October 2025 saw a notable upswing in global equity markets, with artificial intelligence (AI) emerging as a key driver of investor enthusiasm.
In the United States, major indices closed the month firmly in the green, buoyed by strong third-quarter earnings and renewed confidence in AI’s transformative potential.
Tech giants such as Nvidia, Amazon, and Palantir posted robust results, reinforcing the narrative that AI is not just hype—it’s reshaping business fundamentals.
Nvidia’s leadership in AI chips and Amazon’s expanding AI-driven logistics were particularly well received, while Palantir’s government contracts underscored AI’s strategic reach.
The Federal Reserve’s decision to cut interest rates by 0.25% added further momentum, making growth stocks more attractive and amplifying the rally in AI-heavy portfolios.
Analysts noted that investor sentiment was bolstered by easing trade tensions and a cooling inflation outlook, but it was AI’s ‘secular tailwind of extreme innovation’ that truly captured market imagination.
While some caution that valuations may be running hot, the October 2025 rally suggests that AI is now central to market dynamics. A pullback is likely soon.
As 2025 draws to a close, investors are watching closely to see whether the optimism translates into durable gains—or signals the start of an AI bubble.
Amazon has reportedly announced its largest corporate restructuring to date, with plans to lay off up to30,000 white-collar employees.
This represents nearly 10% of its global office workforce—as it accelerates its transition toward artificial intelligence and automation-led operations.
The move, confirmed on 28th October 2025, marks a dramatic shift in the tech giant’s internal priorities.
CEO Andy Jassy has framed the layoffs as part of a broader effort to streamline management. The company appears to want to eliminate bureaucratic inefficiencies and reallocate resources toward AI infrastructure.
‘We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs’, Jassy is reported as saying.
Affected departments span human resources, logistics, customer service, and Amazon Web Services (AWS). Many roles are deemed redundant due to AI integration.
Heavy investment
The company has been investing heavily in machine learning systems. These are capable of handling tasks ranging from inventory forecasting to customer support. This approach has prompted the reevaluation of traditional staffing models.
While Amazon employs over 1.5 million people globally, the layoffs target its 350,000 corporate staff, signalling a significant recalibration of its white-collar operations.
It was reported that the job cuts were delivered via email, underscoring the impersonal nature of the transition.
The timing of the announcement—just ahead of the holiday season—has raised eyebrows across the industry.
Analysts suggest Amazon is betting on AI to offset seasonal labour demands and long-term cost pressures. However, this risks reputational fallout and internal morale issues.
Structural challenges
Critics argue that the scale of the layoffs reflects deeper structural challenges, including overhiring during the pandemic and a growing reliance on technology to solve human-centred problems.
Others see it as a bellwether for the wider tech sector, where AI is increasingly viewed as both a productivity boon and a disruptive force.
As Amazon reshapes its workforce for an AI-driven future, questions remain about the social and ethical implications of such rapid automation.
For now, the company appears resolute: leaner, faster, and more algorithmically efficient—even if it means leaving tens of thousands behind in the process.
But, AI is also creating job opportunities in other areas.
It was just one week ago on Monday 20th October 2025, Amazon Web Services (AWS) experienced a major outage that rippled across the digital world, disrupting operations for millions of users and businesses.
The incident, which originated in AWS’s US-East-1 region, was reportedly traced to DNS resolution failures affecting DynamoDB—one of AWS’s core database services.
This technical fault triggered cascading issues across EC2, network load balancers, and other critical infrastructure, leaving many services offline for hours.
The impact was immediate and widespread. Major consumer platforms such as Snapchat, Reddit, Disney+, Canva, and Ring doorbells went dark.
Financial services including Venmo and Robinhood faltered, while airline customers at United and Delta struggled to access bookings. Even British government portals like Gov.uk and HMRC were affected, underscoring the global reach of AWS’s infrastructure.
World leader
AWS is the world’s leading cloud provider, commanding roughly one-third of the global market—well ahead of Microsoft Azure and Google Cloud.
Millions of companies, from startups to multinational corporations, rely on AWS for everything from data storage and virtual servers to machine learning and content delivery.
Its services underpin critical operations in healthcare, education, retail, logistics, and media. When AWS stumbles, the internet itself feels the tremor.
20 Prominent Companies Affected by the AWS Outage (20th Oct 2025)
Sector
Company Name
Impact Summary
E-commerce
Amazon
Internal systems and Seller Central offline
Social Media
Snapchat
App outages and delays
Streaming
Disney+
Service interruptions
News
Reddit
Partial outages, scaling issues
Design Tools
Canva
High error rates, reduced functionality
Smart Home
Ring
Device connectivity issues
Finance
Venmo
Transaction delays
Finance
Robinhood
Trading disruptions
Airlines
United Airlines
Booking and check-in issues
Airlines
Delta Airlines
Reservation access problems
Telecom
T-Mobile
Indirect service disruptions
Government
Gov.uk
Portal access issues
Government
HMRC
Service delays
Banking
Lloyds Bank
Online banking affected
Productivity
Zoom
Meeting access issues
Productivity
Slack
Messaging delays
Education
Canvas
Assignment submissions disrupted
Crypto
Coinbase
User access failures
Gaming
Roblox
Server outages
Gaming
Fortnite
Gameplay interruptions
This outage wasn’t the result of a cyberattack, but rather a technical fault in one of Amazon’s main data centres. Yet the consequences were no less severe.
