Tobias

The markets experienced volatility due to geopolitical events, economic data, and Big Tech earnings. Trump and Xi agreed on rare earths, trade, and fentanyl. The Fed cut interest rates by 25 basis points but tempered expectations for future cuts. Alphabet, Meta, and Microsoft beat earnings estimates, signaling increased capital expenditure driven by AI demand, alleviating fears of a dot-com bubble. Trump’s rare earth deals aim to challenge China’s dominance but face significant hurdles.

Key market takeaways include divergent reactions to earnings from the “Magnificent Seven” tech stocks (Alphabet, Microsoft, Meta), a cautious Fed rate cut, and a potential US-China trade compromise involving tariffs, fentanyl, and rare earth minerals. Chipotle faces challenges, while Restaurant Brands shines. Comcast’s earnings exceeded expectations amid speculation of a Warner Bros. Discovery acquisition, pending regulatory approval. Focus remains on Apple and Amazon’s upcoming reports for further tech sector insights.

Venture capitalist Oren Zeev’s early “relationship investment” of $50,000 in a nascent startup led to StreamOnce, later acquired by Jive Software. This initial bet paved the way for Navan (formerly TripActions), a business travel platform poised for an IPO valuing it at over $6 billion, potentially yielding Zeev over $1 billion. Zeev’s success stems from a gut-feeling investment approach. He operates as a solo GP, making quick decisions and valuing founder relationships. His strategy, including reinvesting management fees, aligns him with LPs.

Meta Platforms’ stock plummeted despite a strong earnings report, triggered by investor apprehension over escalating AI spending. The company revised its 2025 capital expenditure forecast upwards to $70-72 billion, signaling an intensified pursuit of advanced AI technologies. CEO Zuckerberg defended the aggressive investment, emphasizing early returns and Meta’s ambition to build capacity for “superintelligence.” The increased spending reflects a broader industry trend, with Alphabet and Microsoft also increasing their capital expenditure projections. Meta invested heavily in AI startup Scale AI, and secured new cloud computing agreements. A $15.93 billion tax charge also impacted earnings.

Alphabet’s Q3 earnings report exceeded expectations, sending shares up 4%. Revenue hit $102.35 billion, a first for the company. Increased capital expenditure, now projected at $91-93 billion, reflects investment in AI infrastructure and Google Cloud’s growth. Google Cloud backlog reached $155 billion. Analysts see Alphabet addressing AI concerns and revised price targets upwards, with Goldman Sachs setting a $330 target and JPMorgan $340, highlighting confidence in Alphabet’s execution and AI’s positive impact on Google Search revenue.

Venture capitalist Joe Lonsdale argues that leading AI companies are understating the capital and energy resources needed to realize their ambitions, potentially misleading investors. He believes this underestimation necessitates frequent capital raises. Lonsdale’s comments come amidst an AI investment surge and warnings of a potential bubble. He suggests current spending is being underestimated and favors AI applications demonstrating clear economic value, questioning the long-term sustainability of the current AI investment trajectory.

Jim Cramer’s “Investing Club” is upgrading Meta Platforms to a buy-equivalent rating despite a recent stock dip following earnings. While Meta’s increased AI investments sparked investor concern, Cramer believes the long-term potential outweighs the short-term anxieties. He highlights that these investments will enhance Meta’s video capabilities, benefiting advertisers and driving user engagement. The upgrade follows strong quarterly revenue and EPS, coupled with raised revenue guidance. While acknowledging spending concerns, Cramer emphasizes Zuckerberg’s aggressive approach and Meta’s ability to reallocate computing power, making the dip a strategic entry point.

Roblox shares fell 15% after the company projected higher capital expenditures, raising margin concerns. While Q3 revenue surged 48% to $1.36B and bookings jumped 70% to $1.92B, exceeding expectations, increased DevEx costs and safety investments contributed to the revised outlook. Roblox raised its full-year bookings guidance but average bookings per DAU missed estimates. The company is also facing pressure to improve child safety and is involved in related lawsuits, prompting investments in safety measures and collaboration with safety organizations.

Dynamix Corporation III raised an upsized $175 million in its IPO, potentially reaching $201.25 million with additional shares. The SPAC targets acquisitions in AI, energy, or digital assets, aiming for companies valued at $1 billion or more. Advisors from Prologis and Nvidia will aid in identifying suitable targets. This debut occurs during a cautious recovery phase for the SPAC market after a period of decreased activity and scrutiny, requiring Dynamix III to demonstrate strong valuation and synergies to investors.

Apple (AAPL) reported strong fiscal Q4 2025 earnings, exceeding expectations with EPS of $1.85 and revenue of $102.47 billion. While iPhone revenue slightly missed estimates, Mac and Services revenue beat expectations, driving overall growth. CEO Tim Cook anticipates a minimum 10% revenue increase for the December quarter, fueled by strong iPhone 17 demand. The company reported $416 billion in total revenue for fiscal year 2025, a 6% increase year-over-year. Supply chain constraints and tariffs impacted specific product lines, but Apple absorbed the tariff costs.