Alphabet Hits Record High Following Trump’s FTC Chair Nomination

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Alphabet (GOOGL.O), the parent company of Google, soared to a record high on Wednesday after President-elect Donald Trump nominated Andrew Ferguson as the new chair of the Federal Trade Commission (FTC). Ferguson, a current FTC commissioner and known dissenter under outgoing chair Lina Khan, is expected to shift the agency’s approach to antitrust enforcement.

Lina Khan, whose tenure focused on stringent antitrust actions against Big Tech, brought significant regulatory pressure on firms like Alphabet, Microsoft, and Apple. Analysts believe Ferguson’s leadership may signal the end of the antitrust case against Alphabet, sparking investor optimism. “Under Ferguson, many expect a more lenient stance toward corporate power,” remarked Jay Woods, chief global strategist at Freedom Capital Markets.

Alphabet’s shares surged 5.5% to a record $195.45, leading a broader rally in Big Tech. Tesla also reached a record high, gaining 4.6%, as investors speculated on the company benefiting from CEO Elon Musk’s close ties to Trump. Other tech heavyweights followed suit: Microsoft rose 1.2%, while Amazon.com and Meta Platforms each climbed 2%.

The rally was further fueled by expectations of an interest-rate cut later this month, following a favorable inflation report. Lower interest rates are typically advantageous for growth stocks like those in the technology sector.

Alphabet’s recent stock momentum also stems from groundbreaking advancements in AI and quantum computing. Earlier in the week, the company unveiled the second generation of its Gemini artificial-intelligence model, along with innovative applications for AI beyond chatbots. These include integration with wearable technology, such as AI-enhanced eyeglasses.

Additionally, Alphabet introduced a new-generation quantum chip that addresses a critical challenge in quantum computing. “This is Alphabet cementing its position at the forefront of transformative technology,” said Michael Ashley Schulman, CIO of Running Point Capital. Jamie Meyers, a senior analyst at Laffer Tengler Investments, highlighted how Alphabet’s quantum breakthrough demonstrates its capability in hardware development, despite being perceived as trailing in AI innovation.

While Trump’s broader approach to Big Tech remains uncertain, Ferguson’s appointment has catalyzed a wave of optimism, particularly for companies like Alphabet, which have faced intense regulatory scrutiny in recent years.

 

Nasdaq Hits Historic 20,000 Mark, Fueled by Big Tech Rally

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The Nasdaq Composite Index (.IXIC) reached an unprecedented milestone on Wednesday, closing above 20,000 for the first time. This historic achievement caps a year of remarkable gains driven by enthusiasm for artificial intelligence (AI) and expectations of declining interest rates. The index climbed 1.8% on the day to close at 20,034.89, marking a more than 33% surge in 2024.

The rally has been propelled by major technology companies, including Apple, Nvidia, Alphabet (Google’s parent company), and Tesla. These tech giants, collectively known as “megacap” stocks, have increasingly dominated the index. Nvidia, in particular, has seen explosive growth, with its shares soaring over 1,100% since their October 2022 low, thanks to its leading role in AI chip production.

Wednesday’s gains were spurred by a U.S. inflation report that reinforced expectations of an upcoming Federal Reserve rate cut. However, the dominance of megacap stocks, which now account for 59% of the Nasdaq’s weighting, raises questions about potential risks if these companies lose investor favor.

The index’s journey reflects resilience and recovery. After tumbling in early 2020 due to the pandemic, the Nasdaq rebounded swiftly as the Federal Reserve slashed interest rates and the U.S. government implemented substantial fiscal stimulus. Although it faced a sharp 33% decline in 2022 amid soaring inflation and aggressive Fed rate hikes, the index has since surged nearly 90%, buoyed by investor excitement over AI’s transformative potential.

Despite its current valuation at 36 times earnings—well above the long-term average of 27—the Nasdaq remains far from the extremes of the dot-com bubble when it reached a price-to-earnings ratio of 70. Analysts suggest that while the recent rally is robust, it appears more sustainable compared to the late 1990s tech boom.

The tech-heavy Nasdaq has outperformed other major U.S. indexes in 2024, with its 33% gain surpassing the S&P 500’s 27% increase and the Dow Jones Industrial Average’s 17% rise. Over the past decade, the Nasdaq has climbed by over 320%, significantly outpacing the S&P 500 and Dow, which have risen 200% and 150%, respectively.

Still, concerns linger over valuation and concentration risks. Cameron Dawson of NewEdge Wealth noted the challenge of sustaining this momentum into 2025 amid high growth expectations and elevated stock prices. The concentration of megacap stocks amplifies the risk of downturns, as evidenced by the steep declines in Meta and Tesla during 2022.

As investors ride this wave of optimism, questions remain about whether the Nasdaq’s remarkable performance can continue, especially as the market’s focus remains on AI innovation and monetary policy shifts.

 

Canadian News Outlets File Lawsuit Against OpenAI Over Alleged Copyright Violations

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Five prominent Canadian news organizations filed a lawsuit against OpenAI on Friday, accusing the AI company of violating copyright laws and terms of service. The lawsuit, brought forth by Torstar, Postmedia, The Globe and Mail, The Canadian Press, and CBC/Radio-Canada, alleges that OpenAI has been scraping large amounts of content from these outlets without permission or compensation in order to develop and improve its AI products, including the widely used language model, ChatGPT.

This legal action is part of a growing trend of lawsuits filed by various copyright holders, including authors, visual artists, and music publishers, against OpenAI and other tech giants. These lawsuits are focused on the data used to train generative AI systems. OpenAI, which is heavily backed by Microsoft, has faced increasing scrutiny over its use of copyrighted materials in the training process, sparking debates around intellectual property and the commercial use of content created by others.

In a joint statement, the Canadian news companies emphasized the importance of journalism for the public good, arguing that OpenAI’s use of their content for commercial purposes without consent is both unethical and illegal. “Journalism is in the public interest. OpenAI using other companies’ journalism for their own commercial gain is not,” they stated. The companies are seeking compensation and are demanding that OpenAI stop using their materials without authorization.

This lawsuit follows a similar case in the United States, where a federal judge dismissed a lawsuit on November 7 against OpenAI that accused the company of misusing content from news outlets Raw Story and AlterNet. The five Canadian news organizations have filed an 84-page statement of claim in Ontario’s Superior Court of Justice, demanding financial damages and a permanent injunction to prevent OpenAI from using their content without permission in the future.