Happy Thursday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

• 🟩 | US stocks rose Thursday. The S&P 500 hit 5,000 during the trading session but ultimately closed just under the milestone.

• 📈 | One Notable Gainer: Walt Disney's stock surged 11.5% following fiscal Q1 earnings that exceeded expectations, coupled with optimistic 2024 guidance and a 50% dividend hike.

• 📉 | One Notable Decliner: PayPal's shares dropped 11% with its full-year earnings guidance of $5.10 per share missing analysts' $5.48 expectation, despite strong quarterly results.

• 🚗 | Tomorrow's Trade: Stocks That Could Replace Tesla in the Mag Seven. Scroll down for more.

Plus, this company is empowering everyone to build wealth through modern real estate investing.

YESTERDAY’S POLL RESULTS

Which stock do you think will outperform in February?

🟩🟩🟩🟩🟩🟩 Cars.com (CARS)

🟨⬜️⬜️⬜️⬜️⬜️ Insulet (PODD)

🟨🟨🟨⬜️⬜️⬜️ Intuitive Surgical (ISRG)

🟨🟨⬜️⬜️⬜️⬜️ Prologis (PLD)

MARKET MOVERS

Ralph Lauren, Arm Holdings & Hershey

RL: Ralph Lauren's shares rose 16.8% after beating fiscal Q3 earnings and revenue predictions, with $4.17 EPS against the expected $3.54, citing healthy holiday inventory.

ARM: Arm Holdings' US-traded shares surged 47% following a better-than-anticipated quarterly outcome and positive forward guidance.

HSY: Hershey's shares increased 4% after Q4 earnings of $2.02 per share beat the $1.95 estimate, despite below-expectation full-year guidance, and announced a 15% dividend hike.

WYNN: Wynn Resorts' shares jumped over 6% as it reported Q4 adjusted earnings of $1.91 per share, far exceeding the $1.15 analysts expected.

TPR: Tapestry's stock rose 6.5% after the owner of Coach, Kate Spade, and Stuart Weitzman brands surpassed fiscal second-quarter earnings expectations.

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OVERHEARD ON THE STREET

BI: The Magnificent Seven accounted for 45% of January's S&P 500 return, continuing a wild streak of outperformance that carried through all of 2023.

Fox Business: Janet Yellen said, “I don't expect the level of prices to go down. Some prices will be higher than they were before the pandemic, and will stay higher.”

Axios: 69% of people between 13 and 39 years old are more likely to buy from brands they view as trendy.

MW: Perfect Moment Ltd.'s IPO was priced at $6 a share, raising $8 million by offering 1.33 million shares. After the IPO, the company was valued at $91.2 million, with proceeds intended for general corporate purposes.

Bloomberg: Deutsche Bank AG significantly raised its reserves for potential U.S. commercial real estate losses last quarter, citing refinancing as the main risk to the distressed sector.

TOMORROW’S TRADE IDEA, TODAY

Tough Times for Tesla

Not So Magnificent Anymore

The “magnificent seven” are a group of the seven most high-performing, influential stocks on the market. 

Tesla’s (TSLA) membership among them is now being called into question. Some analysts and investors, citing its falling share price and recent announcement that delivery times are lagging, believe there’s cause for its removal. 

Through the first five weeks of 2024, Tesla stock is down 26%.

Disappointing Earnings Call

Tesla announced earnings on Thursday, and included in that announcement was the news that vehicle volume growth is slowing. The EV maker went as far as to say growth could be “notably lower” than last year’s rate.

This caused multiple analysts to cut both their investment ratings and their target prices for the stock. 

Tesla is now only the 10th highest weighted stock in the S&P 500. 29 companies have contributed more to S&P earnings than Tesla, according to Strategas Securities.

The Replacements

Strategas is pointing to three stocks that could take Tesla’s place in the magnificent seven. Those companies consist of Berkshire Hathaway (BRK.B), Broadcom (AVGO) and Eli Lilly (LLY). 

Each of these companies has a higher market cap weighting and earnings contributions for the next 12 months than Tesla. 

Berkshire and Eli Lilly are up 10% YTD, respectively. Broadcom saw its stock price double in 2023 thanks to investor excitement surrounding AI. The stock seems to be riding that wave into 2024, up 10% YTD. 

Tesla may not currently have the makings of a magnificent seven company, but these stocks could offer investors an opportunity for some truly magnificent returns.

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ON OUR RADAR

NYP: Its latest quarterly Office Demand Index (VODI) found that demand for space in the Big Apple rose nearly 40% in 2023 over the previous year — lifting demand to 75% of pre-pandemic times.

Bloomberg: US and European hedge funds' investment in China Evergrande's distressed debt culminated in a costly lesson, as the company's liquidation led to bonds trading at merely 1 cent on the dollar.

YF: There are now hundreds of US-listed firms that trade below a dollar, a majority of which started as special purpose acquisition companies, or SPACs, that went public in the boom time at the height of the pandemic and before a regulatory crackdown triggered a bust.

Bloomberg: Impala Platinum and Anglo American Platinum reported drastic profit drops, over 85% and up to 79% respectively, due to falling metal prices.

Reuters: China's consumer price index (CPI) saw its largest decrease since 2009, falling 0.8% in January year-over-year, deepening from a 0.3% drop in December, signaling deflation risks.

NYT: Three pharmaceutical CEOs will testify before the Senate health committee today on U.S. drug pricing amid confrontations with lawmakers and the Biden administration.