By Dan Kemp
Publication Date: 2025-11-24 00:00:00
Tech Stocks Under Pressure
Nvidia’s results were the centerpiece of a turbulent week in which the US market fell 1.9%. Despite surprising investors with better-than-expected profits, Nvidia NVDA fell 5.9% and is now down 15.7% from its peak in late October. Amazon AMZN also fell sharply, down 5.25% in a week in which it announced a $12 billion US bond issue to fund data center expansion. These declines precipitated sharp falls in the technology and consumer cyclical sectors that is being attributed to growing skepticism about the scale of investment being made in AI.
Communications Services Counter the Tech Narrative
However, the 2.9% rise in communications services stocks suggest a more nuanced reality. Despite raising $25 billion of debt to support AI development earlier this month, Alphabet GOOG rose 8.2% over the week as Google’s parent company benefited from the news of a $3.7 billion investment from Berkshire Hathaway in September and a favorable judgment in a dispute with the Department of Justice. In contrast, sector heavyweights Meta Platforms META and Netflix NFLX both fell sharply. Rather than a growing rejection of AI investment, these diverse outcomes may indicate that investors may be becoming more selective in identifying companies able to deliver an attractive return from the current spending on AI.
Uncorrelated Stock Sectors Perform
Consumer defensive, healthcare and real estate were the only other sectors to rise last week. Consumer defensive and…