CE 100 Index Gains 2.1% as AI Excitement Leads Infrastructure Companies Higher

The debut of the new presidential administration, the prospect of AI-friendly regulations and related infrastructure investments — and a planned investment of up to $500 billion into Stargate, a new AI-focused company — helped lead several names within the CE 100 Index higher.

The project would represent a significant private sector push into advanced technology, and Oracle, joining OpenAI and SoftBank in the venture, saw its shares leap 14% through the week.  The Work sector of the CE 100 Index was 2.8% higher as a result.  Several names in the Enabler group, up 3.1%, also gained ground — particularly those firms like Amazon (adding 4%) and Microsoft, which gathered 3.6%, that have also announced AI infrastructure buildouts.

Amazon Web Services (AWS) announced Jan. 7 that it plans to invest at least $11 billion in Georgia to expand infrastructure to support cloud computing and AI technologies. Meta shares were 5.7% higher within that group, and as PYMNTS reported, Meta plans to invest $60 billion to $65 billion in capital expenditures and grow its artificial intelligence (AI) teams “significantly” this year, CEO Mark Zuckerberg said in a Friday post online.

Most Pillars Gained Ground; Earnings Mark the Pay and Be Paid Sector

Elsewhere, all pillars save the Move pillar of the CE 100 Index were higher. The Move segment lost 1.3%, whereas Airbnb was 5.9% lower. Tesla shares slipped 4.8% ahead of earnings that are due to be reported this week.

The Pay and Be Paid segment advanced by 1.6%.

Sezzle shares added 4.6%.  In qualitative guidance provided by the company, CEO Charlie Youakim said in a statement that “exceptional holiday demand and the effective execution of our strategic initiatives fueled our fourth-quarter outperformance, and gives us confidence that we will exceed our prior 2024 guidance.  We’re encouraged by these positive trends, with credit losses aligning with expectations. We look forward to sharing our fiscal 2024 results at the end of February.”

American Express moved 2.6% on positive investor sentiment in the wake of earnings.

In earnings coverage, PYMNTS reported that 4th quarter spending on cards was up 8% year on year to $376.7 billion on an FX-adjusted basis, a pace outmatched by consumer spending in the United States, where that metric was up 9%.  Drilling down a bit, the company said spending by millennials and Gen Z, at 34% of U.S. consumer spending, was up 16%. By way of contrast, spending by other older cohorts was up mid-single-digit percentage points. American Express CEO Stephen Squeri said on an earnings call with analysts that billings growth was underpinned by “robust holiday spend.”

“We’re confident that we will continue to bring in large numbers of new premium customers, especially millennial and Gen Z consumers and small businesses, while also maintaining high growth across our international business,” he said.

PayPal shares offset some of those gains, where shares dipped 3%.  In the news this past week, PayPal paid a $2 million penalty to New York state to settle the state’s allegations that the company had cybersecurity failures that led to a data breach.

Block shares managed to tack on an additional 3% as the Consumer Financial Protection Bureau ordered Cash App owner Block to pay $175 million to address security failures.  Block must refund consumers up to $120 million and pay a penalty of $55 million into the CFPB’s victims relief fund, as had been reported earlier in the month.