Amazon Backing Remains Strong While Microsoft Powers AI Growth

The artificial intelligence sector presents a mixed bag of investor sentiment and significant infrastructure demands, as evidenced by recent market movements and corporate developments. Baidu's stock experienced a notable drop of almost 10% in Hong Kong after the unveiling of its new AI model, Ernie 5.0, which failed to impress investors and raised concerns about its competitiveness and high market valuations. This contrasts with more optimistic outlooks for other specialized AI firms. SoundHound AI, a US voice AI company, received a 'Moderate Buy' rating from analysts, with one predicting over 95% growth potential and a $26 price target, driven by expectations of more than 40% revenue growth by 2026 and a clear path to profitability. Similarly, Nextech3D.ai is entering a growth phase, expanding its Event-Tech business through the acquisition of Eventdex and reporting three consecutive quarters of revenue growth since ending a contract with Amazon.com, Inc. The company anticipates significantly shrinking its EBITDA losses by fiscal year 2027. The burgeoning demand for AI is also placing immense pressure on energy infrastructure. AI data centers are projected to require an additional 60 to 120 gigawatts of electricity by 2030. Companies like Constellation Energy, the largest nuclear fleet operator in the US, are stepping up, securing multi-year deals with major tech players such as Microsoft and Meta Platforms. Vistra, which combines nuclear, gas, and battery power, is expanding its capacity, while Quanta Services builds essential high-voltage transmission and substations, reporting record revenue and a substantial project backlog. In the broader tech landscape, Tencent saw its advertising revenue grow by 21% due to an improved ad model and new automated tools. The company also confirmed it possesses sufficient chips for its internal needs and secured a new agreement with Apple, allowing it to earn 15% from in-app purchases in WeChat mini-games on iOS. Meanwhile, investment strategies are evolving. Jim Cramer, while still supporting strong tech companies like Amazon and Microsoft, suggests the AI stock rally has become risky. He notes positive signs in inflation with falling prices for used cars, rent, and energy, expecting a Federal Reserve interest rate cut soon. This shift in sentiment is also visible in Europe, where investors are moving funds from AI stocks into healthcare, boosting companies like Novo Nordisk, Zealand Pharma, and Gubra. Looking ahead, JPMorgan strategists predict a record $1.8 trillion in bond sales for 2026, surpassing the 2020 record, driven by corporate refinancing, mergers and acquisitions, and substantial spending on AI technology. For investors seeking exposure to AI, the Roundhill Generative AI and Technology ETF offers an accessible option, including major players like Nvidia, Alphabet (Google), and Microsoft, having jumped an impressive 150% since its inception in May 2023.

Key Takeaways

• Baidu's Ernie 5.0 AI model disappointed investors, causing its stock to drop nearly 10% in Hong Kong due to a lack of differentiation from competitors.
• SoundHound AI received a 'Moderate Buy' rating, with an analyst predicting over 95% growth potential and a $26 price target, expecting over 40% revenue growth by 2026.
• Nextech3D.ai shows strong growth in its Event-Tech and 3D modeling platforms, reporting three consecutive quarters of revenue growth after ending its Amazon.com, Inc. contract.
• AI data centers are projected to demand an additional 60 to 120 gigawatts of electricity by 2030, benefiting energy providers like Constellation Energy, which has deals with Microsoft and Meta.
• Tencent's advertising revenue grew by 21%, and it secured a 15% share from in-app purchases in WeChat mini-games on Apple's iOS platform.
• Jim Cramer advises caution on the general AI stock rally, though he continues to support strong tech companies such as Amazon and Microsoft.
• Investors are shifting some capital from AI stocks to European obesity drug companies like Novo Nordisk and Zealand Pharma.
• JPMorgan strategists predict record $1.8 trillion bond sales in 2026, partly driven by significant spending on AI technology.
• The Roundhill Generative AI and Technology ETF, which includes Nvidia, Alphabet (Google), and Microsoft, has jumped 150% since its May 2023 launch.

Baidu Stock Drops After Ernie 5.0 AI Model Disappoints Investors

Baidu's stock dropped almost 10% in Hong Kong after it showed off its new AI model, Ernie 5.0. Investors were not impressed by the latest upgrade, causing disappointment despite the stock's earlier gains this year. Analyst Robert Lea from Bloomberg Intelligence noted that Ernie 5.0 does not stand out from competitors. This lack of a wow factor adds to concerns about high costs and valuations in the global AI market, making Baidu's future earnings outlook challenging.

Baidu Stock Falls After New Ernie 5.0 AI Model Unveiled

Baidu's shares, traded as BIDU, fell on Friday after the company introduced its new AI model, Ernie 5.0, at a conference. The stock dropped by as much as 9.8% in Hong Kong. Investors were not impressed by the new model.

