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Click here to read this on StonyFinLab.org
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Featured Student Column: Equity Research Report
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Analyst: Maxwell Rodriguez
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Research Assistant: Daoqi Fang
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GE Vernova became a publicly traded company in mid-2024 and had significant growth seeing a 52-week high of $409.78. But going into 2025 there was skepticism of the stock due to the change in political parties and their outlook on different forms of energy. GE Vernova is the energy-focused subsidiary of General Electric (GE), focusing on establishing the company's part within the renewable energy and power space. The two sectors they focus on are renewable energy which implements the use of on and offshore wind turbines as well as hydro solutions and traditional power sources like gas turbines and nuclear energy. Their mission is to continue to build more sustainable electric power systems while prioritizing climate and global emissions.
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The energy market is poised for substantial growth, with global electricity demand expected to nearly double by 2050, rising from 26,000 TWh to 50,000 TWh. This rapid growth shows the dynamics of this market, as companies like GE Vernova, Schneider Electric, and Siemens Energy actively transition their portfolios toward renewable energy while maintaining traditional power generation capabilities to meet immediate market needs.
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Nvidia and other chip stocks experienced a significant decline following the release of DeepSeek's open-source AI model, which raised concerns about potential reduced spending on AI infrastructure. The market reaction was triggered by fears that open-source AI models like DeepSeek could potentially decrease the need for expensive AI chips and infrastructure, though analysts maintain that the fundamentals for AI chip demand remain strong.
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DeepSeek, a Chinese AI startup, caused significant market turbulence after releasing an open-source AI model that performs similarly to GPT-4 while requiring less computational power. While some investors worry this could signal reduced demand for expensive AI chips, analysts argue that the overall AI infrastructure demand remains robust, pointing out that even open-source models still require substantial computing power for training and deployment.
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The Federal Reserve is expected to maintain its current interest rate at 5.25%-5.5% during its upcoming meeting, marking the fourth consecutive pause in rate hikes. The Fed's decision comes amid a busy week of corporate earnings reports and economic data releases, including the January jobs report and ISM manufacturing data, which will provide further insights into the economy's health.
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MicroStrategy has significantly expanded its Bitcoin holdings by purchasing an additional 25,250 BTC for approximately $957.6 million during January 2024, bringing its total holdings to 190,000 BTC. Under the leadership of Michael Saylor, MicroStrategy has become the largest corporate holder of Bitcoin, continuing its aggressive acquisition strategy despite market volatility, and has seen substantial gains as Bitcoin's price trades above $42,000.
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Thanks to our members and volunteers (Seungyun Nam, Rishi Jain and Daoqi Fang) for contributions to this newsletter.
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