Amazon’s own operations were disrupted, with warehouse workers unable to access internal systems and third-party sellers locked out of Seller Central.
Canva reported ‘significantly increased error rates’. while Coinbase and Roblox cited cloud-related failures.
The incident serves as a stark reminder of the risks inherent in centralised cloud infrastructure. As digital life becomes increasingly dependent on a handful of providers, the potential for systemic disruption grows.
A single point of failure can cascade across industries, affecting everything from classroom assignments to emergency services.
AWS has since restored normal operations and promised a detailed post-event summary. But for many, the outage has reignited questions about resilience, redundancy, and the wisdom of placing so much trust in a single cloud giant.
In the age of digital interdependence, even a brief lapse can feel like a global blackout.
In recent months, the S&P 500 has shown signs of evolving from a broad economic barometer into something far more concentrated: a proxy for artificial intelligence optimism.
While traditionally viewed as a diversified snapshot of American corporate health, the index’s current composition and market behaviour suggest it’s increasingly tethered to the fortunes of a handful of AI-driven giants.
At the heart of this transformation is the dominance of mega-cap tech firms. Microsoft, Nvidia, Alphabet, Amazon, Meta, and Apple now account for a disproportionate share of the index’s total market capitalisation.
As of late 2025 that heady combination of AI led tech represents just over 30% of the S&P 500.
Six AI related companies represent 30% of the S&P 500
These companies aren’t merely adjacent to AI—they’re building its infrastructure, shaping its software ecosystems, and embedding it into consumer and enterprise products.
Nvidia, for instance, has become synonymous with AI hardware, its valuation soaring on the back of demand for high-performance chips powering generative models and data centres.
Recent analysis reveals that roughly 8% of the S&P 500’s weight is directly tied to AI-related revenue.
An additional 25 companies within the index are actively developing AI technologies, even if those efforts haven’t yet translated into standalone revenue streams. This includes sectors as varied as autonomous vehicles, quantum computing, and predictive analytics.
Investor behaviour has only amplified this shift. The index’s recent rally has been fuelled largely by enthusiasm for AI breakthroughs, with capital flowing into stocks perceived as future beneficiaries of machine learning and automation.
This momentum has led some analysts to warn of valuation bubbles, urging diversification away from AI-heavy names in case of a sector-wide correction.
Narrower narrative
Symbolically, the S&P 500’s identity is shifting. Once a mirror of industrial and consumer strength, it now reflects a narrower narrative—one of technological acceleration and speculative belief in artificial intelligence.
This raises philosophical questions about what the index truly represents: is it still a measure of economic breadth, or has it become a momentum gauge for a single transformative theme?
For editorial observers, this evolution offers fertile ground. The index’s transformation can be read not just as a financial trend, but as a cultural signal—suggesting that AI is no longer a niche innovation, but the dominant lens through which investors, executives, and policymakers interpret the future.
Whether this concentration proves visionary or vulnerable remains to be seen.
But one thing is clear: the S&P 500 is no longer just a mirror of the American economy—it’s increasingly a reflection of our collective bet on intelligent machines.
30% of S&P 500
As of 2025, Microsoft, Nvidia, Alphabet, Amazon, Meta, and Apple—often grouped as part of the ‘Magnificent Seven’—collectively represent approximately 30% of the S&P 500’s total market capitalisation.
That’s a staggering concentration for just six companies in an index meant to reflect the broader U.S. economy.
For context, their combined performance was responsible for roughly two-thirds of the S&P 500’s total gains in 2024—a clear signal that the index’s movement is increasingly tethered to the fortunes of a few dominant tech giants.
The world’s largest contract chipmaker reported net income of NT$452.3 billion (£11.4 billion), far exceeding analyst expectations and marking a new high for the company.
Revenue climbed 30.3% year-on-year to NT$989.92 billion, driven by insatiable demand for high-performance chips powering artificial intelligence applications.
Tech giants including Nvidia, OpenAI, and Oracle have ramped up orders for TSMC’s cutting-edge processors, fuelling the company’s meteoric rise.
TSMC’s CEO, C.C. Wei, reportedly attributed the growth to ‘unprecedented investment in AI infrastructure’, noting that the company’s advanced nodes are now central to training large language models and deploying generative AI tools.
Despite global economic headwinds and ongoing trade tensions, TSMC’s strategic expansion—including a $165 billion global buildout across Arizona, Europe, and Japan—is positioning it as the backbone of next-gen computing.
The results also reflect a broader shift in the semiconductor landscape. As traditional consumer electronics plateau, AI-driven demand is reshaping supply chains and investment priorities.
Analysts suggest that AI chip spending could surpass $1 trillion in the coming years, with TSMC poised to capture a significant share.
For investors and industry observers, the message is clear: AI isn’t just a trend—it’s a fundamental shift. And TSMC, with its unparalleled fabrication expertise and global influence, is quietly shaping the future.
As the AI arms race accelerates, TSMC’s performance offers a glimpse into the future of tech: one where silicon, not software, defines the frontier.
The company’s latest earnings are not just a financial milestone—they’re a signal of where innovation is headed next.
Oracle Bets Big on AMD AI Chips, Challenging Nvidia’s Dominance
Oracle Cloud Infrastructure has announced plans to deploy 50,000 AMD Instinct MI450 graphics processors starting in the second half of 2026, marking a bold strategic shift in the AI hardware landscape.
