Federal Reserve Chairman Jerome Powell’s comments sent the market swinging during intraday trading on Tuesday, but the major US stock averages eventually closed higher. The Nasdaq led the advance, rising 1.9%.
The focus on AI continued during trading on Tuesday. Fueled by optimism for its ChatGPT-like product, Baidu (NASDAQ:BIDU) posted a double-digit percentage gain. Other big-name tech players also stepped up, including Alphabet (GOOG) (Google), Microsoft (MSFT) and Nvidia (NVDA).
Among individual stocks, Oak Street Health (OSH) was an outstanding performer, rising on the back of reported acquisition interest from CVS Health (CVS). Meanwhile, the earnings news sent Fiserv (FISV) to a fresh 52-week high.
Chegg (CHGG) moved in the opposite direction on the earnings news, falling after its quarterly update included a weak forecast.
Sector in focus
The market’s recent focus on AI technology sent several big-name stocks higher on Tuesday. This included Chinese search giant Baidu (BIDU), which rose 12% after announcing a plan to launch a bot similar to ChatGPT.
Interest has shifted to other tech giants that are seen as potential leaders in the AI transition. Search stalwart Alphabet (GOOG) (GOOGL), which has its own AI offerings, advanced nearly 5%. Meanwhile, Microsoft (MSFT), which invested in ChatGPT, was up more than 4%.
Elsewhere, the trend has also boosted companies involved in the overall technology backbone that will underpin AI. For example, this contributed to a 5% advance at Nvidia (NVDA).
outstanding winner
Acquisition talks fueled a spree of Oak Street Health (OSH) stock purchases, as shares soared 30% amid reports that it has become a takeover target for CVS Health (CVS).
According to the Wall Street Journal, CVS appears close to a deal to acquire OSH for $10.5 billion. The news outlet reported that the transaction could be valued at $39 per share.
On speculation of a possible acquisition, OSH soared $7.68 to end at $33.68. With the advance, the stock jumped above a recent trading range and hit a 52-week intraday high of $34.63.
prominent decliner
Chegg (CHGG) experienced significant selling pressure following the release of its quarterly update. The release of a disappointing forecast sent shares down 17%.
The educational services company said net income plummeted from $24.3 million last year to a level of $1.9 million in the most recent quarter. On a non-GAAP basis, EPS increased to $0.40 compared to $0.38 last year. Revenue fell 1% to $205.2 million.
Looking ahead, the company forecast first-quarter revenue of $184 million to $186 million, compared with an analyst consensus of $200 million. For the full year, CHGG gave a top-line forecast of $745M-$760M.
Affected by the earnings news, CHGG fell $3.60 to close at $17.43. This extended a recent downtrend. Shares have fallen 31% so far in 2023 and are down 42% since late November.
new notable high
Fiserv (FISV) rallied after reporting quarterly results that broadly met analysts’ expectations, as the financial services technology company held its own in a tough economic climate. Shares rose 8% to hit a new 52-week high.
The company reported fourth-quarter adjusted EPS of $1.91, matching analysts’ expectations. The company’s revenue figure increased 8% to $4.36 billion. Organic revenue was up 12%.
Looking ahead, FISV forecasts organic revenue growth of 7-9% by 2023, with projected adjusted EPS between $7.25 and $7.40.
FISV ended Tuesday’s trading at $115.28, an advance of $8.88 on the day. During the session, the shares hit a 52-week intraday high of $115.50. The advance added to a recent rally, with shares up 13% over the past month.
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