Good afternoon! JPMorgan just fired its proxy advisors and hired an algorithm instead. The bank told employees it’s ditching firms like Glass Lewis and ISS in favor of an in-house AI system called Proxy IQ, marking the first time a major asset manager has fully walked away from human proxy guidance.
The move lands as proxy advisors are already under fire from both corporate America and Washington. JPMorgan says Proxy IQ can analyze thousands of shareholder meetings and voting records at once, and critics like Jamie Dimon have long argued that outsourced proxy advice holds too much sway over executive pay, governance, and ESG decisions.
MARKETS
Stocks went in different directions as investors stepped back from big tech and rotated into smaller names. The Dow climbed on defense-related headlines from President Trump, the Nasdaq slipped on a slow Nvidia day, and the Russell 2000 hit a new high as small caps caught a bid.
Economic data stayed supportive, with jobless claims coming in below expectations and layoffs falling to their lowest level since mid-2024. Commodities were mixed, with traders turning cautious on silver while Trump again pushed for $50 oil.
STOCKS
Winners & Losers
What’s up 📈
Neogen surged 31.44% after beating earnings expectations and raising its full-year outlook $NEOG
Bloom Energy jumped 12.85% following a $2.65 billion fuel-cell supply agreement with American Electric Power $BE
Applied Digital gained 8.02% after posting a massive Q2 revenue beat and confirming advanced talks with another hyperscaler $APLD
Gap climbed 6.76% after UBS upgraded the stock to Buy, citing improving execution across Athleta and higher-margin categories $GAP
Costco rose 3.71% after reporting stronger-than-expected December comparable sales $COST
Lockheed Martin, Northrop Grumman, and RTX moved higher after President Trump proposed a $1.5 trillion military budget for 2027 $LMT $NOC $RTX
What’s down 📉
Soho House plunged 9.59% after reports that one of the lead investors in its go-private deal lacks sufficient funding $SHCO
Seagate Technology dropped 7.72% as investors took profits following last session’s sharp rally in memory stocks $STX
SanDisk fell 5.38% amid the same profit-taking across storage names $SNDK
Jefferies Financial slid 5.31% after a charge tied to its exposure to bankrupt First Brands overshadowed stronger revenue $JEF
AbbVie dipped 4.01% after denying reports it is in talks to acquire Revolution Medicines $ABBV
Alcoa declined 2.63% following a JPMorgan downgrade favoring copper over aluminum $AA
Shell eased 1.72% after flagging weaker fourth-quarter oil trading results $SHEL
DEFENSE
Trump Proposes $1.5 Trillion Defense Budget, Sending Defense Stocks Higher
The defense trade flipped from selloff to surge in a matter of hours.
President Trump floated a plan to push US military spending to $1.5 trillion in 2027, a level that would dramatically expand defense outlays and reshape expectations across the sector. The proposal quickly redirected investor attention from short-term policy threats to the sheer size of the long-term revenue opportunity.
Shares of Lockheed Martin $LMT climbed 4.34%, Northrop Grumman $NOC rose 2.39%, and L3Harris Technologies $LHX jumped 5.16%. Huntington Ingalls $HII advanced 6.18%, while General Dynamics $GD and RTX $RTX also moved higher. Smaller defense and drone-focused names led the charge, with AeroVironment $AVAVup 8.31% and Kratos Defense $KTOS surging 13.78%.
From Time-Out to Tailwind
The rally came after a rough start to the day. Earlier, defense stocks sold off when Trump warned he could restrict dividends and share buybacks until contractors accelerate production timelines.
That concern faded quickly once the spending proposal hit. Investors began weighing potential contract growth and backlog expansion against the possibility of tighter capital return rules, and the math favored growth.
Analysts framed the move as a clear tradeoff. Limit payouts in the near term, but unlock massive federal demand over the next decade.
Even companies that rely heavily on government contracts saw sentiment improve as the size of the proposed budget overshadowed concerns about shareholder distributions.
