Edition #181
Investing Unlocks: How to Read the Hot Topics From The Last 7 Days
News, earnings, analyst moves and charts worth your time.
AI Jitters Hit Tech as Midterms Loom đłď¸
Last week, a tech sell-off pulled the S&P 500 and the Nasdaq down, as big AI spenders with soaring costs and weaker cash flow worried investors. The Federal Reserve held rates at 3.75% to 4%, though two officials pushed for a hike after Septemberâs increase, keeping a December move firmly in play. Small caps held up better, with the Russell 2000 still up 1.3% for the week despite a late slide, a sign money is rotating away from crowded tech names. Economic growth in the third quarter hit its fastest pace in a year, a reminder that the broader economy remains sturdy.
This week, Tuesdayâs midterm elections will decide control of Congress, and Fridayâs jobs report is expected to show around 55,000 new jobs after a weak September. A strong number could raise the odds of a December rate hike, which tends to weigh on growth stocks. More than 130 S&P 500 companies report, including Apple, AMD and Palantir, testing whether heavy AI spending is starting to pay off.
Hot Topics
Google parent Alphabet loses half a trillion in a day
Alphabet shares fell more than 13% after search and ad sales missed expectations, wiping out over $500 billion in its worst trading day ever and reviving fears that AI chatbots are eating into Googleâs core search business. Itâs a clear sign that Wall Street is losing patience with Big Techâs AI spending unless it shows up in the numbers.DoorDash buys Instacart in food deliveryâs biggest deal yet
DoorDash agreed to buy grocery delivery rival Instacart for about $17 billion. It suggests food delivery apps are consolidating to defend their turf against Amazon and Walmartâs grocery push.Biggest crypto heist ever hits Binance
Hackers linked to North Korea stole an estimated $6.3 billion from crypto exchange Binance, the largest crypto theft on record. This is a reminder that even the biggest names in digital assets arenât immune to catastrophic breaches.Midterms add a dose of uncertainty for markets
With US midterm elections days away and Wall Street expecting Democrats to retake at least one chamber of Congress, investors are bracing for a volatile stretch in stocks and bonds. It matters because the outcome could shift the policy backdrop for everything from AI regulation to taxes.Oil markets stay jumpy as Middle East risks linger
Oil prices and shipping costs have swung on the ongoing US-Israel-Iran tension, and the IEA expects tightness in diesel markets to run into 2027. This keeps pressure on pump prices and shipping costs that eventually show up in the price of everyday goods.
Broadcomâs Anthropic Bet Comes Due
Broadcom has been one of the yearâs hardest-hit AI chip stocks, sitting roughly 30% below its June record. Anthropicâs recently disclosed IPO filing gave the bulls something solid to point to. The Claude maker disclosed about $161B in five-year equipment leases with Broadcom, its largest single compute commitment. That fits a bigger shift. Big AI labs are moving from off-the-shelf graphics chips toward custom chips built for their own workloads, and Broadcom designs those for Google, Meta and OpenAI too. Management expects AI chip sales of $58B this fiscal year, rising to about $115B next year and $230B the year after.
The catch is how it all gets paid for. Bank of America, Citi, Morgan Stanley and Blackstone have arranged $63B in financing to buy chips and lease them to Anthropic, with Broadcom agreeing to cover some potential losses if the equipment loses value. Moodyâs has warned that Broadcomâs risk would rise if many similar deals pile up quickly. That ties a big slice of future growth to one customerâs ability to keep paying, and to an IPO the market has not yet priced. Watch Anthropicâs listing and whether Broadcom keeps lending its balance sheet to win orders.
Earnings Performance
Caterpillar Inc. (NYSE: CAT)
Caterpillar shares fell about 9% on October 29 even though third quarter earnings beat forecasts and its order backlog hit a record $78.1 billion, up roughly 96% in a year. Investors wanted a raised outlook to justify a premium price, and the company kept its full-year guidance unchanged.
Other Earnings Updates
Reporting this week: Constellation Brands, Arm Holdings, Qualcomm, McDonaldâs, CVS Health, MercadoLibre, AppLovin, and Novo Nordisk among others.
Upgrades and Downgrades đ
The rating changes that caught our eye this week, and why the analysts moved.
Analyst ratings are opinions, not recommendations. Always do your own research.
Googleâs AI Eats Social Traffic
Social media stocks have badly lagged the market this year, and last week showed why. Reddit fell 29% on Friday, its biggest one-day drop, after warning that Googleâs AI-powered search was cutting referral traffic and could shrink its user base. Daily visitors could fall by a low double-digit percentage this quarter from about 130 million if that trend continues. Pinterest dropped nearly 8% after missing forecasts and guiding the holiday quarter below estimates. Meta slid about 8% after lifting its 2026 spending plan to $135B to $145B. The core businesses still look healthy. Reddit beat both revenue and earnings forecasts, and Meta grew sales 26% to $64.6B.
The real worry is who owns the audience. Reddit built its growth on free clicks from Google, and that tap is tightening. Its answer is to require logins for most content, which may deepen loyalty but shrink reach. Even after the crash it trades at about 19 times forward earnings, against roughly 8 for Snap and Pinterest. Metaâs issue is different. Its quarterly AI spending outran operating cash flow for the first time. Watch Redditâs user numbers and Metaâs 2027 budget.