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In today’s edition,
- Walmart’s lifted forecast
- Perplexity’s valuation soars
- Next-level AI reasoning
- Wind-powered Bitcoin mining
Market Snapshot
US stock indexes faced their worst week since mid-November as the Federal Reserve’s cautious stance on rate cuts for 2025 unsettled markets. The S&P 500 and Nasdaq 100 recovered some losses on Friday, aided by calming inflation data, but sharp selloffs earlier in the week weighed heavily.
The Fed’s focus on inflation progress, reinforced by muted November PCE data, signaled a slower pace of rate adjustments, adding to market uncertainty.
Political tensions also pressured sentiment, with a potential government shutdown looming after the Republican-led House rejected a temporary funding plan. Amid the turmoil, US consumer sentiment rose for a fifth straight month, driven by optimism among Republicans post-election.
With the Fed in a wait-and-see mode and political uncertainties persisting, investors brace for further volatility in the weeks ahead.
Stock market closing data for the week of Dec 16th to Dec 20th, 2024
News Summaries
Walmart’s third-quarter revenue rose 5.5% to $169.6 billion, beating forecasts by nearly $2 billion, while operating income grew 8.2% to $6.7 billion and surpassed guidance, driving a second upward revision to its annual outlook. Much of this gain came from wealthier consumers—households above $100,000 in annual income—who turned to Walmart’s lower-price range and services like online ordering and delivery. Same-store sales climbed 5.3%, supported by stable or falling product prices, and online sales jumped 22%. The retailer’s international business also performed well, growing net sales by 8%. These data points indicate Walmart’s pricing strategy and convenience offerings have broadened its customer base, sustaining growth amid long-term inflationary pressure.
Perplexity just closed a $500 million funding round, lifting its valuation to $9 billion and marking its fourth raise this year. Led by Institutional Venture Partners and backed by names like Nvidia, New Enterprise Associates, and T Rowe Price, this latest round comes amid a broader rush to invest in AI-driven search tools. Perplexity now fields hundreds of millions of monthly queries, drawing 15 million monthly active users primarily from the U.S., and its annualized revenues jumped from $5 million in January to $35 million by August. The fresh capital will help the company secure sought-after AI talent and refine its approach to search advertising, an area where Google has long set the standard. While some worry that soaring valuations point to a potential bubble in AI, Perplexity’s steady growth, strong investor interest, and evolving business model suggest it could thrive as the field becomes more competitive.
OpenAI unveiled its upcoming AI model, o3, designed for advanced human-like reasoning, alongside a smaller version, o3-mini, set to launch in January. The o3 model spends more time computing responses, tackling complex multi-step problems better than its predecessors, including the recently introduced o1. OpenAI emphasized safety with a new “deliberative alignment” technique to improve response reliability and ethical adherence. This announcement comes amid an AI race, with competitors like Google’s Gemini and Meta’s upcoming Llama 4 pushing the boundaries of generative AI. Despite challenges in sourcing high-quality training data, OpenAI continues to innovate, wrapping up a 12-day event showcasing tools like Sora for AI video generation and a premium ChatGPT Pro subscription.
From the World of Crypto
These days, a lot of people are talking about bitcoin’s massive energy consumption. This year alone, its mining operations have used about 146 terawatt hours (TWh) of electricity—more than what an entire country like Sweden uses in a year.
With bitcoin prices hovering around $100,000, it’s no surprise that interest in mining is rising, and that could push energy use even higher.
One group, Mara Holdings, is trying something a bit unusual: it bought a wind farm in Texas. Instead of running their bitcoin rigs nonstop, they’ll only mine when the wind is blowing, or roughly 30% of the time. The idea is that electricity from the wind is basically emissions-free, giving Mara’s tokens a “greener” edge. It’s a big departure from the typical model, where miners try to run machines around the clock to cover their steep capital costs.
Mara can pull this off for a couple of reasons.
First, the wind farm it bought might have been relatively cheap, thanks to its remote location and limited local buyers. Second, Mara is using older, already-paid-for mining equipment. Since these older machines aren’t the most energy efficient, it helps that their power is coming at near-zero cost. Plus, when the wind isn’t blowing, Mara could still tap into grid power if it’s cheap enough, though that might undercut the “green” angle.
This approach probably won’t work everywhere. It’s hard to find wind farms or other renewable setups where it makes financial sense to operate like this. But in places with more renewable energy than local demand, even part-time mining can turn a profit—especially when using less expensive, older equipment. It’s not a solution that will transform the entire industry overnight. Still, for Mara, it’s a clever way to align the push for greener energy with the bottom line.