The move signals a direct challenge to Nvidia’s long-standing dominance in the data centre GPU market, where it currently commands over 90% market share.
AMD’s MI450 chips, unveiled earlier this year, are designed for high-performance AI workloads and can be assembled into rack-sized systems that allow 72 chips to function as a unified engine.
This architecture is tailored for inferencing tasks—an area Oracle believes AMD will excel in. ‘We feel like customers are going to take up AMD very, very well’, reportedly said Karan Batta, Oracle Cloud’s senior vice president.
The announcement comes amid a broader realignment in the AI ecosystem. OpenAI, historically reliant on Nvidia hardware, has recently inked a multi-year deal with AMD involving processors requiring up to 6 gigawatts of power.
If successful, OpenAI could acquire up to 10% of AMD’s shares, further cementing the chipmaker’s role in next-generation AI infrastructure.
Oracle’s pivot also reflects its ambition to compete with cloud giants like Microsoft, Amazon, and Google. With a reported five-year cloud deal with OpenAI potentially worth $300 billion, Oracle is positioning itself not just as a capacity provider but as a strategic AI enabler.
While Nvidia remains a formidable force, Oracle’s investment in AMD chips underscores a growing appetite for alternatives.
As AI demands scale, diversity in chip supply could become a competitive advantage—especially for enterprises seeking flexibility, cost efficiency, and innovation beyond the Nvidia ecosystem.
The AI arms race is far from over, but Oracle’s latest move suggests it’s no longer content to play catch-up. It’s aiming to redefine the rules.
Influential figures and institutions are sounding the AI alarm—or at least raising eyebrows—about the frothy valuations and speculative fervour surrounding artificial intelligence.
Who’s Warning About the AI Bubble?
🏛️ Bank of England – Financial Policy Committee
View: Stark warning.
Quote: “The risk of a sharp market correction has increased.”
Why it matters: The BoE compares current AI stock valuations to the dotcom bubble, noting that the top five S&P 500 firms now command nearly 30% of market cap—the highest concentration in 50 years.
🏦 Jerome Powell – Chair, U.S. Federal Reserve
View: Cautiously sceptical.
Quote: Assets are “fairly highly valued.”
Why it matters: While not naming AI directly, Powell’s remarks echo broader concerns about tech valuations and investor exuberance.
🧮 Lisa Shalett – Chief Investment Officer, Morgan Stanley Wealth Management
View: Deeply concerned.
Quote: “This is not going to be pretty” if AI capital expenditure disappoints.
Why it matters: Shalett warns that 75% of S&P 500 returns are tied to AI hype, likening the moment to the “Cisco cliff” of the early 2000s.
🌍 Kristalina Georgieva – Managing Director, IMF
View: Watchful.
Quote: Financial conditions could “turn abruptly.”
Why it matters: Georgieva highlights the fragility of markets despite AI’s productivity promise, warning of sudden sentiment shifts.
🧨 Sam Altman – CEO, OpenAI
View: Self-aware caution.
Quote: “People will overinvest and lose money.”
Why it matters: Altman’s admission from inside the AI gold rush adds credibility to bubble concerns—even as his company fuels the hype.
📦 Jeff Bezos – Founder, Amazon
View: Bubble-aware.
Quote: Described the current environment as “kind of an industrial bubble.”
Why it matters: Bezos sees parallels with past tech manias, suggesting that infrastructure spending may be overextended.
🧠 Adam Slater – Lead Economist, Oxford Economics
View: Analytical.
Quote: “There are a few potential symptoms of a bubble.”
Why it matters: Slater points to stretched valuations and extreme optimism, noting that productivity projections vary wildly.
🏛️ Goldman Sachs – Investment Strategy Division
View: Cautiously optimistic.
Quote: “A bubble has not yet formed,” but investors should “diversify.”
Why it matters: Goldman acknowledges the risks while maintaining that fundamentals may still justify valuations—though they advise caution.
AI Bubble voices infographic October 2025
🧠 Julius Černiauskas and the Oxylabs AI/ML Advisory Board
🔍 View: The AI hype is nearing its peak—and may soon deflate.
Černiauskas warns that AI development is straining environmental resources and public trust. He’s pushing for responsible and sustainable AI practices, noting that transparency is lacking in how many models operate.
Ali Chaudhry, research fellow at UCL and founder of ResearchPal, adds that scaling laws are showing their limits. He predicts diminishing returns from simply making models bigger, and expects tightened regulations around generative AI in 2025.
Adi Andrei, cofounder of Technosophics, goes further: he believes the Gen AI bubble is on the verge of bursting, citing overinvestment and unmet expectations
🧠 Jamie Dimon on the AI Bubble
🔥 View: Sharply concerned—more than most as widely reported
Quote: “I’m far more worried than others about the prospects of a downturn.”
Context: Dimon believes AI stock valuations are “stretched” and compares the current surge to the dotcom bubble of the late 1990s.
📉 Key Warnings from Dimon
“Sharp correction” risk: He sees a real danger of a sudden market pullback, especially given how AI-related stocks have surged disproportionately—like AMD jumping 24% in a single day after an OpenAI deal.
“Most people involved won’t do well”: Dimon told the BBC that while AI will ultimately pay off—like cars and TVs did—many investors will lose money along the way.
