WSJ What’s News - What’s News in Markets: Netflix’s Blockbuster Quarter, Oracle Gains, GE Aerospace Jumps

Episode Date: January 25, 2025

What drove Netflix’s blockbuster quarter? And why is a planned AI infrastructure project boosting Oracle? Plus, why did jet maker GE Aerospace’s shares take off? Host Francesca Fontana discusses the biggest stock moves of the week and the news that drove them. Sign up for the WSJ's free Markets A.M. newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Let's get to it. Welcome back, everybody. We had a short trading week this week with Monday off for MLK Day, which was also the day of the inauguration. And President Trump's first week back in the White House has been a pretty good one for the stock market. Trump has reiterated plans to cut corporate taxes and regulations since being sworn in, while also somewhat easing investors' worries about tariffs.

He told Fox News he would, quote, rather not have to use his tariff plan against China. Plus, this week, traders got to see a strong start to earnings season, and more on that in a second. All in all, the S&P 500 notched its first record close of 2025 on Thursday, and all three indexes ended higher for the second week in a row.

The Dow rose 2.2 percent, while the S&P 500 and the Nasdaq each added 1.7 percent. First up, let's talk about the streaming giant Netflix. Netflix is ramping up U.S. prices in order to cash in on its surging demand. On Tuesday, the company posted record subscriber gains in the fourth quarter and said that the price tag on its monthly subscriptions will be going up. So let's talk numbers. The standard with ads option will cost $7.99 a month, up $1 from $6.99. The standard plan without ads will go up by $2.50 to $17.99.

And the premium tier is going up by $2 to $24.99. And viewers really flocked to Netflix during this quarter, whether to watch the second season of Squid Game or the action thriller Carry On, neither of which I've seen, or the November heavyweight boxing match between Jake Paul and Mike Tyson that streamed live and I now remember I caught like two seconds of. They were all huge hits for Netflix. So as you may expect, Netflix shares jumped 9.7% on Wednesday and ended the week with a gain of nearly 14%. As Trump's first week back in office got underway, we also got some big news that moved AI stocks.

So, let's focus on Oracle. On Tuesday, the new administration said that Oracle would be part of Stargate, a $100 billion artificial intelligence infrastructure project, along with the Japanese conglomerate SoftBank, OpenAI, and Abu Dhabi's MGX. It's a lot of spending, up to $500 billion over the next four years, and not a whole lot of details.

Key elements of the plans have yet to be disclosed, though we did find out that Microsoft and chipmakers Arm and Nvidia were also named Stargate quote unquote technology partners. But still, there were many basic questions left unanswered in the announcement, like how much are individual companies each investing? Or how will they get a return on their investment? Etc. But it seemed like investors cared about the gist, the bottom line, of big tech investing in AI in the US. And it seemed like that was good enough for them. Oracle led a tech rally on Tuesday, with the stock gaining 6.8% during the session and 14% on the week.

Last but not least, let's talk about GE Aerospace. Some context. GE Aerospace is the jet engine maker that became a standalone company back in April after GE's power business was spun off. It was the big general electric breakup. And it was GE Aerospace's latest results that really flew past Wall Street's estimates. Chief Executive Larry Kolb said that the company ended 2024 with robust demand for its services and products, with fourth-quarter

orders up 46 percent, and he predicts more growth in 2025. Airlines have been desperate for engines and other parts due to aircraft production delays at Boeing and Airbus, which we've talked about on this podcast before, as well as supply chain shortages and the durability problems that are ailing newer engine models. And while supply issues continue to cause problems for the aerospace industry, the CEO also said that the company is seeing improvements among its key suppliers. GE Aerospace shares jumped 6.6% on Thursday, retreating a bit the next day, and ended the week up more than 7.5%.

And now you know what's news in markets this week. You can read about more stocks that moved on the week's news in The Score, my column in the Wall Street Journalist Exchange section. Today's show was produced by Anthony Fancy, with supervising producer Tali Arbel. I'm Francesca Fontana, have a great weekend, and see you next Saturday.