Key Points Nvidia sailed past other large stocks to hit $5 trillion in value last week. The 10 largest stocks on the market make up about 30% of the S&P 500. It's important to have a diversified portfolio to mitigate potential risk. 10 stocks we like better than Nvidia › After years of quiet, solid gains, Nvidia (NASDAQ: NVDA) stock has had a breathless ascent over the three years, climbing nearly 1,400%. It flew past Apple and Microsoft to become the most valuable company in the world, reaching ...

Group 1 - The stock of Palantir has experienced a significant increase of approximately 18% over the previous eight trading days before the earnings report, but has since been sold off despite good earnings and guidance [1] - Comparisons are being made between the current AI stock situation and the internet bubble of the late 1990s, suggesting that corrections in the market could be a healthy development [2][4] - Historical context indicates that corrections, such as a nearly 19% drop in 1998, are not unusual and may occur as the AI market continues to inflate [3] Group 2 - Prominent bank CEOs, including those from Goldman Sachs and Morgan Stanley, are warning about a potential bubble in the AI sector [4] - There are references to past financial crises, with some analysts drawing parallels to the 2007-2008 financial crisis related to the real estate market, indicating a cautious outlook on AI investments [6] - The current economic environment is characterized as a "jobless AI boom," where major tech companies are cutting jobs while still reporting strong profits, leading to concerns about economic bifurcation [8][9]

Market Overview - The U.S. stock market experienced a downturn, with major indices like the S&P 500 and Nasdaq showing negative futures [1] - The Dow Jones Industrial Average fell 0.5% to 47,085.24, the S&P 500 dropped 1.2% to 6,771.55, and the Nasdaq decreased 2.04% to 23,348.63 [2] Company Performance Advanced Micro Devices Inc. (AMD) - AMD reported third-quarter revenue of $9.25 billion, exceeding analyst expectations of $8.74 billion [3] - Adjusted earnings per share were $1.20, surpassing estimates of $1.16, driven by growth in the AI data center business [3] - AMD shares fell 3.70% to close at $250.05, with after-hours trading showing a further decline of 4.7% to $238.20 [2] Super Micro Computer, Inc. (SMCI) - Super Micro Computer reported earnings of 35 cents per share, missing the expected 40 cents, leading to a stock decline [4] - Quarterly revenue was $5.01 billion, below analyst estimates of $5.99 billion and down from $5.93 billion a year earlier [4] - The stock dropped 6.40% to $47.50, with after-hours trading showing a decline of 9.5% to $42.99 [3] Upstart Holdings, Inc. (UPST) - Upstart reported earnings of 52 cents per share, beating the estimate of 42 cents, but revenue fell short of expectations [6] - The company projected fourth-quarter revenue of $288 million, below the $303.61 million analyst estimate, and cut its fiscal 2025 revenue outlook to $1.03 billion from $1.05 billion [6] - Shares slid 2.73% to $46.24, plummeting 15.3% to $39.15 in extended trading [5] Pinterest Inc. (PINS) - Pinterest reported third-quarter revenue of $1.05 billion, aligning with analyst estimates, but adjusted earnings of 38 cents per share missed the expected 42 cents [8] - The company forecasted fourth-quarter revenue between $1.31 billion and $1.34 billion, slightly below estimates of $1.34 billion [8] - Shares decreased by 2.39% to $32.91, dropping sharply by 20.09% to $26.30 in after-hours trading [7] Rivian Automotive (RIVN) - Rivian reported third-quarter revenue of $1.56 billion, up 78% year-over-year and above the $1.50 billion estimate [11] - Automotive revenue rose 47% to $1.14 billion, while software and services revenue surged 324% to $416 million [11] - The stock fell 5.23% to $12.50, but gained 3.2% to $12.90 in extended trading [10]

Market Trends & Investment Opportunities - The AI boom has caused stocks like Nvidia and Palantir to soar [1] - Concerns exist that these AI stocks may have risen excessively [1] - Hedge fund manager Michael Burry is betting against Nvidia and Palantir, anticipating a downturn in the AI trade [1] Risk Assessment - The report discusses potential "frothiness" in the AI trade [1] - Investors should be concerned about the sustainability of the AI stock rally [1]

Market Overview - The Dow Jones Industrial Average closed down 251.44 points (-0.53%) at 47085.24 on November 4th, 2025, primarily due to profit-taking in the technology and AI sectors and concerns over high valuations [1][2] - Prominent Wall Street bank CEOs issued warnings about a potential market correction, adding to the negative sentiment in equities [1] Sector Performance - The reassessment of tech valuations led to profit-taking, particularly affecting AI companies, with Palantir Technologies (PLTR) experiencing a share price decline despite strong quarterly results [2] - The healthcare sector also showed weakness, impacting the overall performance of the Dow [2] Individual Stock Movements - The Travelers Companies (TRV) was the biggest gainer among the Dow components, rising 2.40%, followed by Merck & Co., Inc. (MRK) at 1.08% and Goldman Sachs Group Inc. (GS) at 0.74% [3] - Conversely, NVIDIA Corp. (NVDA) led the declines with a drop of -3.41%, followed by Boeing Company (BA) at -3.35%, Caterpillar Inc. (CAT) at -3.10%, and Salesforce, Inc. (CRM) at -2.93% [3]