“Governments are distracted”: He criticised policymakers for focusing on crypto and ignoring real security threats, saying: “We should be stockpiling bullets, guns and bombs”.
“AI will disrupt jobs and companies”: At a trade event in Dublin, he warned that AI’s ubiquity will shake up industries and employment across the board.
And so…
The AI boom of 2025 has ignited a speculative frenzy across global markets, with tech stocks soaring and investors piling into anything labelled “AI-adjacent.”
But beneath the euphoria, a chorus of high-profile warnings is growing louder. From the Bank of England and IMF to JPMorgan’s Jamie Dimon and OpenAI’s Sam Altman, concerns are mounting that valuations are dangerously stretched, capital is overconcentrated, and the narrative is outpacing reality.
Dimon likens the moment to the dotcom bubble, while Altman admits many will “lose money” chasing the hype. Analysts point to classic bubble signals: retail mania, corporate FOMO, and earnings divorced from fundamentals.
Even as AI’s long-term utility remains promising, the short-term exuberance may be setting the stage for a sharp correction.
Whether it’s a pullback or a full-blown crash, the mood is shifting—from uncritical optimism to wary anticipation.
The question now is not whether AI will change the world, but whether markets have priced in too much, too soon.
We have been warned!
The AI bubble will pop – it’s just a matter of when and not if.
There’s growing concern that parts of the AI boom—especially the infrastructure and monetisation frenzy—might be built on shaky foundations.
The term ‘AI house of cards’ is being used to describe deals like Oracle’s multiyear agreement with OpenAI, which has committed to buying $300 billion in computing power over five years starting in 2027.
That’s on top of OpenAI’s existing $100 billion in commitments, despite having only about $12 billion in annual recurring revenue. Analysts are questioning whether the math adds up, and whether Oracle’s backlog—up 359% year-over-year—is too dependent on a single customer.
Oracle’s stock surged 36%, then dropped 5% Friday as investors took profits and reassessed the risks.
Some analysts remain neutral, citing murky contract details and the possibility that OpenAI’s nonprofit status could limit its ability to absorb the $40 billion it raised earlier this year.
The broader picture? AI infrastructure spending is ballooning into the trillions, echoing the dot-com era’s early adoption frenzy. If demand doesn’t materialise fast enough, we could see a correction.
But others argue this is just the messy middle of a long-term transformation—where data centres become the new utilities
The AI infrastructure boom—especially the Oracle–OpenAI deal—is raising eyebrows because the financial and operational foundations look more speculative than solid.
Here’s why some analysts are calling it a potential house of cards
⚠️ 1. Mismatch Between Revenue and Commitments
OpenAI’s annual revenue is reportedly around $10–12 billion, but it’s committed to $300 billion in cloud spending with Oracle over five years.
That’s $60 billion per year, meaning OpenAI would need to grow revenue 5–6x just to break even on compute costs.
CEO Sam Altman projects $44 billion in losses before profitability in 2029.
🔌 2. Massive Energy Demands
The infrastructure needed to fulfill this contract requires electricity equivalent to two Hoover Dams.
That’s not just expensive—it’s logistically daunting. Data centres are planned across five U.S. states, but power sourcing and environmental impact remain unclear.
AI House of Cards Infographic
💸 3. Oracle’s Risk Exposure
Oracle’s debt-to-equity ratio is already 10x higher than Microsoft’s, and it may need to borrow more to meet OpenAI’s demands.
The deal accounts for most of Oracle’s $317 billion backlog, tying its future growth to a single customer.
🔄 4. Shifting Alliances and Uncertain Lock-In
OpenAI recently ended its exclusive cloud deal with Microsoft, freeing it to sign with Oracle—but also introducing risk if future models are restricted by AGI clauses.
Microsoft is now integrating Anthropic’s Claude into Office 365, signalling a diversification away from OpenAI.
🧮 5. Speculative Scaling Assumptions
The entire bet hinges on continued global adoption of OpenAI’s tech and exponential demand for inference at scale.
If adoption plateaus or competitors leapfrog, the infrastructure could become overbuilt—echoing the dot-com frenzy of the early 2000s.
Is this a moment for the AI frenzy to take a breather?
In tech terms, a neocloud is a new breed of cloud infrastructure purpose-built for AI and high-performance computing (HPC).
Unlike traditional hyperscale cloud providers (like AWS or Azure), neoclouds focus on delivering raw GPU power, low-latency performance, and specialised environments for compute-intensive workloads.
🧠 Key Features of Neoclouds
GPU-as-a-Service (GPUaaS): Optimised for training and running large AI models.
AI-native architecture: Designed specifically for machine learning, deep learning, and real-time inference.
Edge-ready: Supports distributed deployments closer to users for faster response times.
Transparent pricing: Often more cost-efficient than hyperscalers for AI workloads.
Bare-metal access: Minimal virtualisation for maximum performance.
🏗️ How They Differ from Traditional Clouds
Feature
Neoclouds
Hyperscale Clouds
Focus
AI & HPC workloads
General-purpose services
Hardware
GPU-centric, high-density clusters
Mixed CPU/GPU, broad service range
Flexibility
Agile, workload-specific
Broad but less specialised
Latency
Ultra-low, edge-optimized
Higher, centralized infrastructure
Pricing
Usage-based, transparent
Often complex, with hidden costs
🚀 Who Uses Neoclouds?
