Stock Market Weekend Updates - 12|14|25

Welcome to my weekend stock market updates

Last week we saw DOW and S&P 500 hit new all-time high but Nasdaq has lost about 3.5% from its all time high. Tech had worst day last Friday in two months and Nasdaq was down about 1.6% for the week. But felt like the index was down more than 5% for the week because most of the tech stocks were hit hard except Tesla from the magnificent seven. Primarily AVGO, ORCL, HOOD, MSFT, NVDA and many other AI related stocks were hammered. The money moved from tech to non-tech DOW stocks. Does it mean that the days of AI and Tech stocks are over? I conducted a poll in my WhatsApp group and found wide variations on what the members think. I will discuss about it little later. 

Federal Reserver Rate Cut and Updates

The Federal Open Market Committee (FOMC) lowered its key overnight by 0.25% as expected . It brings the borrowing rate in a range between 3.5%-3.75%. In addition, the Fed also announced, it will resume buying short term Treasury securities worth of $40 billion every month beginning last Friday. This was the end of Quantitative Tightening (QT). This is a good sign as it increases liquidity by reducing the borrowing costs and potentially help stock market. This might be the last cut that we saw during the tenure of J Powell before he departs around May 15. 


Other news

  • President Trump said Friday he is focusing on two candidates for next FED chair next year, with former Fed Governor Kevin Warsh and National Economic Council Director Kevin Hassett as leading contenders. But it looks like Trump prefers Warsh who seems to be more favorable to rate cuts. 
  • Per Bloomberg, Elon Musk’s SpaceX plans to go public at around $1.5 trillion valuation in 2026, the largest IPO in history. More on this in my next blog. 
  • Today Tesla Model Y vehicles were spotted driving on public roads in Austin, Texas with no occupants inside, marking its first real-world test of robotaxis operating without any driver or passenger 
  • Microsoft announced plans to invest $17.5 billion in AI infrastructure in India over the next four years.
  • Job openings climbed from 7.2 million in August to 7.65 million in September and 7.67 million in October, extending a slow but steady uptrend.
Earnings last week
Oracle (ORCL): Miss on top line, beat on bottom line.
  • EPS: $2.26 vs. $1.64 expected
  • Revenue: $16.06 billion vs. $16.21 billion expected
Q3 Guidance: EPS: $1.70 - $1.74 in line with analysts’ estimates but revenues between 19% - 21% slightly above projections. Stock was down 11.5% in AH trading.
My View: I guess Oracle's best day is behind it. After that huge rally of pious results, this stock has not gone nowhere but down. The OpenAI connection, Debt concern and some valuation concerns have dominated this stock. But I guess too much negativity, so we may see some bounce. 

Broadcom (AVGO) Q4 FY2025 Earnings 
  • EPS: $1.95 actual vs. $1.87 expected (beat by $0.08)
  • Revenue: $18.02B actual vs. $17.49B expected (beat by $0.53B)
  • Guidance: Revenue $19.1B vs. $18.3B expected.
AI Revenue growth: $8.2B from $4.1B, 100%.
Concerns: Valuations, margin, OpenAI connection.

My View: AVGO had a good quarter and guidance was also good but slightly below Street's estimate. The stock was already up significantly, hence the investors took the opportunity to take profits causing it to fall 13%. But after some consolidation, this stock should bounce back. 

WhatsApp poll - Should Nasdaq Bounce Back before end of the Year?
AI related stocks were hammered. The money moved from tech to non-tech DOW stocks. Does it mean that the days of AI and Tech stocks are over? I conducted a poll in my WhatsApp group and found wide variations on what the members think. Majority 48% said they expect Nasdaq to bounce back, 30% said they have no idea, 22% said they don't think Nasdaq will bounce back. 

Ok, here is my thought. We have seen this rotation game time and again and there is nothing new about it. With the exception of 2022, when tech stocks started stinking for the whole year, other than that always the money moves from tech to non-tech stocks and comes back. Because growth remains on the my of almost every institutional investors mind probably except the bears! Nvidia turned the table in 2023 with AI and since then Nasdaq has flourished. So, has the AI momentum ended now? No, I do not think so. Probably, we are far from it but it does not necessarily mean that the AI stocks will keep going high on a straight line. Currently, we do not see those euphoria since Wall Street is concerned about AI bubble fears from high CapEx vs. delayed monetization, debt financing and so on. But honestly some stocks really look cheaper to me based on their fundamentals and future prospects. For example NVDA, had incredible results and now cheaper than even many conservative stocks despite its phenomenal growth and future prospects. Some of the Institutional investors and hedge funds have increased positions in AI leaders like Meta, Alphabet amid recent dips, with analysts viewing it as a buying opportunity before year-end rebalancing and 2026 growth. I believe some of these stocks may potentially see some bounce before the end of the year - Nvidia (NVDA), Google (GOOG), META, AMZN, MSFT, AVGO, TSLA, HOOD, AMD, PLTR. The momentum and undervalued multiples likely drive year-end gains despite recent tech dips. Many institutional investors and fund managers will be re-balancing their holdings before the end of the year and they do not want to miss the opportunity to show their clients that they hold some of the great names who have/had huge run. This week we have critical economic news viz. CPI and Employment report. Hence, the market may remain cautious. However, if those reports are positive then we may see a major Santa Clause rally. In case the reports are not good then I feel we may see another lackluster week but in that case last week of December could see some rally on the good fundamentally growth stocks due to institutional investors grabbing some positions to show their clients. Hence, we should see Nasdaq to bounce before the end of the year. Having said all these, I may be wrong! I am not a fortune teller and it's jut my personal opinion. So, readers to use their own research but I remain optimistic. 

Economic News this week
TUE, 12/14: U.S. Employment report (NonFarm delayed report - NOV)
THU 12/16: Consumer price index (CPI - NOV)
FRI, 12/7: Consumer sentiment (final - DEC)

Stocks to Watch
NVDA, AVGO, TSLA, GOOG, APLD, HOOD, AMZN, META, PLTR, MSFT, IONQ, AMD, SOXL, TQQQ, TEM

What to expect? 
I am optimistic that we should see Santa Clause rally before the end of the year. I plan to  publish my next blog around the end of the year. I have been doing some extensive research before publishing my next blog for 2026. Next year may be very tricky and may see many ups and downs. Hence, I need to do appropriate due diligence before publishing my next blog. I can also see whether it will be feasible to have an Investment meet by January 1, 2026. Stay tuned!

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