Core Insights - AMD's stock performance has been stable, with shares slightly higher after reporting earnings that exceeded expectations, but investors are focused on margins and AI growth potential [1][2][3] Financial Performance - AMD reported a solid earnings beat and is guiding for 25% revenue growth in Q4, which is better than consensus but below some investors' aggressive expectations [3] - The legacy PC chip business continues to drive sales, with its revenue more than triple that of data center growth [4] AI Business Outlook - AMD has secured significant partnerships with OpenAI, Oracle, and the US Department of Energy, which are expected to scale its AI business into the tens of billions, but not until 2027 [3] - There are concerns regarding the profitability of AMD's new AI business, as gross margins were in line for both Q3 and Q4, raising questions about future revenue from AI [5] Market Context - AMD faces challenges with China exports not contributing to current results, and the upcoming investor day is anticipated to provide more insights [5] - The competitive landscape shows AMD trailing behind rivals in the AI chip market, with Qualcomm and Nvidia set to report earnings soon [5][6] Industry Trends - OpenAI's enterprise business has reached 1 million business customers, with significant growth in paid seats for ChatGPT enterprise, indicating a strong demand for AI solutions [6][7] - The question remains about when the substantial AI revenue will materialize, as current earnings reports do not reflect the anticipated growth from AI partnerships [9][10]

Group 1: AI Investment Landscape - OpenAI's recent AI browser release may further accelerate capital expenditures in the ongoing AI arms race [1] - A Harvard economist estimates that 92% of US GDP growth in the first half of 2025 is attributed to AI investment [2] - The connection between AI investment and the advertising technology (Ad Tech) industry needs further exploration [3] Group 2: Advertising Business Models - The internet infrastructure has been designed over the past 25 years to maximize advertising revenue, with Google, Meta, and Amazon leading the way [4] - These companies have utilized AI to enhance their advertising models, increasing engagement and predicting consumer behavior [5] - The advertising revenues of these major companies are being reinvested into infrastructure at unprecedented levels [5] Group 3: Disruption Potential of AI - The latest AI advancements could disrupt the advertising business models that currently support trillions in market capitalization [6] - Google, Meta, and Amazon are heavily investing in AI despite the potential risks to their existing business models, aiming for breakthroughs like Artificial General Intelligence [7] - There is an urgent need to protect or disrupt the advertising model before competitors do, as highlighted by Sam Altman's comments on misaligned AIs [8]

Core Opinion - There is a growing belief that shorting the entire AI sector may be a viable strategy due to the lack of monetization and sustainability in the business model, as most users do not pay for AI services [1][3][18] Industry Insights - The AI sector is characterized by significant investments, with trillions of dollars spent on infrastructure, data centers, and training models, yet the majority of users are not paying customers [3][4][19] - Companies that build specialized AI tools for specific industries, such as law, healthcare, and logistics, are seen as having better monetization potential compared to foundational AI builders [2][14] - A McKinsey study supports the notion that future AI monetization will rely on targeted, value-based services rather than broad, free offerings [2] Market Concerns - The current state of the AI market resembles a bubble, with hedge funds and analysts expressing concerns over inflated valuations, particularly in companies like Nvidia [3][7] - Reports indicate that AI monetization is still in its early stages, with consumer AI struggling to find sustainable revenue models and high infrastructure costs [3][19] - The prevailing business model of offering AI services for free is unsustainable, as historical precedents show that successful businesses typically require a substantial number of paying customers [5][18] Future Projections - The potential for an AI collapse is highlighted, as the inability to charge for AI services could lead to significant financial challenges for companies in the sector [18][20] - Companies that can adapt AI applications for specific business needs and charge for those services are projected to be more successful in the long run [14][19]

With all the risks facing investors these days — from high valuations in the stock market to worries about an AI bubble and beyond — some might be tempted to stick their cash under the mattress. ...

