The stock market demonstrated resilience on Wednesday, shrugging off the steep decline of mega-cap Alphabet, and ultimately closing higher.

After the market closed on Tuesday, Google’s parent company Alphabet reported its quarterly earnings, surpassing estimates but falling short of expectations for overall sales and Google Cloud revenue. The tech behemoth also announced plans to invest more in AI than Wall Street had anticipated. Although Alphabet’s stock dropped over 7%, investors quickly turned their attention to other AI-related companies.

Super Micro Computer and Nvidia saw their stock prices rise sharply after Super Micro unveiled its full production capacity for an AI-centric data center utilizing Nvidia’s chips. Super Micro’s shares grew by 8%, and Nvidia increased by 5.35%.

The Nasdaq composite climbed 0.19%, up 38.31 points, to finish at 19,692.33; the S&P 500 moved up 0.39%, or 23.6 points, to reach 6,061.48; and the Dow Jones Industrial Average rose 0.71%, increasing by 317.24 points to 44,873.28. In addition, gold prices surpassed $2,900 per ounce for the first time, while yields on the benchmark 10-year Treasury note fell to 4.428%.

Treasury yields dipped after the Treasury Department announced that the size of upcoming auctions, or supply levels, would remain stable “for at least the next several quarters.” This report boosted Treasury prices and subsequently lowered yields, which typically move in opposite directions.

Concerns About Alphabet’s AI Strategy

Alphabet has revised upward its AI spending projections, but some analysts express unease regarding the financial returns on such hefty investments. This concern arises particularly in light of China’s DeepSeek announcing that it has developed an AI model that competes with ChatGPT and OpenAI for a fraction of the cost.

“While we are witnessing a shift towards less capital-intensive AI due to developments like DeepSeek, Alphabet plans a 43% increase in capital expenditure for 2025,” noted Ben Barringer, a technology analyst at Quilter Cheviot, an investment management firm. “This news is promising for companies like Nvidia, but for Alphabet, there has yet to be a meaningful return on AI investments, which raises the risk of wasted funds vanishing into a void.”

Moreover, Alphabet’s slowing growth in its cloud segment raises “concerns that the company might be lagging behind in the ongoing AI competition,” Barringer added.

Amazon, the online retail giant, is set to announce its earnings on Thursday, and investors will be keenly observing its AI initiatives.

Investors Explore Choices

Despite recent fluctuations, the results from companies published thus far in this earnings season have generally been strong, contributing to overall market stability, analysts observed.

“Companies that have reported their fourth-quarter earnings have exceeded expectations by an average of 5.5% since the season started on January 13,” stated Bank of America analysts in a report. “This is notably better than the 2.5% surprise seen in Q3 and the 3.7% average before COVID. Similarly, revenue surprises stood at 0.9%, outperforming the 0.7% in Q3 and the pre-COVID average.”

Due to these developments, investors are exploring options, with analysts noting, “There isn’t a broad sell-off occurring. Instead, investors are selectively offloading stocks that are directly impacted. This strategy is supported by the wider market breadth we observed in January.”

Deutsche Bank economists also pointed out that “one of the strongest supporting arguments for elevated U.S. stock valuations today is the presence of high corporate profits relative to GDP (gross domestic product),” indicating ongoing economic growth.

Corporate Highlights

Key stock movements on Wednesday included:

• Ride-sharing company Uber reported significantly lower-than-expected quarterly operating income, leading to a 7.56% drop in its stock.
• Chipmaker AMD disclosed that its data center revenue, an indicator of AI-related sales, missed expectations for the last quarter of the year and forecast a sales drop of 7% for the current quarter, causing shares to slide 6.27%.
• Apple’s stock fell 0.14% following a report from Bloomberg News indicating that China’s antitrust regulator may begin investigating the iPhone manufacturer.
• Chipotle exceeded earnings expectations in its most recent quarter, but its same-store sales declined compared to Wall Street’s predictions. The company also adjusted its sales outlook downward, resulting in a 2.56% drop in its stock price.
• Electronic Arts outperformed earnings estimates, leading to a 7.6% increase in its shares.
• Disney delivered earnings above forecasts but reported a decline in subscribers for its Disney+ platform, with expectations for further drops in the upcoming quarter. Disney’s shares fell 2.44%.
• Snap surprised analysts with a profit and sales that exceeded expectations but provided a dim earnings outlook. Its stock tumbled 8.36%.
• Match Group, the parent company of Tinder, appointed a new CEO and reported an earnings miss, leading to a decline of nearly 8% in its shares.
• Mattel experienced a 15.33% surge in its shares, reaching a new 52-week high, following a strong earnings forecast driven by demand for Barbie dolls.
• Ford announced it surpassed quarterly earnings forecasts but anticipated a challenging year ahead, resulting in a 1.5% decline in after-hours trading.
• Qualcomm topped analysts’ projections for earnings in the first three months of its fiscal year and is optimistic about the current quarter, which resulted in a 1.63% increase in its stock during after-hours trading.

Bitcoin Update

Bitcoin saw a slight uptick after David Sacks, the newly appointed AI and crypto advisor for the White House, stated that one of his initial goals would be establishing a regulatory framework for stablecoins. He anticipates that relevant legislation could pass within the next six months.

Stablecoins are types of cryptocurrency that maintain their value pegged to a tangible asset, such as the U.S. dollar.

Sacks also mentioned to CNBC on Tuesday that his task force is exploring the feasibility of a “bitcoin reserve,” an idea previously proposed by President Donald Trump during his campaign.

In a separate announcement, the Securities and Exchange Commission revealed on Tuesday that it is seeking public input to discuss cryptocurrency regulations.

As of now, Bitcoin has dropped 0.72% and is valued at $97,286.84.

Medora Lee is a reporter covering money, markets, and personal finance.