Fall

The leaves on Wall Street went from green to red this week. So did the biggest stocks. 

US$3.5T was wiped out from AI stocks in October. Intel ($INTC) lost 43%, while CoreWeave ($CRWV) and Nebius ($NBIS) lost over 36% each. Even mega sets of earnings from Apple ($AAPL) and Palantir ($PLTR) didn’t initially turn the tide. 

Apple reported a record US$7.58B in iPhone revenue, while its services segment also hit a new all-time high of US$5.2B. Palantir’s commercial revenue of US$984M grew 148% YoY, and topped government revenue for the first time.

While both stocks declined, Tuesday’s after-market results from AMD ($AMD) broke the fall for chip stocks. $AMD gained 8% after reporting US$13.4B in revenue, with CEO Lisa Su saying that she expects revenue to grow more than 80% in 2027.

Super Micro ($SMCI) was another tech stock gaining ground after a solid earnings print, rising as much as 11% in the after-hours session. The company has now grown quarterly revenue 10x in the last three years.

Microsoft ($MSFT), Nvidia ($NVDA) and Amazon ($AMZN) also gained more than 2%, as investors focused on the potential impact to stocks from the U.S. midterm elections. According to JPMorgan, Democrats controlling the Senate could potentially trigger another AI selloff.

It might have been a situation that investors had already positioned for, given the AI trade’s beating in recent weeks. Bill Ackman’s Pershing Square ($PS) acknowledged that just under half the S&P 500’s stocks were down in the last quarter.

But the fund’s letter to shareholders presents the current market backdrop as a ‘rich opportunity’ given that 70% of companies in the index are trading at PE multiples below what they started the year with. It’s the rationale behind seven new investments this year, including Netflix ($NFLX) and Alcon ($ALC).

The leaves may have turned red this week, but if Pershing Square is right, the real harvest could still be ahead. 

This is not financial advice nor a recommendation to invest in any of the securities listed. The information presented is for general information purposes only and intended to be of a factual nature only. Past performance and forecasts are not a reliable indicator of future performance. The value of your investments can go down as well as up and you may receive back less than your original investment. The author of this article and other employees of Stakeshop Pty Ltd may hold positions or have financial interests in the company (or companies) discussed above. As always, do your own research and consider seeking financial, legal and taxation advice before investing.

Samy Sriram

Markets Analyst

Samy is a markets analyst at Stake, with seven years of experience in the world of investing, working across roles in private banking, venture capital and financial media. She has a Master’s degree in Finance and Data Analytics from The University of Sydney Business School.