microsoft, meta and nvidia Updates

The financial markets recently presented a mixed picture, with the Federal Reserve's 25 basis point interest rate cut providing a significant boost to cyclical stocks. Sectors like materials, financials, and industrials saw strong performance, with banks such as Capital One, Goldman Sachs, and Wells Fargo reaching record highs. This positive momentum for economically sensitive areas contrasted sharply with a downturn in the technology sector, where renewed fears of an artificial intelligence bubble took hold. Microsoft stood out as the sole Magnificent Seven stock to see an increase amidst these shifts. Concerns about AI investments intensified after Oracle announced plans to spend $50 billion in fiscal 2026 on AI contracts, including with Meta and Nvidia, exceeding expectations by $15 billion. This substantial outlay, coupled with a $523 billion contract backlog, raised questions about the returns on AI spending. Oracle's shares dropped significantly, creating a ripple effect that saw Nvidia, Arm Holdings, Intel, and Alphabet shares also fall. Adding to the unease, Oracle also disclosed delays in completing some data centers for OpenAI until 2028, a year later than initially planned. Further pressure on AI stocks came from Broadcom, whose shares tumbled after its earnings report. Despite expectations of strong sales for its custom chips to Alphabet, the company's performance disappointed investors. This led to a broader decline across the semiconductor industry, with the Philadelphia Stock Exchange Semiconductor Index falling up to 5%, impacting major players like Nvidia, AMD, Micron, and Arm Holdings. Jim Cramer suggested investors consider selling Broadcom due to its substantial gains, rather than Oracle's specific results. Despite these challenges, several companies and regions demonstrate strong AI-driven growth. TD Cowen raised its price target for Alphabet to $350, anticipating an AI rally fueled by the successful integration of AI overviews in Google Search and projected growth for Gemini, expected to reach nearly three billion monthly active users by 2030. SoundHound AI also shows robust growth, with its stock surging 864% over three years, driven by its Houndify voice controls platform and a $1.2 billion long-term contract backlog. Taiwan's technology sector remains a bright spot, with stocks projected to hit a record 30,000 points by 2026 due to high demand for AI chips. Taiwan Semiconductor Manufacturing Co. (TSMC) continues to be a critical supplier for tech giants like Nvidia and Google, leveraging the island's advanced manufacturing capabilities. Additionally, Symbotic, an AI robotics company, reported $2.25 billion in fiscal 2025 revenue and a $23 billion backlog, while Flex, a manufacturer of AI hardware like liquid cooling systems for Nvidia, Microsoft, and Google, also shows strong performance.

Key Takeaways

• The Federal Reserve's 25 basis point interest rate cut boosted cyclical stocks, but technology stocks, particularly those in AI, lagged due to bubble fears.
• Oracle's shares dropped after announcing $50 billion in fiscal 2026 spending on AI contracts with Meta and Nvidia, and delaying OpenAI data center completion to 2028.
• Oracle's stock decline had a ripple effect, causing shares of Nvidia, Arm Holdings, Intel, and Alphabet to fall.
• Broadcom's shares tumbled after its earnings report, contributing to AI concerns and impacting Nvidia, AMD, Micron, and Arm Holdings.
• Microsoft was the only Magnificent Seven stock to increase following the Federal Reserve's interest rate cut.
• TD Cowen raised Alphabet's price target to $350, projecting an AI-driven rally for Google, with Gemini expected to reach nearly three billion monthly active users by 2030.
• SoundHound AI's stock surged 864% in three years, driven by its Houndify voice controls platform's 90% task completion rate and a $1.2 billion long-term contract backlog.
• Taiwan's technology stocks are forecast to reach a record 30,000 points by 2026, fueled by strong AI chip demand, with TSMC supplying essential chips to Nvidia and Google.
• Symbotic, an AI robotics company, reported $2.25 billion in fiscal 2025 revenue and holds a $23 billion backlog for its warehouse automation solutions.
• Flex, a key manufacturer of AI hardware like liquid cooling systems and server infrastructure, supports major tech companies including Nvidia, Microsoft, and Google.