Big Number, Bigger Reality Check
A $1.5 trillion defense budget is far from guaranteed. Congress would need to approve any increase of that magnitude, and legal questions remain around how much control the White House can exert over corporate payout policies.
Still, markets rarely wait for certainty. Even if the final number comes in lower, rising global tensions and sustained military investment continue to act as a powerful tailwind for the defense sector.
For now, investors are betting that long-term spending matters more than short-term headlines.
NEWS
Market Movements
🇨🇳 China may reopen Nvidia H200 sales: China is reportedly preparing to allow local firms to buy Nvidia’s H200 chips for select commercial uses, reopening what bulls see as a massive revenue lane for $NVDA. Even if H200 sits behind Blackwell and Vera Rubin, it is still a huge step up from the restricted chips China has been limited to.
🏗️ Applied Digital posts monster quarter: Applied Digital $APLD jumped after reporting revenue growth of 250% year over year and beating expectations, while saying it is in advanced discussions with another hyperscaler. Management also pointed to long-term AI factory leasing momentum, including a $5B 15-year lease, as demand keeps stacking up.
🚘 Waymo shrinks the cost gap: Waymo introduced a new autonomous van aimed at lowering per-vehicle costs while keeping fully driverless capability, pushing its deployment story forward. Tesla $TSLA still looks cheaper on hardware, but Waymo’s advantage is it is already operating at scale without safety drivers.
₿ Bitcoin slips but Citi stays bullish: Bitcoin $BTC dipped and ETFs saw large outflows, but Citi reiterated a $143K 12-month base case and framed the pullback as noise. The bank still ties upside to ETF demand and broader liquidity rather than short-term candles.
🚗 Ford brings back eyes-off driving: Ford $F says it plans to launch Level 3 eyes-off driving starting in 2028 on its next-gen EV platform, with lidar as a key ingredient. The autonomy feature will be an add-on, and Ford is still deciding whether it sells it upfront or as a subscription.
🎬 Paramount doubles down on WBD bid: Paramount Skydance $PSKY reaffirmed its $30-per-share offer for Warner Bros. Discovery $WBD and refused to raise it, despite repeated board rejections. That stance keeps Netflix $NFLX in the driver’s seat unless $PSKY suddenly sweetens terms or regulators disrupt the process.
🧠 Retail traders pile into AI again: JPMorgan data shows retail buying surged early in 2026, with single-stock demand clustering around familiar AI winners like Tesla $TSLA, Nvidia $NVDA, Amazon $AMZN, Palantir $PLTR, Advanced Micro Devices $AMD, and Micron $MU. The vibe is simple: retail is replaying 2025, not rotating into something new.
📬 Gmail gets an AI inbox: Google $GOOGL unveiled an optional AI-powered Gmail inbox using Gemini to surface priorities, summarize threads, and help users interact with email more like a task manager. Early access is limited to US testers, with broader rollout expected in the coming months.
⚡ Bloom Energy lands a huge power deal: Bloom Energy $BE surged after American Electric Power $AEP expanded an agreement into a $2.65B fuel-cell deal tied to long-duration demand. Bulls viewed it as validation that data center power demand is becoming real, not just a story.
🏥 ACA insurers catch a bid: Health insurers rallied after the House moved toward a vote to extend ACA tax credits that expired at the end of 2025. Names like Oscar Health $OSCR, Molina Healthcare $MOH, Centene $CNC, and UnitedHealthcare $UNH moved higher as investors priced in more stable enrollment and premiums.
🚁 Options traders chase eVTOL defense upside: Call buying surged in Archer Aviation $ACHR and Joby Aviation $JOBY after Trump’s defense budget proposal revived excitement around defense-adjacent aviation. The market is treating military demand as a faster path to real revenue than civilian air taxis.
🍿 Netflix looks set to win WBD: With Paramount Skydance $PSKY refusing to raise its $30 offer and Warner Bros. Discovery $WBD repeatedly rejecting it, the momentum is shifting toward Netflix $NFLX. The main wildcard left is regulatory scrutiny, but the base case is Netflix closes the deal.