A mixed start is predicted for Wall Street stocks on Wednesday, as investors continue to disagree about valuations for big tech stocks, particularly those focused on the AI market.  Nasdaq and S&P 500 futures were down 0.2% and 0.1% respectively, both off lows seen in the early hours, while Dow Jones futures were up 0.1%. The day before, the Nasdaq Composite dropped 2%, with Nvidia and Palantir Technologies among the biggest fallers, the latter sliding 9% despite reporting earnings that beat analyst expecta ...

Market Overview - The S&P 500 is currently only 2% below record highs, indicating a strong market performance recently [1] - The S&P 500 has risen 15% year-to-date, with November historically being a strong month for the market [2] Concentration Risk - The S&P 500 is heavily concentrated, with 40% of its value derived from the top 10 companies, raising concerns about concentration risk [2] - Small-cap stocks have shown weakness recently, while the equal-weight S&P 500 index is lagging behind [4] AI and Market Dynamics - There are concerns regarding the sustainability of the AI sector's growth, with potential pullbacks in AI infrastructure spending affecting market performance [3] - The overall market is being led by a few key names, which may lead to profit-taking as valuations become elevated [5][10] AMD Performance - AMD reported strong earnings, beating EPS expectations of $1.20 with $1.17 and raising revenue guidance to a midpoint of $9.6 billion [7] - The gaming division generated $1.3 billion, exceeding expectations, while the data center revenue increased over 22% to $4.3 billion [9] - Despite positive results, concerns about margins not meeting expectations and elevated valuations may lead to profit-taking [8][10] Analyst Sentiment on AMD - Analysts have raised their price targets for AMD, with Rosenblatt increasing it to $300 and Stifel raising it to $280, indicating continued confidence in the stock [11] AET Performance - AET is under pressure due to lighter-than-expected guidance despite a 40% increase in stock price this year [12] - Earnings rose 25% to $0.75, and revenue climbed 27% to $2.308 billion, but the guidance for Q4 revenue is in line with consensus, which may be a concern [13][14]

[Music] Hello and welcome to Morning Brief Market Sunrise. I'm Raman Carmali live from Yahoo Finance Studios in London. It's Wednesday, 5th November.Coming up on the show, global stocks continue to slide after Wall Street's tech selloff. The current government shutdown is now the longest on record. And New York has a new mayor.>> This is not only how we stop Trump, it's how we stop the next one. So, Donald Trump, since I know you're watching, I have four words for you. Turn the volume up.[Music] Well, the f ...

[Music] Hello and welcome to Morning Brief Market Sunrise. I'm Raman Carmali live from Yahoo Finance Studios in London. It's Wednesday, 5th November.Coming up on the show, global stocks continue to slide after Wall Street's tech selloff. The current government shutdown is now the longest on record. And New York has a new mayor.>> This is not only how we stop Trump, it's how we stop the next one. So, Donald Trump, since I know you're watching, I have four words for you. Turn the volume up.[Music] Well, the f ...

Core Viewpoint - The iShares Semiconductor ETF (SOXX) and the VanEck Semiconductor ETF (SMH) experienced a significant decline, losing over $500 billion in value due to disappointing earnings from major companies in the semiconductor sector [1] Group 1: ETF Performance - The iShares Semiconductor ETF (SOXX) and the VanEck Semiconductor ETF (SMH) faced a harsh reversal this week [1] - Major companies within these ETFs contributed to the overall loss of over $500 billion in market value [1] Group 2: Earnings Impact - Key earnings reports from top semiconductor companies were pivotal in triggering the decline [1] - The negative earnings results led to a substantial decrease in investor confidence in the semiconductor sector [1]

On the trade front, China’s Customs Tariff Commission of the State Council announced on Wednesday that it will extend the suspension of a 24% tariff on some U.S. goods for another year while keeping a 10% duty in place, as part of the trade truce agreed at last month’s Trump-Xi summit. The commission also stated that it would lift tariffs of up to 15% on certain U.S. agricultural products. In addition, China will remove export controls against 15 U.S. entities and extend the suspension of such measures for ...