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🗞️ Warren Buffett Remains Cautious
Big Moves Decoded: RDDT, FSLR, and more!
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Market Performance
S&P 500: 6,840.20 ⬆️ 0.26%
Nasdaq: 23,724.96 ⬆️ 0.61%
Dow Jones: 47,562.87 ⬆️ 0.09%
Berkshire’s Cash Pile Touches New Record
Warren Buffett's Berkshire Hathaway (BRK.B) reported a sharp rebound in operating profit, but what's really turning heads is the company's record-breaking cash pile of $381.6 billion.
That's right—Berkshire is sitting on more cash than ever before, surpassing the previous high of $347.7 billion set earlier this year.
Buffett didn't buy back a single share during the first nine months of 2025, despite Berkshire's stock pulling back.
The Oracle of Omaha was also unimpressed by other opportunities, netting a $10.4 billion taxable gain from selling equities in the third quarter.
Meanwhile, operating profit jumped 34% year-over-year to $13.5 billion, driven by a more than 200% surge in insurance underwriting income.
Buffett announced in May that he's stepping down as CEO at year's end after six legendary decades at the helm.
Greg Abel, Berkshire's vice chairman of non-insurance operations, will take over as chief executive, while Buffett remains chairman. Abel will also start penning the annual letters in 2026—big shoes to fill.
Berkshire's shares have tumbled by double digits from all-time highs following the announcement, partially reflecting the so-called Buffett premium—the extra price investors pay for the billionaire's unmatched track record.
That said, Berkshire did make its largest deal since 2022 last month, acquiring Occidental Petroleum's petrochemical unit, OxyChem, for $9.7 billion in cash.
Source: App Economy Insights
Our Takeaway
Buffett's massive cash stockpile signals he's struggling to find attractive investments at current valuations.
As the leadership transition approaches, investors should watch how Abel deploys this war chest.
Will he maintain Buffett's disciplined approach, or will Berkshire become more aggressive under new management?
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Market Overview 📈
The stock market closed higher on Friday, marking the end of a strong week and month for Wall Street.
October—historically volatile—saw the S&P 500 climb 2.3%, the Nasdaq jump 4.7%, and the Dow advance 2.5%, marking its sixth consecutive positive month for the first time since 2018.
Amazon was the star of the day, rallying 9.6% after reporting that AWS revenue increased 20% in the third quarter, exceeding expectations.
CEO Andy Jassy said AWS is "growing at a pace we haven't seen since 2022," with AI and core infrastructure experiencing "strong" demand.
This drove broader enthusiasm for AI-related stocks, with Palantir rising 3% and Oracle gaining 2.2%.
Netflix added 2.7% after announcing a 10-for-1 stock split, while Tesla jumped 3.7%.
The AI spending surge is becoming a key metric for investors. Bank of America noted that, with more than $600 billion in capital expenditures committed for next year, "investors will be paying attention to how that spending comes back to each company in the form of growing AI sales."
Meanwhile, Federal Reserve officials are striking a cautious tone. Dallas Fed President Lorie Logan said she would have opposed this week's rate cut, citing "too high" inflation and a labor market only "cooling slowly."
Kansas City Fed President Jeffrey Schmid, who voted against the cut, noted that equity markets are near record highs and narrow corporate bond spreads suggest financial conditions aren't particularly tight.
Stock Moves Deciphered 📈
🧬 Illumina (ILMN)
Illumina gained 25% after delivering strong third-quarter earnings that beat analyst expectations.
The genomic sequencing company raised its full-year 2025 guidance, signaling confidence in future performance and boosting investor sentiment.
The upgrade reflects optimism about Illumina's market position in the rapidly growing precision medicine sector, where demand for DNA sequencing continues to accelerate.
💾 Western Digital (WDC)
Western Digital rallied on a strong fiscal first-quarter 2026 earnings report, with revenue up 27% year-over-year.
Surging demand for AI-driven storage solutions powered the results, as data centers rush to expand capacity for artificial intelligence workloads.
The company also announced a dividend hike, fueling investor optimism about its cash flow generation and commitment to returning capital to shareholders.
🤖 Monolithic Power Systems (MPWR)
Monolithic Power Systems declined 8% as investors took profits following a massive run-up in October.
The stock had reached a 52-week high before its earnings report, resulting in a modest pullback.
Despite the decline, MPWR's fundamentals remain strong, with the company continuing to benefit from robust demand for power management solutions in AI infrastructure and electric vehicles.
⛑️ DexCom (DXCM)
DexCom plunged OVER 14% despite beating third-quarter earnings and raising 2025 guidance.
The continuous glucose monitoring leader spooked investors when executives signaled that 2026 growth could fall short of expectations.
Manufacturing issues that are pressuring margins, added to concerns, overshadow the company's strong current performance and lead to a sharp selloff in the stock.
Headlines You Can't Miss 👀
📊 AMD shares surge 58% in October, and the chip stock is on pace for its best month since January 2001, pushing year-to-date gains to nearly 112%.
🤝 UBS says a modestly positive outcome from the Trump-Xi meeting may be sufficient for global markets, supporting stock rallies in both countries.
🍫 Tariffs, inflation, and high cocoa prices have driven up chocolate costs by nearly 30% since last Halloween, with a 100-piece variety bag now priced at $16.39, compared to $7.20 in 2020.
🎬 Netflix stock split fuels blue-chip speculation. The 10-for-1 split brings shares from $1,100 to $110, positioning Netflix for potential Dow inclusion.
🖼️ Getty Images jumps 19% on Perplexity deal. A multi-year licensing agreement allows Perplexity AI to display creative and editorial content through its AI-powered search tools.
🏦 Brighthouse Financial soars 27% after Financial Times reports Aquarian Holdings in advanced talks to buy the North Carolina-based life insurer and take it private.
Trending Stocks 📊
🚀 Cloudflare (NET)
Cloudflare climbed 11% after third-quarter earnings and revenue topped analyst estimates.
The provider of cloud-based security services earned $0.27 per share excluding one-time items versus the $0.23 consensus estimate.
Fourth-quarter guidance also came in strong, with revenue projected at up to $589.5 million, compared to the estimated $580.1 million.
🧑💻 Reddit (RDDT)
Reddit's stock surged more than 7% after the company surpassed third-quarter estimates with strong advertising and user growth.
Revenues surged 68% year-over-year to $585 million, beating the $546 million estimate.
Active advertisers grew 75% year-over-year, while the fourth-quarter sales outlook of $655-665 million topped the $638 million forecast.
⚡️ First Solar (FSLR)
First Solar surged 14% after reporting a 79% year-over-year revenue increase in its third-quarter earnings.
Record sales and a raised full-year outlook outweighed a slight miss on earnings per share.
The solar panel manufacturer continues to benefit from strong domestic demand and favorable policy tailwinds supporting renewable energy adoption.
What’s Next?
Key market and macro news 👇
🎤 Palantir Technologies (PLTR) is scheduled to report its third-quarter 2025 earnings after the market closes. The company has a history of surprising analysts, and its results will be closely watched.
🏠 Realty Income (O), a real estate investment trust, is scheduled to report its earnings and should offer a glimpse into the health of the commercial real estate market.
📊 The Institute for Supply Management will release its Manufacturing PMI for October. This report serves as a key indicator of the manufacturing sector's health and can significantly influence investor sentiment.
🚜 The Census Bureau will release data on construction spending for September. This report provides insight into the health of the construction sector and the broader economy.
🚗 Automakers will report their domestic vehicle sales for October. These figures offer a snapshot of consumer demand and the health of the automotive industry.
Chart of the Day
Source: Carbon Finance
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