AI startups building chatbots, LLMs, or recommendation engines
Research labs running simulations or genomics
Media studios doing real-time rendering or VFX
Enterprises deploying private AI models or edge computing
Think of neoclouds as specialist GPU clouds—like a high-performance race car compared to a family SUV.
Both get you places, but one’s built for speed, precision, and specialised terrain.
The S&P 500 closed above 6,300 for the first time in history on Monday 21st July 2025, while the Nasdaq Composite notched yet another record, finishing at 20,974.17.
Investor enthusiasm for upcoming tech earnings has eclipsed broader concerns over looming global tariffs, fuelling a rally in major indexes.
Despite marginal losses in the Dow Jones Industrial Average, the tech-heavy Nasdaq rose 0.38% while the S&P 500 climbed 0.14%, buoyed by gains in heavyweights like Meta Platforms, Alphabet, and Amazon.
With over 60 S&P 500 companies having reported so far this earnings season, more than 85% have exceeded expectations, according to FactSet.
S&P 500 and Nasdaq Comp at new record highs 21st July 2025
S&P 500 and Nasdaq Comp at new record highs 21st July 2025
Alphabet shares advanced over 2% ahead of Wednesday’s results, and Tesla headlines the ‘Magnificent Seven’ group expected to drive the bulk of earnings growth this quarter. And not necessarily for the right reason.
Analysts reportedly expect the group to deliver 14% growth year-on-year, far outpacing the remaining S&P constituents’ average of 3.4%.
S&P 500
Despite tariff tensions simmering — with the U.S. setting a 1st August deadline for levy enforcement — investor sentiment remains bullish.
Bank of America estimates Q2 earnings are tracking a 5% annual increase, suggesting resilience amid geopolitical headwinds.
Strategists warn of potential volatility, as earnings surprises or policy shifts could spark swift market reactions.
Still, some analysts see space for further upside, projecting a potential S&P climb to 6,600 before any meaningful pullback.
As the tech titans prepare to report, all eyes are on whether optimism can keep the rally alive — or if tariffs will return to centre stage.
From FANG stocks, MAG 7 stocks to AI – the tech titans just keep giving.
On Monday 14th April 2025, the stock market experienced a notable mini rally, driven by the tech sector’s resurgence following a weekend announcement of a temporary tariff pause.
Major tech companies like Apple, Nvidia, and Amazon saw significant gains, with Apple shares surging by 7.5%. The Nasdaq Composite, heavily weighted with tech stocks, climbed 1.9%, while the S&P 500 rose 1.5%.
This rally marked a stark contrast to the volatility of the previous week, where tariff uncertainties had sent shockwaves through the market.
The tariff pause, although temporary and restricted to 20%, helped to alleviate immediate concerns about rising costs for consumers and businesses.
Importers were spared from choosing between absorbing higher expenses or passing them on to customers. This relief was particularly impactful for companies reliant on Chinese manufacturing, as the exemptions covered a wide range of tech products.
Market analysts noted that the rally was not just a reaction to the tariff news but also a reflection of the tech sector’s resilience.
Despite facing challenges earlier in the year, tech companies have continued to innovate and adapt, maintaining their position as a driving force in the U.S. and world economies.
However, the rally’s sustainability remains uncertain. The administration’s mixed messages about future tariffs have left investors cautious.
While Monday’s gains were encouraging, the broader market continues to grapple with the unpredictability of trade policies.
Stocks sold off sharply on Friday 28th March 2025, pressured by growing uncertainty on U.S. trade policy as well as a grim outlook on inflation
The Dow Jones Industrial Average closed down 715 points at 41,583. The S&P 500 lost 1.97% to close 5,580 ending the week down for the fifth time in the last six weeks. The Nasdaq Composite plunged 2.7% to 17,322.
Shares of several technology giants also fell putting pressure on the broader market. Google-parent Alphabet lost 4.9%, while Meta and Amazon each shed 4.3%.
This week, the S&P 500 lost 1.53%, while the 30-stock Dow shed 0.96%. The Nasdaq declined by 2.59%. With this latest losing week, Nasdaq is now on pace for a more than 8% monthly decline, which would be its worst monthly performance since December 2022.
Dow Jones one-day chart (28th March 2025)
Dow Jones one-day chart (28th March 2025)
Stocks took a leg lower on Friday after the University of Michigan’s final read on consumer sentiment for March 2025 reflected the highest long-term inflation expectation since 1993.
Friday’s core personal consumption expenditures price index also came in hotter-than-expected, rising 2.8% in February and reflecting a 0.4% increase for the month, stoking concerns about persistent inflation.
Economists had reportedly been looking for respective numbers of 2.7% and 0.3%. Consumer spending accelerated 0.4% for the month, below the 0.5% forecast, according to fresh data from the Bureau of Economic Analysis.
The market is getting squeezed by both sides. There is uncertainty about reciprocal tariffs hitting the major exporting sectors like tech alongside concerns about a weakening consumer facing higher prices
Trump’s tariffs push will hit the U.S. harder than Europe in the short term, it has been reported.
Japan’s Nikkei enters correction as Trump’s tariff assault drives sell-off in Asia markets
DeepSeek’s impact probably isn’t yet fully reflected in U.S. stocks
The ramifications of the Chinese startup DeepSeek, with its promise of delivering cheaper and more energy-efficient alternatives to harness artificial intelligence (AI), have yet to be fully reflected in U.S. equities.