SoundHound AI Stock Could Jump 95 Percent Says Analyst

SoundHound AI, a US voice AI company, received a Moderate Buy rating from analysts after its Q3 results. An analyst from Wainwright is very positive about SOUN's future, seeing over 95% potential growth. The company expects its revenue to grow by at least 40% by 2026, which is more than market predictions. SoundHound AI is also moving closer to making a profit, with better margins and a clear plan for positive EBITDA. The analyst set a high price target of $26 for the stock.

Nextech3D.ai Shows Strong Growth in Event Tech and 3D Revenue

Nextech3D.ai is set for a growth phase, with an analyst firm keeping a Buy rating and a C$0.25 price target. The company expanded its Event-Tech business by acquiring Eventdex, now managing over 500 annual events. Both its 3D modeling and event platforms show high profit margins. Nextech3D.ai has also seen three straight quarters of revenue growth after ending a contract with Amazon.com, Inc. The company expects its EBITDA losses to shrink significantly by fiscal year 2027.

Three Energy Stocks Poised to Power the AI Boom

The growing demand for AI data centers will require 60 to 120 gigawatts of extra electricity by 2030, putting pressure on power companies. Constellation Energy, the largest nuclear fleet operator in the US, is a key player, signing multi-year deals with companies like Microsoft and Meta Platforms. Vistra combines nuclear, gas, and battery power, expanding its capacity to meet rising demand in key markets. Quanta Services builds essential high-voltage transmission and substations, reporting record revenue and a large backlog of projects. These companies are crucial for providing the energy infrastructure needed for AI's expansion.

Tencent Sees Strong Ad Growth and New Mini-Game Earnings

Tencent's advertising revenue grew by 21%, thanks to an improved ad model and new automated tools that boost targeting. The company confirmed it has enough chips for its own use, easing concerns about US chip restrictions. International games revenue also jumped by 43%. Morningstar believes Tencent's shares are undervalued, with advertising offering major growth potential, especially with closed-loop ads in WeChat. A new agreement with Apple will allow Tencent to earn 15% from in-app purchases in WeChat mini-games on iOS, creating a new, profitable income source.

Jim Cramer Suggests Non-Tech Stocks as AI Trade Slows

Jim Cramer and Jeff Marks discussed investing strategies at the CNBC Investing Club's November meeting. Cramer noted that the AI stock rally has become risky, though he still supports strong tech companies like Amazon and Microsoft. He believes the economy is weakening, but inflation shows positive signs with falling prices for used cars, rent, and energy. Cramer expects the Federal Reserve to cut interest rates by a quarter-point soon. He also highlighted Boeing as his favorite stock, predicting it will generate significant cash flow and pay down debt under its new CEO, Kelly Ortberg.

European Obesity Drug Stocks Rise as Investors Shift from AI

European companies making weight-loss drugs are seeing a comeback as investors move money from AI stocks into healthcare. Companies like Novo Nordisk, Zealand Pharma, and Gubra have seen their shares jump. Analysts believe this is a good buying opportunity, as these stocks had lagged behind US peers. Novo Nordisk has important events coming up, including trial results for semaglutide in Alzheimer's and an FDA decision on its Wegovy pill. Zealand Pharma also rose after deciding to pause development of a new obesity medicine, dapiglutide, due to a crowded market.

JPMorgan Predicts Record 1.8 Trillion Dollar Bond Sales in 2026

JPMorgan strategists Nathaniel Rosenbaum and Eric Beinstein predict a record $1.8 trillion in bond sales for 2026. This amount would be higher than the previous record of $1.76 trillion set in 2020. The main reasons for this big increase include companies needing to refinance over $1 trillion in old debt. Also, more company mergers and acquisitions, along with huge spending on AI technology, will drive these record bond sales.

Invest in AI with Roundhill Generative AI ETF for Under 70 Dollars

The Nasdaq-100 is currently in a strong bull market, largely driven by artificial intelligence stocks. The Roundhill Generative AI and Technology ETF offers an easy way to invest in leading AI companies for under $70 per share. This ETF includes major players like Nvidia, Alphabet, Microsoft, SK Hynix, and Broadcom. Since its start in May 2023, the ETF has jumped an impressive 150%, outperforming the S&P 500. While actively managed with a 0.75% expense ratio, it should be part of a larger, diversified investment portfolio.

Sources

• Baidu Slumps as Latest AI Model Fails to Impress Wary Investors
• Baidu shares slide as new AI model fails to impress investors (BIDU:NASDAQ)
• SoundHound AI Stock (SOUN) Forecast: Top Analyst Sees over 95% Upside Ahead
• Nextech3D.ai Poised for Growth as Event-Tech and 3D/AR Revenue Accelerates
• 3 AI Energy Stocks to Buy Now
• Tencent Earnings: AI‑Powered Ad Acceleration, Mini-Game Monetization Upside
• With the AI trade under pressure, Cramer looks at stocks outside of tech to buy
• European Obesity Stocks Join Healthcare Rally as AI Trade Ebbs
• JPMorgan Sees AI Boom Driving Record $1.8 Trillion Bond Sales in 2026
• 1 No-Brainer Artificial Intelligence (AI) ETF to Buy With $70 During the Nasdaq Bull Market