Federal Reserve Chairman Jerome Powell’s comments sparked wild market swings during intraday trading on Tuesday, but the major U.S. stock averages ended higher. The Nasdaq led the advance, rising 1.9%.
Focus on AI continued during trading on Tuesday. Buoyed by optimism for its ChatGPT-like product, Baidu (NASDAQ: BIDU) recorded a double-digit percentage gain. Other well-known tech players have advanced, including Alphabet (GOOG) (GOOGLE), Microsoft (MSFT) and Nvidia (NVDA).
Among individual stocks, Oak Street Health ( OSH ) was the standout performer, jumping in light of reported takeover interest from CVS Health ( CVS ). Meanwhile, the earnings news sent Fiserv ( FISV ) to a new 52-week high.
Chegg ( CHGG ) went in the opposite direction on earnings news, falling after its quarterly update included a weak forecast.
Sector in focus
The market’s recent focus on artificial intelligence technology sent shares of a number of household names soaring on Tuesday. That includes Chinese search giant Baidu (BIDU), which surged 12% after announcing plans to launch a ChatGPT-like bot.
Interest has spilled over to other tech giants who are seen as potential leaders in the AI transition. Alphabet ( GOOG ) ( GOOGL ), which has its own AI offerings, advanced nearly 5%. Meanwhile, Microsoft (MSFT), which invested in ChatGPT, climbed more than 4%.
Elsewhere, the trend has also given a boost to companies involved in the general technology backbone that will underpin AI. For example, it contributed to a 5% advance in Nvidia (NVDA).
Outstanding Gainer
The takeover chatter fueled a buying frenzy in Oak Street Health ( OSH ) stock, as the stock jumped 30% amid reports it has become a takeover target for CVS Health ( CVS ) .
CVS appears close to a deal to acquire OSH in a $10.5 billion deal, according to the Wall Street Journal. The statement said the transaction could be valued at $39 per share.
On speculation about a potential takeover, OSH skyrocketed $7.68 to $33.68. With the advance, shares jumped above a recent trading range and touched an intraday 52-week high of $34.63.
Standout Decliner
Chegg (CHGG) saw significant selling pressure following the release of its quarterly update. The announcement of the disappointing forecast sent the stock down 17%.
The education services company said net income fell from $24.3 million last year to $1.9 million in the latest 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 analysts’ consensus of $200 million. For the full year, CHGG gave the highest forecast of 745 to 760 million dollars.
Hurt by the earnings news, CHGG fell $3.60 to $17.43. This extended the recent downtrend. Shares are down 31% so far in 2023 and have retreated 42% since the end of November.
Significant New High
Fiserv ( FISV ) rose after posting quarterly results that largely met analysts’ expectations, as the financial services technology firm held its own in a tough economic environment. Shares rose 8% to hit a new 52-week high.
The company reported fourth-quarter adjusted EPS of $1.91, which was in line with analysts’ expectations. The company’s revenue figures rose 8% to $4.36 billion. Organic revenue grew by 12%.
Looking ahead, FISV forecast organic revenue growth of 7%-9% for 2023, with forecast adjusted EPS between $7.25 and $7.40.
FISV ended trading on Tuesday at $115.28, up $8.88 on the day. During the session, the stock hit an intraday 52-week high of $115.50. The advance contributed to the recent rally, with shares up 13% over the past month.
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