If DeepSeek ends up delivering a less costly way forward – it will make it much easier and cheaper for smaller more typical companies to create AI ‘agents’ or AI opportunities for their businesses.
Under this scenario there will be ‘useful’ and meaningful benefits from DeepSeek that could bring huge earnings potential for a broader mix of companies beyond the current AI heavyweights through greater efficiencies and productivity from less-expensive AI solutions.
It also put huge sums being pledged for AI infrastructure by U.S. mega cap tech companies under a microscope. Rather than back down, the U.S. spending race has intensified.
Meta’s Chief Executive Mark Zuckerberg spoke a week ago of spending ‘hundreds of billions of dollars’ on AI infrastructure in the coming years, after pledging $60 billion to $65 billion on AI this year.
Alphabet announced AI investment for 2025, a bigger figure than Wall Street was anticipating.
Google forecast $75 billion in capital expenditures in 2025, a bigger figure than Wall Street was anticipating.
Microsoft reported its cloud and AI spending grew 95% in its fiscal second quarter to $22.6 billion.
Amazon has reported big AI investment too.
The spending frenzy on anything AI sends the market into a spin. How much more has to be spent before we see capital expenditures reduced or decrease is anyone’s guess right now – but current levels of AI expenditure are high, and returns will be expected.
“When is enough, enough?”
Or more to the point you might ask – when is ‘enough’ too much?
Fresh AI-spending commitments helped lift shares of Nvidia on while we saw a slump for Tesla shares in the week.
China this week saw the U.S. slap new 10% tariffs, while Canada and Mexico saw Trump threaten but delay 25% tariffs by 30 days. China retaliated in kind.
Catching up with the ‘Magnificent Seven’
Despite the high scrutiny on AI stocks, there is also much renewed focus from investors on other areas of the market.
There has been a bit of a rotation – while tech has been under pressure, defensive and rate-sensitive parts of the market have been gaining. This seems to be an emerging pattern.
But there should be reason for caution. For one thing, the growth rate of ‘Magnificent Seven’ earnings has been tailing off in recent quarters, especially since the group reached a 61% yearly rate in the fourth quarter of 2023 – the spend on AI investment has yet to fully appreciate the full return.
Forward analysts’ expectations have this percentage reportedly closer to 16% to 18% for the end of this year.
But that also would move the group closer to the roughly 12% to 13% yearly growth rate expected for the rest of the companies in the S&P 500 index, potentially making the high valuations of the ‘Magnificent Seven’ tougher to justify.
One of the most surprising things of the past couple of weeks, given the news around DeepSeek and shocks on the trade front, is the fact that stocks were still close to their all-time highs.
The market is pretty resilient right now, but tech stocks are sitting at a very high valuation – a pullback is due, even a correction (in my opinion).
The arrival of DeepSeek creates an alternative ‘cheaper’ AI option and that will unravel the status quo.
Nvidia is set to replace its rival chipmaker Intel in the Dow Jones Industrial Average, signifying a significant change in the blue-chip index that highlights the surge in artificial intelligence and a substantial shift within the semiconductor industry.
Intel’s shares fell by 1% in extended trading on Friday 1st November 2024, while Nvidia’s shares increased by 1%. Intel has now lost over half its value.
The update will take place on 8th November 2024. Also, Sherwin Williams will replace Dow Inc. in the index, the S&P and Dow Jones said in a statement.
Nvidia‘s shares have surged over 170% in 2024, following a roughly 240% increase last year, as investors flock to the AI chipmaker. Nvidia’s market capitalisation has expanded to $3.3 trillion, ranking it second only to Apple among publicly traded companies.
Nvidia one-year share price chart
Nvidia one-year share price chart
Major companies such as Microsoft, Meta, Google, and Amazon are acquiring Nvidia’s graphics processing units (GPUs), like the H100, in large quantities to create computer clusters for AI projects. Nvidia’s revenue has more than doubled for five consecutive quarters, with at least a threefold increase in three of those quarters. The company has indicated that the demand for its forthcoming AI GPU, Blackwell, is ‘insane’.
With Nvidia‘s inclusion, four of the six tech companies valued at over a trillion dollars are now part of the index, leaving Alphabet and Meta as the two not listed in the Dow.
Apple’s fourth-quarter results surpassed Wall Street forecasts for revenue and earnings per share. However, net income declined due to a one-time charge related to a tax settlement in Europe.
iPhone sales and overall sales both rose by 6%.
Apple one year stock chart
Amazon
Amazon’s shares soared in after-hours trading following the announcement of earnings and revenue that exceeded expectations. The firm’s cloud services and advertising divisions demonstrated significant expansion.
Amazon one year stock chart
Intel
Intel has reported earnings that surpassed expectations and provided improved guidance. The company is currently undergoing a significant restructuring initiative.
Intel one year stock chart
However, Intel has now lost over half its market value.
The Nasdaq Composite climbed to an all-time high on Friday 25th October 2024, boosted by BIG tech stocks.
The tech-heavy index rose 0.56% to 18,518.61
The tech-heavy Nasdaq Composite index rose 0.56% to 18,518.61
Tech stocks boosted the market ahead of their upcoming earnings. Nvidia added 0.8%, and shares of Meta Platforms, Amazon and Microsoft were also higher.
