Nasdaq 100: −1.98%
S&P 500: −0.57%
My portfolio: −4.73%
Market pulse
American equities finished lower as a recovery during the first three trading sessions gave way to renewed selling in technology and semiconductor shares. The Nasdaq 100 declined 1.98%, while the S&P 500 lost 0.57%. The weekly figures concealed a sharp reversal: on Friday alone, the Nasdaq 100 fell 3.46% and the Philadelphia Semiconductor Index dropped 7.2%. Disappointing earnings and growing concern about the financial demands of AI expansion overwhelmed the earlier improvement in sentiment.
The economics of AI investment remained the central concern. Alphabet’s results showed Google Cloud revenue more than doubling, but a revenue miss and approximately $9.1 billion of negative quarterly free cash flow helped trigger a 12.6% share-price decline on Thursday. Amazon subsequently reported a $42.4 billion free-cash-flow outflow over the preceding twelve months, driven primarily by AI investment, despite strong AWS growth. Intel’s weaker-than-expected revenue outlook deepened concerns about the wider technology supply chain, sending its shares down 28.6% on Friday. Investors continued to demand evidence that rapidly expanding infrastructure spending would generate sufficient cash returns.
The macroeconomic backdrop offered limited relief. The Federal Reserve held interest rates at 3.75%–4.00% on Wednesday, with two policymakers preferring an increase. Thursday’s data showed third-quarter economic growth of 3.4% at an annualised rate, while September PCE inflation accelerated to 3.6% year on year and core inflation reached 3.1%. Resilient growth and persistent inflation kept further tightening in December in focus. Oil remained an additional risk: prices rose on Friday after an attack on a tanker in the Strait of Hormuz renewed concern about energy supplies and a possible escalation of the conflict with Iran.
Crowd vs. price
The week’s price action suggested that investors were increasingly judging AI growth against its financing requirements and eventual returns to shareholders. Alphabet and Amazon demonstrated substantial cloud demand, while Broadcom’s financing arrangement for Anthropic and Nvidia’s expanded Oracle partnership showed that infrastructure commitments continued to grow. Yet those developments provided less protection when earnings exposed heavy cash consumption or weaker outlooks. Companies also faced different vulnerabilities within the same trade: customer concentration and potential selling pressure affected SpaceX, while Palantir remained sensitive to its valuation ahead of earnings. Confidence in AI’s commercial potential continued to coexist with doubts about the prices investors should pay for that growth.
Holdings & Watchlist Notes
Nvidia: −3.00%
Nvidia’s early recovery was erased by the late-week semiconductor selloff. Its expanded Oracle partnership, announced on 27 October, reinforced demand for its next-generation computing systems and plans for deployment at multi-gigawatt scale. The following day, reports that the U.S. Justice Department was examining the competitive implications of Nvidia’s proposed Hugging Face acquisition added regulatory uncertainty. Friday’s 4.22% decline determined the weekly outcome as disappointing Intel and Amazon results intensified concerns about AI spending, customer finances and the broader technology outlook. Nvidia had remained above the previous Friday’s closing price through Thursday.