Cyclical Stocks Soar After Fed Rate Cut Tech Stocks Falter

The Federal Reserve cut interest rates by 25 basis points on Wednesday, causing cyclical stocks to rise. Economically sensitive sectors like materials, financials, and industrials are outperforming. Banks such as Capital One, Goldman Sachs, and Wells Fargo reached record highs, suggesting a positive economic direction. Meanwhile, technology stocks are lagging, with Microsoft being the only Magnificent Seven stock to increase. Oracle's mixed earnings report contributed to the tech sector's decline.

Cramer Discusses AI Stocks After Oracle Earnings Impact Market

The Dow Jones Industrial Average reached a new high, but the S&P 500 fell after Oracle's earnings report caused concerns about an AI bubble. Jim Cramer suggests buying stocks that benefit from the Federal Reserve's recent interest rate cut, like Home Depot. GE Vernova, which makes turbines for data centers, dropped almost 5 percent, partly due to Oracle's news and some investors taking profits. Broadcom shares also fell before its earnings report, despite expectations of strong sales of its custom chips to Alphabet. Cramer advises investors to consider selling Broadcom due to its large gains, not because of Oracle's performance.

Dow Rises While AI Stocks Falter After Broadcom Earnings

On Friday, major stock indexes showed mixed results as new concerns about artificial intelligence emerged on Wall Street. AI leader Broadcom's shares tumbled after the company reported its earnings. In contrast, retailer Lululemon Athletica saw significant gains in the stock market. The Dow Jones Industrial Average rose 0.2 percent in premarket trading, following a new record set the previous day.

AI Bubble Fears Drag Down Tech Stocks Dow Holds Steady

Major stock indexes fell on Friday as technology shares faced pressure from renewed fears of an AI bubble. The tech-heavy Nasdaq sank, and both the S&P 500 and Dow Jones Industrial Average pulled back from their recent record highs. Oracle's disappointing earnings and Broadcom's plunging shares fueled these AI concerns. However, Lululemon Athletica was a strong performer, rising 12.6 percent. The Dow still appears set for its third consecutive weekly gain despite the broader market shifts.

Oracle's Spending Fuels AI Bubble Fears Tech Stocks Fall

Fears of an artificial intelligence bubble are growing on Wall Street, causing tech stocks to tumble despite the market reaching record highs. Oracle's shares dropped on Thursday after the company announced it would spend $50 billion in fiscal 2026, $15 billion more than expected, on AI contracts with companies like Meta and Nvidia. This spending, along with a $523 billion contract backlog, has raised concerns about the returns on AI investments. Oracle's stock decline had a ripple effect, causing Nvidia, Arm Holdings, Intel, and Alphabet shares to also fall. The company's credit default swaps, a measure of debt risk, soared to their highest level since 2009.

SoundHound AI Stock Still Has Growth Potential Experts Say

SoundHound AI's stock has surged 864 percent in three years, and experts believe its growth story is just beginning. The company's Houndify voice controls platform excels by understanding the meaning of spoken words, not just transcribing them. This allows SoundHound AI to achieve 90 percent task completion rates, far surpassing competitors' 30 to 40 percent. Major brands like Chipotle, Five Guys, and Stellantis trust SoundHound AI for its performance in challenging, noisy real-world settings. The company reported a strong $1.2 billion long-term contract backlog at the end of 2024, with an average deal term of seven years.

Taiwan Stocks Set for Record Highs Driven by AI Demand

Taiwan's technology stocks are expected to reach a record 30,000 points by 2026, driven by strong demand for artificial intelligence chips. Investors are confident in Taiwan's unique advantages in the AI sector, despite global concerns about an AI bubble. The island's semiconductor industry, led by Taiwan Semiconductor Manufacturing Co., supplies essential chips to tech giants like Nvidia and Google. This dominance in the AI supply chain, along with advanced manufacturing and a skilled workforce, provides a solid foundation for continued growth. Foreign investors have also started increasing their holdings, signaling a positive shift in sentiment for Taiwan's market.