Some analysts are suggesting it may be time to short Amazon and Apple as they head into earnings season? Let’s see.
Tesla helped boost the Nasdaq as its stock climbed to close at a 13-month high, sustaining its rally post-earnings.
Tesla enjoyed its best market day since 2013, the stock rose more than 3% on Friday 25th October 2024, closing at its highest since September 2023.
Amazon Web Services (AWS) has announced the signing of an agreement with Dominion Energy, the utility company of Virginia U.S., to explore the development of a small modular nuclear reactor near Dominion’s existing North Anna nuclear power station.
As Amazon’s cloud computing subsidiary, AWS has an ever-growing demand for clean energy, particularly as it expands into generative AI. This agreement aligns with Amazon’s journey towards net-zero carbon emissions.
Amazon joins other major tech companies like Google and Microsoft in turning to nuclear power to meet the increasing energy needs of data centres.
Nvidia’s shares have reached a record peak as the company continues to benefit from the surging demand for its AI chips
Tech giants such as Microsoft, Meta, Google, and Amazon are acquiring Nvidia’s GPUs in large volumes to create extensive AI computing clusters.
Nvidia, with a market capitalisation of around $3.4 trillion, ranks as the second most valuable publicly traded company in the U.S., trailing behind Apple, which has a market cap of approximately $3.55 trillion.
Oh, the volatility of tech stocks, don’t you just love it?
The company’s stock rose by 2.4% to close at $138.07, exceeding the previous high of $135.58 set on 18th June 2023. The shares have increased by nearly 180% this year and have experienced a more than ninefold increase since early 2023.
Regarded as the leading supplier in the AI revolution, Nvidia has gained significantly from the generative AI surge initiated by OpenAI’s ChatGPT release in November 2022. Nvidia’s GPUs are instrumental in developing and running sophisticated AI models, including those that operate ChatGPT and related platforms.
You can’t go far wrong when big players such as Microsoft, Meta, Google and Amazon are buying your stuff.
The U.S. government is targeting the heart of Google’s vast wealth – its highly profitable monopolising advertising technology business
A trial scheduled to begin on Monday 9th September 2024 will scrutinise the Department of Justice’s (DoJ) claims that Alphabet, the parent company of Google, is unlawfully sustaining a monopoly in the marketplace.
In the previous year, the firm amassed over $200 billion (£152 billion) through the placement and sale of online advertisements.
Alphabet attributes its success to the ‘effectiveness’ of its business. Conversely, prosecutors contend that the company has leveraged its market control to stifle competition.
The legal action, launched by the Department of Justice (DoJ) and several states in 2023, charges Google with dominating the digital advertising market and employing its influence to obstruct innovation and competition.
Google asserts that it is simply one of numerous companies that arrange digital advertisement placements for consumers.
The corporation argues that the digital advertising industry is increasingly competitive, citing the growing advertising revenues of entities like Apple, Amazon, and TikTok as proof, as mentioned in a blog post responding to the DoJ’s lawsuit in 2023.
The contentions will be laid out before the U.S. District Judge who is expected to deliver a verdict.
This trial comes on the heels of a notable decision in a separate antitrust lawsuit against Google by the Justice Department last month. Judge Amit Mehta ruled that Google had illegally stifled competition in its online search services.
Major technology corporations such as Microsoft, Alphabet, and Meta are channelling billions into data centre infrastructures to bolster generative AI, which is causing a spike in energy demand.
Sustainable Metal Cloud has announced that its immersion cooling technology is 28% less expensive to install compared to other liquid-based cooling methods and can cut energy use by up to 50%.
The surge in artificial intelligence has increased the need for more robust processors and the energy to cool data centres.
This presents an opportunity for Sustainable Metal Cloud, which runs ‘sustainable AI factories’ consisting of HyperCubes located in Singapore and Australia.
These HyperCubes house servers equipped with Nvidia processors immersed in a synthetic oil known as polyalphaolefin, which is more effective at dissipating heat than air. The company claims this technology can reduce energy consumption by as much as 50% when compared to the conventional air-cooling systems found in most data centres.
Additionally, the Singapore-based company states that its immersion cooling technology is more cost-effective to install by 28% than other liquid cooling options. The HyperCubes are modular and can be integrated into any data centre, utilising spaces that are currently unoccupied within existing facilities.
What is a Hypercube?
Structure: A hypercube topology connects nodes in a way that each node is connected to others in a manner similar to the geometric hypercube. For example, in a 3-dimensional hypercube (a cube), each node is connected to three other nodes.
Scalability: This structure allows for efficient scaling. As the number of dimensions increases, the number of nodes that can be connected grows exponentially.
Fault Tolerance: Hypercube networks are known for their robustness. If one connection fails, there are multiple alternative paths for data to travel, ensuring reliability.
Benefits in data centres
High Performance: The multiple pathways in a hypercube network reduce latency and increase data transfer speeds, which is crucial for big tech companies handling vast amounts of data.
Efficient Resource Utilisation: The topology allows for better load balancing and resource allocation, optimising the performance of data centres.
Flexibility: Hypercube networks can easily adapt to changes in the network, such as adding or removing nodes, without significant reconfiguration.
Big Tech Companies: Companies like Google, Amazon, and Microsoft likely use hypercube topologies in their data centres to ensure high performance and reliability.
