Tobias

Subsea cables, carrying over 95% of global data, are experiencing explosive growth driven by AI and data center expansion. Big Tech companies like Meta, Amazon, and Google are heavily investing in new cables, with investments projected to double between 2025-2027. Security concerns are rising due to potential sabotage, prompting increased surveillance efforts. Geopolitical tensions, particularly between the U.S., China, and Russia, are influencing regulations and supply chain decisions in this critical infrastructure sector.

Palantir’s stock fell despite strong earnings, prompting CEO Alex Karp to defend the company against short sellers like Michael Burry, accusing them of market manipulation. While the stock is up significantly this year, its high valuation (220x forward earnings) raises concerns. Short interest is low, but analysts like Citron Research suggest the stock is overvalued. Karp maintains confidence, highlighting Palantir’s growth and potential in AI, stating doubters can “exit.” His outspoken defense is not new, previously telling those unhappy with the stock price to simply sell.

Elon Musk announced Tesla may build its own “gigantic” chip fabrication plant (“Tesla terra fab”) to meet growing AI and robotics demands. Currently relying on TSMC and Samsung, Tesla could also partner with Intel. Musk envisions a capacity of 100,000 wafer starts per month, scaling to 1 million, potentially disrupting the semiconductor landscape. This signifies a major shift to vertical integration. Musk also announced the production of Cybercab in April, reinforcing Tesla’s commitment to AI and robotics as drivers of economic growth.

DBS Group CEO Tan Su Shan warns investors to anticipate higher market volatility amid concerns about inflated valuations, especially in AI stocks like the “Magnificent Seven.” She highlights the systemic risk of capital concentration and suggests a 10-20% market correction is possible. Tan, echoing sentiments from other financial leaders, advocates diversification across portfolios, supply chains, and demand distribution, positioning Singapore as a “diversifier market” due to its stable financial and political environment.

Recent equity market pullback, especially in AI stocks, has sparked valuation and contagion concerns. Warnings about a potential market drawdown are increasing. BOE Governor Bailey cautioned about an AI bubble and speculative risks. Despite this, data center construction remains strong, and some see buying opportunities in tech. However, SoftBank’s losses and Michael Burry’s short positions signal waning AI appetite. Strategists suggest caution on US equities, favoring emerging markets benefiting from AI.

Nvidia dominates the AI chip market, but Google is emerging as a silicon contender with its Tensor Processing Units (TPUs). Google’s Ironwood, its seventh-generation TPU, delivers a fourfold performance increase and is targeted at demanding AI workloads. AI startup Anthropic plans to deploy 1 million Ironwood TPUs. Google’s TPUs offer efficiency advantages and drive cloud growth. While Amazon and Microsoft are developing custom chips, Google leads in TPU deployment at scale, with potential for significant cloud market impact. Google is even exploring space-based solar power for TPUs.

This CNBC Morning Squawk newsletter highlights five key market insights: Elon Musk’s potential $1T Tesla compensation pending Optimus robot success, AI stock retreat amid valuation concerns, Trump’s negotiated prescription obesity drug savings, no federal bailout for OpenAI despite revenue projections, and Target’s retail strategy reset to improve the in-store experience. The labor market uncertainty and Target’s operational overhaul are also noted.

Concerns are rising within the cybersecurity community about declining US cyber defense capabilities, particularly with the rise of AI-powered attacks. Budget cuts to key agencies like CISA and the lapse of information-sharing legislation are hindering preparedness. Experts cite a lack of federal leadership, stalled appointments, and a shift of responsibility to under-resourced private entities. The rollback of software security regulations and fragmented industry coordination exacerbate vulnerabilities. Experts warn of a “death by a thousand papercuts” and emphasize the need for stronger government support and coordination.

Archer Aviation’s shares fell 8% after announcing a $650 million stock offering to fund the acquisition of Hawthorne Airport for its air taxi operations, despite beating Q3 loss estimates. The company reported a $129.9 million net loss versus the expected $178.6 million. The stock offering dilutes shares but supports Archer’s expansion plans, including becoming the official air taxi provider for the 2028 LA Olympics. Archer, along with competitors like Joby Aviation, is pursuing FAA certification and expanding globally, with significant operations in the UAE.

Block’s (XYZ) shares fell nearly 8% after Q3 2025 earnings missed expectations. While revenue grew 2% year-over-year, Square’s gross profit growth slowed. Cash App saw robust growth, with gross profit up 24%. Block adjusted its full-year gross profit guidance upward. Despite increased net income, investors are concerned about Square’s slowing growth and competition. Block’s ability to regain momentum and improve profitability will be crucial.