TD Cowen Raises Alphabet Target on Strong AI Growth

TD Cowen has increased its price target for Alphabet stock to $350, expecting an AI-driven rally for the company. Analyst John Blackledge raised the target from $335, noting that Alphabet shares have already surged 65 percent this year. This optimistic outlook is due to the successful integration of AI overviews within Google Search, which is boosting search usage and query growth. TD Cowen also raised its estimates for Gemini's monthly active users, predicting 850 million by the end of 2025 and nearly three billion by 2030. The firm believes Google's strong mobile advertising business and competitive cloud services, combined with its AI focus, will lead to continued double-digit growth.

AI Stocks Drop Amid Oracle Delays and Broadcom Concerns

Shares of companies involved in artificial intelligence infrastructure experienced a significant decline. The Philadelphia Stock Exchange Semiconductor Index fell up to 5 percent, with Broadcom dropping as much as 12 percent. Other major AI stock decliners included Nvidia, AMD, Micron, and Arm Holdings. This downturn was fueled by Oracle's announcement that it would delay the completion of some data centers for OpenAI until 2028, a year later than planned. Additionally, investors were disappointed by Broadcom's earnings results, which were released after markets closed on Thursday. These events have raised concerns about the long-term sustainability of spending on AI computing infrastructure.

AI Stocks Decline But Other Sectors Boost Wall Street

On Friday, AI stocks, led by Broadcom, experienced a decline, but other parts of the market helped keep Wall Street indexes near record highs. The S&P 500 and Nasdaq composite slipped, while the Dow Jones Industrial Average gained 0.2 percent, reaching a new record. Broadcom fell 8.8 percent despite reporting strong profits, possibly due to concerns about its financial forecasts or its significant year-to-date surge. Oracle also plunged earlier, raising doubts about AI spending. However, optimism about interest rates, following the Federal Reserve's third rate cut this year, boosted other sectors like travel and blue-chip stocks. Lululemon Athletica jumped 12.6 percent after reporting better-than-expected earnings.

Two AI Stocks Ready for Year-End Market Boost

Symbotic and Flex, two AI-driven growth stocks, are well-positioned for a year-end market rally due to the Federal Reserve's supportive monetary policy. Symbotic, which creates AI robotics for warehouses used by Walmart and Target, reported $2.25 billion in revenue for fiscal 2025 and has a $23 billion backlog. Flex manufactures crucial AI hardware like liquid cooling systems and server infrastructure for tech giants such as Nvidia, Microsoft, and Google. Both companies offer strong growth at reasonable valuations, with Symbotic's stock up 168.3 percent and Flex's up 84.9 percent year-to-date in 2025.

Sources

• Cyclical stocks rise after the Fed's latest rate cut while the AI trade stumbles
• How Cramer is approaching two AI stocks after Oracle report roils market
• Stock Market Today: Dow Rises But Nasdaq, AI Stocks Falter As Broadcom Plunges On Earnings (Live Coverage)
• Dow Jones Today: Stock Futures Mixed; Dow Points Higher, S&P 500 Ticks Lower After Setting Closing Records; Nasdaq Falls as AI Bubble Fears Remain
• Tech stocks tumble amid renewed AI worries on Wall Street
• Think It's Too Late to Buy SoundHound AI Stock? Here's the 1 Reason Why There's Still Time.
• Ignoring AI bubble fears, investors bet Nvidia and Google will fuel Taiwan stocks to record
• TD Cowen raises Alphabet target on growing Gemini users and AI-powered Google searches
• AI Stocks Get Pummeled as Oracle Delay Adds to Broadcom Concerns
• AI stocks are falling with Broadcom, but the rest of Wall Street is picking up the slack
• 2 AI Growth Stocks Poised for a Year-End Santa Rally