January Markets Report
CONTENTS: (Sidebar also works)
- Quantum Computing Takes Off, Remains Highly Volatile
- Dark Pools Span Majority of Market Trades
- AI Companies Crash in a Sea of Red
- Crowdstrike Achieves All Time High
Quantum Computing Takes Off, Remains Highly Volatile (01/08)
Quantum computing companies see triple digit gains, future still uncertain
Quantum computing, a technology that could lead to breakthroughs, completes calculations multi-million times faster than normal computers. Potential breakthroughs of the technology include the ability to break modern encryption, complete complex calculations, and significantly improve research and development across many sectors.
Quantum computing companies across the markets have recently risen by several hundred percentage points, including Ionq, D-Wave Systems, Quantum Computing Inc, and Rigetti Computing. Several large technology corporations, including Google and IBM have also invested heavily into the technology.
However, many experts believe true quantum computing performing at absolute efficiency is years or even decades away. Recently as of writing, NVIDIA CEO Jensen Huang voiced doubt around the viability of the technology until many decades in the future. This single comment caused a ~40% decline in the quantum computing industry within a single day, highlighting its volatile and highly speculative nature.
Majority of quantum computing companies are not remotely near profitability, suggesting that absolute potential is years or even decades away.
6 MONTH graph of Quantum Computing Company, IonQ
Dark Pools Span Majority of Market Trades
Non-transparent “Dark Pools” make up majority of market trade volume
The stock market – composed of thousands of “public” companies – isn’t is drifting away from transparency. Now, more than 50% of shares traded on the stock market are made within “dark pools”.
Dark pools are private, non-transparent exchanges that complete large-order trades not visible to the public market. They are commonly used by large, institutional investors seeking to place high volume trades. The key about dark pools is that orders do not affect the overall share price of a stock.
The issue with dark pools is their lack of transparency. This opens the gateway to potential high-volume insider trading. An insider would be able to sell off millions of shares discreetly, without impacting the stock price in the near-term, and without the knowledge of the public market.
Developing knowledge of the institutional side of the stock market is essential towards better understanding the market’s complex structure.
AI Companies Crash in a Sea of Red (01/27)
Companies at the forefront of AI crash over demand fears
The markets experienced a brutal start of the week towards the end of January
A Chinese company, “Deepseek”, featuring a new AI companion chatbot – similar to OpenAI’s “ChatGPT” – recently launched their app and became the number one AI chatbot downloaded on Apple’s App Store. Their importance comes as the AI rival says they are significantly more efficient, consuming less energy at a cheaper cost.
This introduction hit the markets hard on January 27th, with the market opening in a sea of red. Many companies at the forefront of the AI boom, including NVIDIA, Broadcom, and Taiwan Semiconductor lost double digit percentages.
Monday’s Movers (at end of the session 01/09):
- NVIDIA was down 16.86%
- Broadcom was down 17.40%
- Taiwan Semiconductor was down 13.30%
- Nebius Group was down 37.44%
- Vertiv was down 29.88%
- NASDAQ (^IXIC) was down 612.5 points, finishing the day down 3.07%
- DOW (^DJI) was up 289.3 points after recovering from earlier losses
The introduction of Deepseek could cause disruption in the semiconductor industry, which has proliferated in recent years. Less demand for power production to fuel AI models means less demand for semiconductors (& GPU’s). Lowered demand in turn can significantly impact revenue growth in the semiconductor space, which the stock market certainly dislikes.
In light of these events, the markets have pulled back the market-caps for companies heavily involved in AI, (with NVIDIA losing $600B in valuation), highlighting the current uncertainty over continued exponential growth in AI driven revenue.
Crowdstrike Achieves All Time High (01/28)
Crowdstrike (CRWD) market-cap reaches $100B
We recently wrote about Crowdstrike on our research page in October. Revisiting the company a couple months later, the cybersecurity leader has hit an all time high, reaching a market-cap of $100B.
For context, Crowdstrike is an endpoint cybersecurity company, providing software to many companies across the globe in order to protect them from modern cyber threats.
Since our research analysis on Crowdstrike, the share price has increased 32.67%.
CROWDSTRIKE RESEARCH DOCUMENTATION
3 MONTH %change of Crowdstrike (CRWD)