What DeepSeek? Big Tech already bringing in billions

This report is from today’s CNBC Daily Open, our international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

Markets rise amid choppy trading
Major U.S. benchmarks rose on Thursday in a volatile session that saw stocks slump in the final hour of trading before sharply recovering losses. Asia-Pacific markets mostly advanced Friday. India’s Nifty 50 index climbed around 0.8% ahead of the country’s Union Budget on Saturday, in which the government has to balance fiscal prudence with economic stimulus.

Slower-than-expected U.S. economic growth
U.S. gross domestic product expanded by 2.3% on an annualized and inflation-adjusted pace in the fourth quarter of 2024, the U.S. Commerce Department reported Thursday. The figure was lower than the 2.5% expected by economists surveyed by Dow Jones, and a drop from the 3.1% growth recorded in the third quarter. Still, the U.S. experienced healthy economic growth of 2.8% for the whole of 2024.

Apple’s services sales make up for iPhone slump
Apple shares climbed around 3% in extended trading after the company reported a 14% year-on-year jump in services revenue during its first fiscal quarter — which helped boost gross margins to 46.9%, the highest on record. That bump defrayed worries over declining iPhone sales, which fell 11% on an annual basis in the Greater China market. But CEO Tim Cook said there’s “a national subsidy program” in China, which could boost sales.

Samsung Electronics’ operating profits take a hit
Samsung Electronics reported fourth-quarter revenue that rose 12% from a year earlier, beating LSEG estimates. Annual revenue in 2024 was the second highest on record, Samsung said. The South Korean firm’s operating profit jumped about 130% year on year — but slumped nearly 30% on a quarterly basis amid soft market conditions and an increase in company expenditures.

New funding round would double OpenAI’s valuation
OpenAI is in talks to raise up to $40 billion in a funding round that would lift the artificial intelligence company’s valuation to as high as $340 billion, CNBC has confirmed, more than doubling its last valuation of $157 billion by private investors. Masayoshi Son’s SoftBank would lead the round, contributing up to $25 billion, according to two people familiar with the negotiations who asked not to be named because the talks are ongoing. At such amounts, SoftBank would surpass Microsoft as OpenAI’s top backer.

[PRO] As goes January, so goes the year
The January Barometer, a concept devised by Yale Hirsch, creator of the Stock Trader’s Almanac, states that “as goes the S&P 500 in January, so goes for the year.” With only one trading day left in the month, the S&P is higher by 3.2% for the month — putting it on course to signal gains for the rest of 2025. But why would performance in January determine the market’s direction in the following eleven months?

After the DeepSeek-induced ruction that rocked markets on Tuesday, stocks seem to have regained their footing. Assessments — and skepticism — by industry experts over DeepSeek’s claims helped dispel some of that initial panic.

A week packed with Big Tech earnings also reminded investors that it might be better to focus on companies already bringing in billions in revenue, while a healthy, albeit slightly disappointing, U.S. gross domestic product report fueled expectations that earnings growth will continue in 2025.

Friday’s the last trading day of January, and, unless a new artificial intelligence model that costs maybe $5 is unleashed on the world, the S&P 500 is likely to finish the month in the green. Despite DeepSeek resurfacing some deep-seated fears about lofty tech valuations, the S&P is having a promising start to the year.