📡 BofA lifts target on AST SpaceMobile: AST SpaceMobile $ASTS climbed after Bank of America raised its price target while keeping a neutral rating, saying 2026 could be pivotal for satellite-to-phone connectivity. The bank wants to see constellation execution and proof of paying subscribers before turning fully bullish.
MEDIA
WallStreetBets’ Top Stock Picks Beat the Market in 2025. Here’s What They’re Buying for 2026
January means one thing on Wall Street: everyone suddenly thinks they’re a portfolio manager.
Banks roll out glossy “Top 10 Stocks” lists, strategists publish bold forecasts, and investors nod along politely. Meanwhile, one of last year’s best-performing stock pickers wasn’t a hedge fund or an investment bank. It was a Reddit forum best known for memes, leverage, and questionable risk management.
Yes, that one.
Laugh All You Want, the Returns Were Real
The most popular stock picks on r/WallStreetBets heading into 2025 quietly embarrassed the market.
The group’s top 10 consensus picks posted an average 12-month return of roughly 72%, far outpacing the S&P 500’s 16.39% gain. That’s not a lucky one-off. It’s a reminder that collective retail positioning can matter more than polished pitch decks.
Some of the winners were obvious in hindsight. Alphabet $GOOGL surged about 65%, Advanced Micro Devices $AMD climbed roughly 78%, and Palantir $PLTR ripped higher by around 139%. Others were more classic WallStreetBets fare. Robinhood $HOOD exploded more than 200%, fueled by renewed retail trading activity.
Not every pick worked. Strategy $MSTR was the lone laggard, falling roughly 46%. Even degenerates miss sometimes.
Same Crowd, New Year, New Bets
So what’s on the collective mind for 2026?
Some familiar names are sticking around. Alphabet $GOOGL, Tesla $TSLA, Palantir $PLTR, and Reddit $RDDTremain core holdings among the crowd, signaling continued confidence in big tech, AI-driven software, and platforms tied directly to online communities.
The list also shows how themes are evolving. Space is back, but with a twist. Rocket Lab $RKLB returns for another year, while AST SpaceMobile $ASTS makes its first appearance, reflecting growing excitement around satellite-to-smartphone connectivity.
AI infrastructure continues to dominate thinking. Micron Technology $MU appears as a direct memory play on AI demand, alongside Nebius Group $NBIS, an emerging cloud infrastructure name, and Iren Limited $IREN, which operates data centers tied to high-performance computing.
And because this is still WallStreetBets, big tech never really leaves the room. Amazon $AMZN joins the list as a bet on cloud scale, AI monetization, and consumer resilience.
Why Retail Keeps Punching Above Its Weight
This isn’t just about memes anymore.
Retail traders now move real volume, especially in single stocks tied to clear narratives like AI, space, and platforms with cult-like followings. Options activity, social momentum, and rapid information flow mean retail sentiment can drive price action faster than traditional analysts can react.
That doesn’t mean every Reddit pick will win. It does mean ignoring the crowd outright is no longer a serious strategy.
The Bottom Line
WallStreetBets won’t replace Wall Street, but it doesn’t need to.
When retail consensus lines up behind strong themes, liquidity, and momentum, the results can be hard to ignore. Last year proved that following the crowd isn’t always reckless. Sometimes it’s just early.
And if 2026 looks anything like 2025, the “dumb money” label may be overdue for retirement.
CALENDAR
On The Horizon
Tomorrow
Quiet on the earnings front, but macro is doing all the talking. The Labor Department drops its monthly jobs report today, with payroll growth expected to cool slightly and unemployment projected to edge lower, a combo that could shape near-term rate expectations.
That’s not the only pulse check. The University of Michigan’s early January consumer sentiment read is also on deck, and the Supreme Court is set to release rulings on several major cases, including a closely watched decision on the legality of President Trump’s tariffs.
RESOURCES
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