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- 🗞️ Amazon Invests $10B in OpenAI
🗞️ Amazon Invests $10B in OpenAI
Big Moves Decoded: ORCL, CEG, and more!
Market Performance
S&P 500: 6,721.43 ⬇️ 1.16%
Nasdaq: 22,693.32 ⬇️ 1.81%
Dow Jones: 47,885.97 ⬇️ 0.47%
Amazon Enters the AI Arms Race
Amazon (AMZN) is reportedly in talks to invest over $10 billion in OpenAI while simultaneously securing an agreement for the AI leader to use Amazon's custom AI chips.
This potential partnership marks a significant strategic shift for both companies and signals the intensifying competition in the artificial intelligence infrastructure market.
The deal comes at a crucial time for OpenAI, which has been aggressively expanding its infrastructure commitments—totaling more than $1.4 trillion—across multiple chip providers, including Nvidia, AMD, and Broadcom.
For Amazon, this represents a calculated attempt to compete with Nvidia's overwhelming dominance in the AI chip market, where the chip giant commands a market cap of $4.33 trillion.
What makes this particularly interesting is the emerging pattern of "round-tripping" investments in AI: companies invest in each other, then the recipient uses those funds to purchase products from the investor.
Amazon has already invested $8 billion in OpenAI rival Anthropic, but clearly sees value in diversifying its AI portfolio.
Amazon stock has a Ziggma score of 87 and ranks above most peers in terms of profitability, growth, and financial health.
The tech giant has returned close to 556% in the past decade and trades at a steep valuation in December 2025.
Our Takeaway
While this deal strengthens Amazon's position in the AI infrastructure race, it also highlights growing concerns about AI industry valuations and sustainability.
With OpenAI not expected to be profitable until 2030 and requiring hundreds of billions in capital, investors should watch whether these massive investments translate into actual revenue—or if we're witnessing the inflation of an AI bubble.
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Market Overview 📈
Wednesday's session saw a broad-based selloff as investors rotated out of high-flying AI stocks following news that raised concerns about Oracle's data center financing.
The tech-heavy Nasdaq bore the brunt of the decline, falling 1.81%, while the S&P 500 dropped 1.16%. This marked the fourth consecutive negative day for both benchmark indices.
The catalyst for the downturn was a Financial Times report that Blue Owl Capital had withdrawn from Oracle's $10 billion Michigan data center project, citing concerns about Oracle's debt and spending levels.
Though Oracle disputed the report, the damage was done—the stock fell 5.4% and dragged down the entire AI ecosystem.
Other AI-adjacent stocks tumbled in sympathy: Broadcom lost over 4%, Nvidia dropped nearly 4%, AMD shed more than 5%, and Alphabet declined more than 3%.
The selloff reflects growing investor skepticism about who will actually monetize the massive investments being poured into AI infrastructure.
The Technology Select Sector SPDR ETF (XLK) is down 2.6% for December, with Oracle and Broadcom declining 11% and 19%, respectively.
Stock Moves Deciphered 📈
⛽️ Devon Energy (DVN)
Devon Energy's stock climbed 5.3% as Citigroup raised its price target to $44 while maintaining a "Buy" rating, citing improving fundamentals in the oil and gas sector.
The upgrade came as crude oil prices rebounded from near four-year lows following President Trump's announcement of a blockade on Venezuelan tankers.
The geopolitical development provided a tailwind for energy producers who have struggled with weak oil prices in recent weeks.
⚡️Constellation Energy (CEG)
Constellation Energy's stock declined 6.7% following the collapse of the Oracle-Blue Owl data center deal, even though it was not directly involved in the project.
As one of the nation's largest nuclear power providers, Constellation stands to benefit significantly from the massive electricity demands of AI data centers.
The Michigan facility's uncertain future raised questions about the pace of data center expansion and the corresponding growth in power demand.
🧪 FMC Corporation (FMC)
FMC Corporation shares surged 4.7% as investors digested the company's recently announced restructuring plan, which includes plant closures and cost-cutting measures across its Asian operations.
Management expects the initiatives to generate significant long-term cost savings and improve operational efficiency.
The agricultural chemicals producer has faced headwinds from weak crop protection demand and pricing pressure in key markets.
Headlines You Can't Miss 👀
📊 Medline shares surged 22% in their Nasdaq debut after the medical supplier raised $6.26 billion in 2025's biggest global IPO, pricing at $29 per share.
⚖️ U.S. prosecutors charged Tricolor Holdings executives with systematic fraud involving billions in misrepresented loan collateral, sending shockwaves through the banking sector.
🛡️ Defense stocks declined after reports emerged of a proposed Trump executive order limiting stock buybacks, dividend payouts, and executive compensation for contractors.
💊 Recursion Pharmaceuticals jumped 5.5% following a JPMorgan upgrade to overweight with a price target implying 162% upside from the previous close.
✈️ Frontier Group gained 5.4% on Bloomberg reports that the airline is in merger discussions with Spirit Aviation.
🔋 Lithium stocks rallied after China announced plans to revoke mining licenses—Atlas Lithium popped 8%, while Albemarle and SQM each gained 4%.
🏨 Eight S&P 500 stocks hit new 52-week highs, including Hilton Worldwide and Marriott International at all-time levels, and Tesla at highs dating back to its 2010 IPO.
🛢️ Oil rebounded from 2021 lows, rising 1.45% to $56.07 per barrel after President Trump ordered a Venezuela tanker blockade.
Trending Stocks 📊
🏡 Lennar Corporation (LEN)
Lennar's shares slipped 4.5% despite beating fourth-quarter revenue estimates with $9.37 billion versus the $9.02 billion consensus.
The homebuilder's disappointing first-quarter guidance overshadowed the beat—projecting 17,000-18,000 deliveries and homebuilding gross margins of 15-16%, both below analyst expectations, signaling continued caution about housing market conditions.
🍿 Warner Bros. Discovery (WBD)
Warner Bros. Discovery's board unanimously recommended that shareholders reject Paramount Skydance's takeover bid in favor of Netflix's "superior" proposal.
The recommendation sent Warner shares down 2.4% while Netflix ticked 0.2% higher.
The competing bids highlight ongoing consolidation in the media industry as traditional entertainment companies seek scale to compete in streaming.
👕 Gap (GAP)
Gap shares rose after Baird upgraded the retailer to “outperform” from “neutral”, raising its price target to $33 (implying 22% upside).
The analyst cited tangible results from brand reinvigoration efforts at Old Navy and Gap, including consistent market share gains and improved customer acquisition metrics, which validate the turnaround strategy.
What’s Next?
Key market and macro news 👇
📊 NY Fed Manufacturing Index to release which measures regional industrial production trends and business sentiment in critical economic region.
🏠 NAHB Housing Market Index for December reflects builder sentiment on housing demand; a strong reading supports homebuilder stocks and construction sector valuations.
🇨🇦 Canadian CPI Data for November will be released, and inflation readings could pressure expectations for Bank of Canada policy.
🇪🇺 European Industrial Production October data affects European equity markets and signals the trajectory of global manufacturing demand.
💬 Federal Reserve Governor Stephen Miran delivers a speech on monetary policy and economic outlook, influencing rate expectations and equity valuations.
🇮🇳 India WPI Inflation data for November impact commodity prices, emerging-market currencies, and U.S. multinational earnings from Asian operations.
🇧🇷 Brazil Economic Activity Index for October at 12:00 PM UTC measures Brazilian economic performance; weakness signals emerging market slowdown affecting U.S. corporations and commodities.
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