Amazon (AMZN) will release its third-quarter 2025 financial results on Thursday, Oct. 30. Despite being one of the top players in the cloud and e-commerce spaces, Amazon stock has underperformed the broader markets and its big tech peers so far in 2025. So far in 2025, Amazon shares have risen just 3.9%, a negligible increase compared with the S&P 500 Index’s ($SPX) 16.5% advance. The gap looks even wider next to other tech heavyweights as Microsoft (MSFT) stock has surged about 25.8% year-to-date, while ...

Core Viewpoint - The individual investor adopts a contrarian investment style, focusing on deep value opportunities, particularly in stocks that have recently experienced sell-offs due to non-recurrent events, while also considering insider buying as a positive signal [1] Investment Strategy - The investment portfolio is split approximately 50%-50% between shares and call options, indicating a balanced approach between equity and derivatives [1] - The investor's timeframe for holding positions typically ranges from 3 to 24 months, suggesting a medium-term investment horizon [1] - Fundamental analysis is employed to assess the health of companies, including their leverage and financial ratios compared to sector and industry averages [1] - Technical analysis is utilized to optimize entry and exit points, with a focus on support and resistance levels on weekly charts [1] Stock Selection Criteria - Preference is given to stocks that have undergone a recent sell-off, particularly when there is insider buying at the new lower price, indicating potential recovery [1] - The investor screens through thousands of stocks, primarily in the US, but is open to owning shares in less stable markets, referred to as "banana republics" [1] - Professional background checks are conducted on insiders who purchase shares post-sell-off to ensure credibility and alignment with shareholder interests [1]

[Music] Hello and welcome to Morning Brief Market Sunrise. I'm Ramsan Karamali live from Yahoo Finance Studios in London. It's Monday 27th October. It's a big tech earnings week coming up on the show. So the US and China agree on a framework for a trade deal. Then there were five. Trump says he could name his next Fed chair before year end. and I'll tell you about a stock that's up nearly 900% in just six months. So, grab your coffee and let's own the morning. [Music] Well, the first thing you need to know ...

Core Insights - The focus of Wall Street is shifting from traditional metrics like revenue and profit to capital expenditure, particularly in light of the AI investment plans by major tech companies [1][2] - The upcoming earnings reports from Microsoft, Alphabet, Meta, Amazon, and Apple will provide insights into how these companies are positioning themselves in the AI landscape [1][2] - The competition for AI capabilities is driving significant capital investments, with OpenAI leading a $1 trillion infrastructure plan that sets a high benchmark for the industry [2] Group 1: Capital Expenditure Trends - Major tech companies are expected to increase their capital expenditures significantly, with Morgan Stanley predicting a 24% growth to nearly $550 billion next year [2] - Microsoft anticipates a capital expenditure of $30 billion for the current quarter, with a year-over-year growth rate exceeding 50% [4] - Alphabet has raised its capital expenditure forecast for the year from $75 billion to $85 billion, with plans for further increases in 2026 [5] Group 2: Company-Specific Plans - Meta has increased its 2025 capital expenditure forecast by $1 billion to $69 billion, emphasizing the role of AI infrastructure in enhancing advertising capabilities [6] - Amazon plans to spend over $100 billion on capital expenditures this year, with a focus on chips, data centers, and logistics [7] - Apple’s capital expenditure for fiscal year 2024 is projected at $9.4 billion, with a strategy of leasing cloud services rather than operating its own [8]

Market Overview - U.S. equity markets opened with strong momentum, with the Dow Jones Industrial Average (DJIA) rising by 316.26 points (0.67%) to 47,523.38, the Nasdaq (NDAQ) increasing by 339.14 points (1.46%) to 23,544.00, and the S&P 500 (SPX) advancing by 63.85 points (0.94%) to 6,855.54 shortly after the market opened [2][9]. Global Economic Developments - Argentina's peso experienced a significant 10% increase following President Milei's midterm election victory, indicating positive market sentiment towards his administration's policies [3][9]. - Trade relations between major economies are under strain, with China's Commerce Ministry asserting its commitment to defend the rights of Chinese firms against the UK, which has taken actions against 11 Chinese companies. The WTO Director-General acknowledged the validity of U.S. criticisms regarding the multilateral trading system [4][9]. Investor Sentiment - Investor behavior reflects a bullish outlook, as fund managers are holding their lowest cash allocation in over a decade, suggesting a strong appetite for risk and confidence in continued market growth. This sentiment is mirrored in Germany, where business confidence has improved, reaching its highest level since the Russian invasion of Ukraine, largely due to government spending plans [5][9]. Corporate News - Amazon's robotics team is working towards automating 75% of its operations, highlighting a significant push for technological integration and efficiency within the company [6][9]. - General Electric Aerospace has extended its service contract with RAN, including options for an additional 10 years, securing a long-term partnership [6]. - Novartis' CEO expressed confidence in the Avidity deal, indicating a strategic move for the pharmaceutical giant [7].

