WS #16052
The AI boom is facing a significant reality check as Nvidia's market cap dropped by $200B following an $18B revenue miss from OpenAI, suggesting that AI monetization is lagging behind capex spending. This is compounded by regulatory headwinds, including a planned cooperation deal between the German government and Nvidia that may restrict its operations. While Apple and Meta are collaborating on desktop AI, the broader market is pricing in a slowdown in AI-driven growth expectations. The Nasdaq 100 is recording its worst weekly performance since April 2025, driven by a broad institutional selloff in high-beta technology and consumer discretionary stocks. Tesla shares reversed gains from its Roadster unveiling to trade lower, while Trump Media and Rumble posted significant declines. The fear gauge (VIX) is spiking as traders anticipate that upcoming earnings reports may not be enough to offset the macro headwinds from oil and rising Treasury yields. Amid the broader tech selloff, Apple is showing signs of resilience with its new iPhone Duo selling out instantly and preorders shipping in January 2027. The company is also expanding its AI capabilities through a new collaboration with Meta, aiming to bring large language models to desktops. This partnership signals a shift in the competitive landscape, as rivals team up to challenge the dominance of cloud-based AI providers.
AI Capex Reality Check & Nvidia Sell-off
The AI boom is facing a significant reality check as Nvidia's market cap dropped by $200B following an $18B revenue miss from OpenAI, suggesting that AI monetization is lagging behind capex spending. This is compounded by regulatory headwinds, including a planned cooperation deal between the German government and Nvidia that may restrict its operations. While Apple and Meta are collaborating on desktop AI, the broader market is pricing in a slowdown in AI-driven growth expectations.
The Nasdaq 100 is recording its worst weekly performance since April 2025, driven by a broad institutional selloff in high-beta technology and consumer discretionary stocks. Tesla shares reversed gains from its Roadster unveiling to trade lower, while Trump Media and Rumble posted significant declines. The fear gauge (VIX) is spiking as traders anticipate that upcoming earnings reports may not be enough to offset the macro headwinds from oil and rising Treasury yields.
Amid the broader tech selloff, Apple is showing signs of resilience with its new iPhone Duo selling out instantly and preorders shipping in January 2027. The company is also expanding its AI capabilities through a new collaboration with Meta, aiming to bring large language models to desktops. This partnership signals a shift in the competitive landscape, as rivals team up to challenge the dominance of cloud-based AI providers.