capex levels and enterprise AI adoption increase, a shutdown deal, and renewed geopolitical concerns are moving stocks.
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These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to all major market indexes inching higher at the open.
As you’ll see below, there are several offsetting puts and takes for the market to contend with Thursday morning. Coming up, we’ll be digging deeper into quarterly results from Microsoft (MSFT) , Meta (META) , and ServiceNow (NOW) . We’ll hold our comments on United Rentals (URI) and Waste Management (WM) until we get through this morning’s earnings calls.
1. Microsoft said in its report Wednesday that capital expenditures for its fiscal second quarter were $37.5 billion, above Wall Street’s consensus estimate of $36.7 billion, with about two-thirds of that driven by chips… Meta said its capital spending could be as much as $135 billion in 2026, about 20% higher than Wall Street expectations and nearly double last year’s investment level. (Barron’s)
This adds another dimension to Taiwan Semi’s (TSM) megatrend comment for AI and confirms hyperscaler capital spending levels will be much higher this year than last, a positive for the Pro Portfolio’s chip holdings. More answers as to how much higher that capex level will be come next week with earnings from Alphabet (GOOGL) and Amazon (AMZN) .
2. Samsung Electronics said its operating profit more than tripled to a record high in the fourth quarter and forecast strong chip demand ahead, as the race to build artificial intelligence strains chip supply and boosts prices… However, it warned rising memory chip prices are weighing on its smartphone and display business and cautioned there are other lingering risks, such as global tariffs. (Reuters)
To Samsung’s comment, we can add the one from Microsoft that it sees its Windows OEM and devices revenue declining “in the low teens” in the March quarter compared to the December 2025 quarter. Taking them together tells us the move to reposition the Portfolio’s chip exposure by exiting the very profitable Qualcomm (QCOM) position and moving into Broadcom (AVGO) was the right call.
3. International Business Machines recorded higher revenue in the fiscal fourth quarter, as customers move to implement AI in more areas of their businesses. IBM’s generative AI book of business now stands at more than $12.5 billion, up $3 billion from the third quarter. Chief Financial Officer Jim Kavanaugh said he anticipates that the AI book of business will continue to increase at a similar pace, with growth continuing through the next handful of years. (WSJ) ServiceNow CEO Bill McDermott said AI is helping to drive momentum for the company, as “all” its big deals include at least five AI products. He argued that ServiceNow helps companies put things like large language models into practice, which is increasingly of interest to customers. (MarketWatch)
While shares of (IBM) and ServiceNow (NOW) look to move in two different directions this morning, despite ServiceNow’s 25% year-over-year jump in remaining performance obligations and upsized buyback program, comments from both point to rising AI adoption in the enterprise, building on other signals we’ve shared with you in recent weeks.
4. OpenAI is in talks to raise close to $40bn from Nvidia, Microsoft, and Amazon, three of its largest infrastructure providers, as part of its blockbuster $100bn funding round. Nvidia could invest as much as $20bn in the ChatGPT maker as part of its next funding round, while Amazon has discussed investing $10bn or more, according to people familiar with the matter. (FT)
While positive for our position in SuRo Capital (SSSS) , this has the potential to renew questions over what some have called the “AI-shell game” between OpenAI and its partners and suppliers. We recognize the optics, but as we’ve discussed before, rising AI adoption and usage comments like those from IBM, ServiceNow, and others are better indicators of what lies ahead.
5. Brent crude futures hit $70 a barrel for the first time since September after US President Donald Trump warned Iran to make a nuclear deal or face military strikes. (Bloomberg) Copper led a blistering metals rally on Thursday that also pushed prices of gold and silver to record highs, as investors pour into the metals at an unprecedented pace amid concerns about the dollar and geopolitical turmoil. (FT)
Signs that geopolitical uncertainty remains in play, potentially keeping the market volatile as the current earnings season continues. As we discussed on yesterday’s Stocks & Markets Podcast, elevated gold and silver prices are a positive for several positions in our EPS Diplomats basket.
6. U.S. Senate Democrats called for new restrictions on immigration agents on Wednesday, setting up a confrontation with the Trump administration that could lead to a partial government shutdown. Senate Democratic Leader Chuck Schumer said agents with the Department of Homeland Security, including ICE, must stop wearing face masks, use body cameras, and follow the same use-of-force rules as local police. (Reuters) President Trump and Senator Chuck Schumer, Democrat of New York and the minority leader, moved on Wednesday night toward a possible agreement to negotiate new restrictions on federal immigration agents, potentially averting a government shutdown early Saturday when funding for multiple federal agencies is slated to lapse. (The New York Times)
Once again, a potential and also half-baked deal to avert a government shutdown is likely to come down to the wire. If the Democrats can push through body camera usage, that would be a positive for Axon (AXON) shares, especially if it also means AI and cloud services. If you missed our comments on AXON yesterday, you can find them here.
7. Economic data today per TipRanks: Jobless Claims (Weekly), Productivity & Unit Labor Cost (Q3 2025), Factory Orders (November), Wholesale Inventories (November), EIA Natural Gas Inventories (Weekly).
8. Companies reporting today per TipRanks: Altria (MO) , Caterpillar (CAT) , Comcast (CMCSA) , Dow (DOW) , Honeywell (HON) , Lazard (LAZ) , Lockheed Martin (LMT) , Mastercard (MA) , Norfolk Southern (NSC) , Parker-Hannifin (PH) , Pulte Group (PHG) , SAP SE (SAP) , Sherwin-Williams (SHW) , Apple (AAPL) , Deckers Outdoor (DECK) , KLA Corp. (KLAC) , SanDisk (SNDK) , Visa (V) , Western Digital (WDC) .
At the time of publication, TheStreet Pro Portfolio was long META, MSFT, NOW, AXON, SSSS, URI, WM, AMZN, GOOGL and AVGO.