Group 1 - The US stock market, particularly technology stocks, is showing bullish signals following constructive trade discussions between the US and China in Kuala Lumpur [1][2] - Futures linked to the Dow Jones, S&P 500, and Nasdaq indices rose by 0.6%, 0.7%, and 1.0% respectively on October 26, indicating a positive market sentiment [1][2] - A recent survey revealed that nearly half (47%) of professional investors are optimistic about the US stock market's outlook for 2026, a significant increase from 28% in the spring survey [2][3] Group 2 - The S&P 500 index reached a historic high on October 24, and the market continued to rebound due to favorable signals [2] - The upcoming Federal Reserve interest rate decision on October 29 is anticipated to result in another rate cut, which is expected to benefit major tech companies like Apple, Microsoft, and Amazon [2][4] - The survey conducted by Erdos Media Research and Barron's involved 122 fund managers and investment strategists, indicating a strong correlation between the recent market performance and the return of bullish sentiment [3] Group 3 - Fund managers predict a continuation of the upward trend until the end of 2026, with expected gains of 9% to 10.5% for major indices driven by corporate earnings growth and advancements in AI technology [4][5] - Approximately 38% of respondents expect S&P 500 earnings per share to grow by 6% to 10%, while 13% predict growth exceeding 10% [4] - Concerns about high stock valuations persist, with 57% of top fund managers believing the current market is overvalued, and 38% anticipating a bear market within the next 12 months [5][6] Group 4 - Nearly 60% of respondents have increased investments in non-US assets, reflecting a broader market strategy [6] - The majority (57%) of respondents view the current Federal Reserve policy stance as appropriate, with expectations for continued rate cuts [6][7] - There is a division of opinion regarding the next Federal Reserve chair, with support for candidates who advocate further rate cuts [7]

Mag7 Earnings Week!Five of the Mag7 stocks will release their earnings from tomorrow.🔹 $AAPL🔹 $MSFT🔹 $META🔹 $AMZN🔹 $GOOGLWhich ones are you watching? https://t.co/IM6Ap5xwRE ...

Core Viewpoint - The upcoming earnings reports from major tech companies raise concerns about whether the current AI hype is leading to a new bubble, despite strong revenue growth expectations [1] Group 1: AI Investment and Returns - Major cloud service providers, including Microsoft, Alphabet, Amazon, and Meta, are expected to invest $400 billion in AI infrastructure this year, but the return on investment remains uncertain [1] - A widely cited MIT study indicates that only about 5% of over 300 analyzed AI projects have achieved measurable benefits, with many remaining in pilot stages due to integration and scalability challenges [1] Group 2: Systemic Risks from Circular Trading - Circular trading reminiscent of the 1990s internet bubble is raising systemic risk concerns, with Nvidia potentially investing $100 billion in OpenAI, which has signed a $1 trillion AI computing deal without clear financing details [2] - Debt financing is becoming increasingly important for large tech companies' AI infrastructure investments, differing from past investment cycles [2] - When companies mutually finance and depend on each other, decision-making may shift from genuine demand to reinforcing growth expectations, increasing systemic risk [2] Group 3: Cloud Business Growth and Profitability - Despite bubble concerns, Amazon, Microsoft, and Google are expected to report strong growth in their cloud computing divisions, although capacity constraints limit their ability to meet AI demand [3] - Microsoft Azure is projected to grow by 38.4%, surpassing Google Cloud's 30.1% and Amazon Web Services' (AWS) 18% growth expectations [3] - While AWS remains the largest player, it faces scrutiny after service outages affected popular applications, and profit growth for these companies is expected to slow due to rising costs [3] Group 4: Investor Sentiment on Application Rates - Some investors believe that beneath the bubble, real value is emerging, citing double-digit revenue growth and strong cash flow as indicators of healthy balance sheets for tech giants [4] - Eric Schiffer, CEO of Patriarch Organization, argues that low current application rates are not indicative of future potential, suggesting that increased investment and model innovation will drive growth [4] Group 5: Industry Maturity Concerns - Andrej Karpathy, co-founder of OpenAI and former AI lead at Tesla, expressed concerns about the overall immaturity of AI models, suggesting that the industry is overestimating its advancements [5]

Core Insights - The third quarter earnings season is entering a critical phase with several major tech companies set to report results [1] - As of October 24, 29% of S&P 500 companies have reported earnings, with an expected 9.2% increase in earnings per share for Q3, marking the ninth consecutive quarter of positive growth but a slowdown from the 12% growth in Q2 [2][3] Group 1: Earnings Performance - The earnings season has started positively, with analysts initially expecting a 7.9% increase in earnings per share for S&P 500 companies [3] - If the expected 9.2% increase holds, it indicates a deceleration in growth compared to previous quarters [2] Group 2: Key Companies Reporting - This week, five of the "Magnificent Seven" tech companies—Microsoft, Alphabet, Meta, Apple, and Amazon—will report their earnings, collectively representing about 25% of the S&P 500 [4] - Other significant companies reporting this week include Boeing, Visa, Starbucks, UnitedHealth Group, Verizon, Mastercard, Merck & Co., Shell, Exxon Mobil, Chevron, Coinbase, Caterpillar, ServiceNow, Anheuser-Busch InBev, and Eli Lilly [5]

Group 1 - The article highlights the upcoming "Super Central Bank Week" and "Super Earnings Week," indicating a significant period for the market [1] - The U.S. CPI report for September shows a year-on-year increase of 3%, which has led to heightened expectations for two rate cuts by the Federal Reserve in October and December [1] - The CME FedWatch Tool indicates a 96.7% probability that the Federal Reserve will cut rates by 25 basis points in the upcoming meeting [1] Group 2 - Five major tech companies, including Microsoft, Alphabet, Meta, Apple, and Amazon, are set to release their earnings reports this week [1] - These five companies collectively account for approximately 45% of the Nasdaq 100 index and nearly 25% of the S&P 500 index [1] - Significant investments in AI infrastructure by these tech giants have reached several hundred billion dollars, with analysts suggesting that it is now time for investors to see tangible returns [1]