High-Performance Computing (HPC): Hypercube networks are also used in supercomputers and other HPC environments where efficient data transfer is critical.
A U.S. judge has ruled that Google illegally maintained a monopoly in online searches and related advertising. The lawsuit, brought by the Department of Justice, charged Google with controlling around 90% of the online search market.
It was reportedly noted by the judge that Google’s billions of dollars in investments to become the default search engine on smartphones and browsers could be anticompetitive.
The decision, issued on Monday 5th August 2024, could potentially change how tech giants operate.
It was reported that in his extensive 277-page decision, Judge Mehta remarked, “Google has acted as a monopolist and engaged in anticompetitive practices to maintain its monopoly.”
This represents a significant victory for federal antitrust enforcers who have pursued similar cases against other leading technology companies for illegal monopolistic behaviours.
Companies like Meta Platforms, which operate Facebook and WhatsApp, as well as companies like Amazon and Apple., have also faced lawsuits from federal regulators.
The judgment comes after a 10-week trial where it was argued that Google’s substantial payments to remain the primary search engine have impeded the competition’s ability to challenge effectively.
This is a seismic shift in the way search engines and advertising may operate in the future. Already with the advent of AI, search engines look and feel different.
The seven most valuable U.S. tech companies experienced a combined loss of $1 trillion in market value at the start of Monday’s trading session – 5th August 2024
The Nasdaq declined over 3% following its sharpest three-week drop in two years.
Nvidia’s shares fell approximately 6%, while Apple’s dropped more than 4%.
On Monday, as the U.S. markets commenced trading, the market capitalization of the largest tech companies plummeted by about $1 trillion, exacerbating a decline that pushed the Nasdaq into correction territory the previous week.
Markets go up and markets go down
In early trade Nvidia’s market cap decreased by over $300 billion, but it swiftly regained about half of that loss. The chipmaker’s shares ultimately closed down 6.4%, equating to a $168 billion loss. Apple and Amazon saw their valuations fall by $224 billion and $109 billion at market open. Apple’s market cap finished 4.8% lower, a $162 billion decrease. Amazon’s valuation fell by 4.1% at closing, a $72 billion reduction.
Including significant drops in Meta, Microsoft, Alphabet, and Tesla, the top seven tech giants saw a $995 billion loss in market value in the initial moments of trading, although they did recover somewhat as the day went on.
Amazon offers weak guidance citing Olympics and the Trump assassination attempt as cause (consumers are distracted). However, Amazon’s cloud unit reports 19% revenue growth, topping estimates and a 20% increase in business in Q2. Amazon stocks pull back after guidance update.
Intelendures a 22% share plunge dragging down other global microchip stocks from TSMC, ASML to Samsung. Company to cut 15% of workforce, reports quarterly guidance miss.
Meta shares climb 6% on positive earnings data and good revenue forecast. Zuckerberg enthused over AI and how it’s helping create profits suggesting ‘Meta’s advertising growth is proof that BIG AI spending is already paying off.’ However, Meta’s Reality Labs posts $4.5 billion loss in second quarter.
Nintendo profit falls 55% as sales of its ageing Switch console plunge. Nintendo revenue and profit plunged in Q1 as sales of its ageing Switch console decline. Nintendo sold 2.1 million units of its Switch consoles, down 46% on the year. Investors are seeking news surrounding a successor to the Nintendo Switch console.
Apple sales climbed 5%, topping estimates as iPad and services revenue lift despite ongoing issues with iPhone sales slipping in China. Apple is spending more on AI but remains way behind its peers.
Snap shares plunge more than 20% on weak guidance.
Qualcomm beats estimates as phone microchip sales up 12%.
Samsung Q2 revenue and profit comes in above estimates amid strong AI demand.
AMDjumps 5% as global microchip stocks rally. Data centre sales doubled.
Microsoft reported better-than-expected earnings and revenue for Q4
In extended trading on 30th July 2024, the stock experienced a quick decline as attention was drawn to the less-than-expected Azure revenue, despite management’s forecast for growth in the upcoming quarters.
The company’s total revenue saw a 15% increase compared to the previous year.
Despite surpassing earnings and revenue expectations, Microsoft’s shares dropped by up to 7% in extended trading on Tuesday, with investors concentrating on the underwhelming cloud revenue. However, executives offered a positive outlook, anticipating an acceleration in cloud growth during the first half of 2025.
Microsoft one day chart 30th July 2024
Microsoft one day chart 30th July 2024
Microsoft’s cloud division holds significant interest for investors, as it competes with Amazon Web Services (AWS) and Google in the artificial intelligence (AI) work arena. These three tech giants are pouring substantial resources into enhancing AI capabilities, aiming to attract both startups and established companies as generative AI technology swiftly progresses.
For Amazon, AWS has served as a vital profit centre for the past ten years.
Amazon is reportedly preparing to launch a new store section on its site dedicated to low-priced fashion and lifestyle items.
The move is aimed at competing with e-commerce upstarts Temu and Shein, both of which have ties to China.
The new storefront will offer unbranded products, with numerous items priced below $20. Amazon plans to ship these goods directly from China, targeting a delivery window of round 10 days. This initiative is a strategic move by Amazon to counter increasing competition and broaden its assortment while preserving competitive pricing.
While the precise launch date has not been announced, the storefront is anticipated to begin accepting products in the autumn of 2024.
