In a week marked by anticipation on Wall Street, stocks were mostly steady on Monday morning following a successful week, with investors eyeing the Federal Reserve’s interest rate decision expected on Wednesday. The market is largely forecasting a 25-basis-point reduction, with the CME FedWatch Tool indicating an 89% probability of this outcome. Should it occur, this would be the Fed’s third rate cut of 2025. Earnings reports are also expected this week from key players Broadcom and Costco, further shaping market sentiment.
Adding to the buzz, Warren Buffett’s Berkshire Hathaway confirmed that Todd Combs, the investment officer and CEO of Geico, will leave the company this year to take on a new role at JPMorgan Chase. Combs, who has been with Berkshire since 2010, will lead the bank’s new Security and Resiliency Initiative. This transition occurs as speculation grows regarding Buffett’s impending retirement as CEO at the end of the year.
In other corporate developments, IBM announced a significant acquisition of data streaming platform Confluent in an $11 billion all-cash deal, marking a strategic move to enhance its artificial intelligence capabilities. Following the announcement, Confluent’s shares soared by 29%, although IBM’s stock saw a slight dip of approximately 1.5%.
Analyst Dan Ives from Wedbush has provided an optimistic forecast regarding Apple, predicting that 2026 could be pivotal for the tech giant’s advancements in artificial intelligence. He anticipates a major collaboration between Apple and Google’s Gemini, asserting that CEO Tim Cook will remain in his role at least until 2027. Following his analysis, Ives raised Apple’s price target from $320 to $350 while maintaining a buy rating.
Meanwhile, Microsoft is engaged in discussions that may shift its custom chip business from Marvell to Broadcom, as reported by The Information. This potential transition follows Broadcom’s recent involvement in the co-design of Google’s Tensor Processing Units (TPUs) for Gemini, sending Marvell’s stock down over 6%.
Bank of America has increased its price target for Carvana significantly from $385 to $455, citing the company’s recent addition to the S&P 500. Analysts highlighted the potential benefits to Carvana’s capital structure, forecasting a decrease in capital costs, which propelled the stock up by 8.5%.
In a contrasting analysis, Deutsche Bank downgraded 3M from buy to hold, reducing its price target from $199 to $178, citing minimal upside potential through 2028.
Morgan Stanley upgraded General Motors from hold to buy, reflecting a cautious yet slightly optimistic outlook on internal combustion engines and hybrids for the upcoming year. However, a note of caution remains as analysts predict an ongoing “electric vehicle winter” lasting through 2026.
Wolfe Research Analyst Darrin Peller initiated coverage on Capital One with a buy rating, setting a price target of $270. Peller expressed confidence in the credit card issuer’s growth trajectory, which he believes will support higher stock valuations.
Additionally, Truist upgraded discount retailer Five Below from hold to buy, raising its price target from $179 to $216 due to what analysts described as “unicorn-like growth.” Despite a remarkable 65% increase in stock value this year, analysts noted it is still trading at a below-average multiple.
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