Core Viewpoint - Advanced Micro Devices (AMD) forecasts fourth-quarter revenue exceeding market estimates, driven by the expansion of data center infrastructure and increased demand for AI chips [1][2]. Financial Performance - AMD expects fourth-quarter revenue of approximately $9.6 billion, with a variance of $300 million, surpassing analysts' average estimate of $9.15 billion [3]. - The company reported third-quarter sales of $9.25 billion, exceeding analysts' average estimate of $8.74 billion [4]. Market Dynamics - AMD's data center segment, which includes AI chips, saw a revenue increase of 22% to $4.3 billion in the September quarter, outperforming estimates of $4.09 billion [5]. - The client segment, catering to the personal computer market, experienced a 46% revenue increase to $2.8 billion in the third quarter [6]. Investment Trends - Significant investments in AI hardware have been made by companies like OpenAI and the U.S. Department of Energy, indicating continued spending on advanced processors [2]. - Major tech companies are heavily investing in AI hardware, with a notable portion directed towards chips, benefiting suppliers like AMD [5]. Competitive Landscape - AMD is gaining market share in the server CPU market against Intel, driven by the increased demand for server CPUs alongside AI GPUs [6]. - Microsoft reported a record capital expenditure of nearly $35 billion for its fiscal first quarter, with approximately half allocated to chips, highlighting the strong demand for AMD's products [5].

Market Performance - The S&P 500 ended October with a 1.9% increase, marking its sixth consecutive monthly gain, the longest stretch in four years [1][2] - The index continued its upward momentum into November, adding approximately 0.18% on the first Monday of the month [1] Economic Outlook - Progress in the U.S.-China trade agreement, the Federal Reserve's interest rate cut in October, and rising AI demand contribute to a positive outlook for the U.S. economy [2] - Despite the optimistic economic picture, underlying volatility risks remain, suggesting a cautious approach may be prudent [2][5] Volatility Concerns - Ongoing government shutdown, diminishing expectations for a December rate cut, and worries about a potential AI bubble may increase market volatility [3][4] - The sustainability of the U.S.-China trade truce is questioned, adding to investor anxiety [3] Market Predictions - Goldman Sachs and Morgan Stanley predict a potential 10-20% market pullback within the next 12 to 24 months, which is typical in long-term bull markets [6][7] - Both firms emphasize that periodic pullbacks should be viewed as healthy market corrections rather than crises [8] Investment Strategies - Investors are advised to adopt a defensive and conservative investment theme to navigate potential market turbulence [9] - Increasing allocations toward defensive funds while maintaining exposure to growth-oriented investments may be a sound strategy [10] ETF Recommendations - Value ETFs, characterized by solid fundamentals and trading below intrinsic value, have shown positive performance, with the S&P 500 Value Index gaining 7.52% year to date [12] - Consumer staple ETFs provide stability, with the S&P 500 Consumer Staples Index up 3.20% year to date, making them a good option for risk-averse investors [13] - Quality ETFs are recommended as a strategic response to market uncertainty, offering a buffer against potential headwinds [14] Investment Strategies for Stability - Passive, long-term strategies such as buy-and-hold or dollar-cost averaging are suggested to help investors navigate potential pullbacks while positioning for sustainable returns [15][16]

Alex, we've heard a lot of talk from the likes of a Michael Bur, but more broadly about whether we're in an AI bubble, whether the economics make sense. Clearly, in the context of Palunteer, uh they do make sense in so far as you you're you're printing money over there. Um not everybody in the AI space is printing money in the same way, and they're spending an enormous amount um on chips, data centers, and the like.How do you see the broader space right now in terms of just how things are are are developing ...

Group 1 - The AI market is experiencing varied financial success, with some companies like Palunteer generating significant profits while others struggle with high expenditures on infrastructure [1][4] - The addressable market for AI is crucial, particularly focusing on segments that yield quantifiable financial returns, either commercially or in practical applications [2][3] - The concept of "trader optimality" is essential, where every part of the AI value chain must create more value than it charges, otherwise it risks being labeled a bubble [3][4] Group 2 - The relationship between AI advancements and GDP growth is complex, with a focus on "worker available GDP" and how AI can enhance productivity for workers [5][6] - There is a societal concern regarding whether the benefits of AI will be equitably distributed, as the average American perceives AI's growth but questions its personal impact [7][8] - Proving that AI growth translates to tangible benefits for workers is critical for societal acceptance and stability [8]

Core Insights - OpenAI has signed a significant $38 billion agreement with Amazon to utilize AWS for its AI workloads over the next seven years [1] - Following the announcement, Amazon's stock price increased by 4%, indicating investor optimism about the AI industry's growth potential [2] - OpenAI's partnerships with major tech companies, including Microsoft, Oracle, and Google Cloud, are part of a broader strategy to expand its AI capabilities [5] Company Analysis - OpenAI's aggressive spending strategy includes plans to invest over $1.4 trillion in infrastructure, which raises concerns about the sustainability of its growth given its estimated annual revenue of approximately $13 billion [6] - The AI industry faces challenges such as a shortage of skilled labor in the U.S. and potential limitations in the power grid's capacity to support rapid growth [7][8] - Despite these challenges, Bain & Company projects that North America will account for about half of global data center capacity by 2030, driven by capital expenditures from hyperscalers [9] Investment Opportunities - Investing in ETFs with significant exposure to Amazon may provide a diversified approach to mitigate risks associated with individual stock volatility [3][4] - Three ETFs highlighted for their exposure to Amazon include: - ProShares Online Retail ETF (ONLN), with Amazon comprising 27.20% of the fund and a year-to-date increase of 35.8% [12][13] - Vanguard Consumer Discretionary ETF (VCR), with Amazon at 21.54% and a year-to-date rise of 7% [14] - Consumer Discretionary Select Sector SPDR Fund (XLY), where Amazon holds 24.37% and has increased by 8.6% year to date [15][16]