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🗞️ Microsoft Partners With Anthropic
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Market Performance
S&P 500: 6,617.32 ⬇️ 0.83%
Nasdaq: 22,432.85 ⬇️ 1.21%
Dow Jones: 46,091.74 ⬇️ 1.07%
Microsoft Inks $5 Billion Deal With Anthropic
Microsoft (MSFT) announced a major strategic shift Tuesday, investing up to $5 billion in AI startup Anthropic while Nvidia (NVDA) chips in another $10 billion. The deal indicates that Microsoft is reducing its reliance on OpenAI.
Anthropic's valuation has nearly doubled to $350 billion from $183 billion just two months ago.
The AI company has committed to purchasing $30 billion of Azure compute capacity and contracted for up to 1 gigawatt of additional capacity.
Nvidia and Anthropic will work on engineering and design to optimize Claude AI models specifically for Nvidia's Grace Blackwell and Vera Rubin systems.
Microsoft CEO Satya Nadella framed it perfectly: "We really need to move beyond any type of zero-sum narrative or winner-take-all hype."
Translation? The AI market is massive enough for multiple players, and Microsoft wants its chips spread across the table, not just with OpenAI.
MSFT stock has a Ziggma score of 89 and ranks highly in terms of profitability and financial health.
However, the tech stock, which has increased by 830% over the last decade, may not offer significant upside potential.
Our Takeaway
While Microsoft maintains its 27% stake in OpenAI (valued at $135 billion), adding Anthropic creates competitive leverage and reduces single-vendor risk.
For investors, this signals the AI race is expanding beyond a two-horse competition—and that's healthy for innovation and market dynamics.
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Market Overview 📈
Tuesday delivered the S&P 500's fourth consecutive losing session, its longest losing streak since August, as tech stocks retreated amid valuation concerns and weakness in cryptocurrencies.
The broad index closed down 0.83%, with the Nasdaq falling 1.21% and the Dow shedding 498 points.
The Magnificent Seven stocks led the decline. Nvidia dropped nearly 3% ahead of Wednesday's critical earnings report, while Amazon plummeted over 4% and Microsoft fell almost 3%.
The selloff reflects growing investor anxiety about pricey tech valuations and AI fundamentals, particularly amid a boom in Big Tech debt offerings.
Bitcoin's tumble below $90,000 briefly intensified risk-off sentiment, with the cryptocurrency now down 2% for the year after peaking above $126,000 in early October.
Many tech investors hold substantial crypto positions, raising concerns about broader portfolio liquidations.
CFRA's Sam Stovall suggested the S&P 500 could see an 8-9% decline before bottoming, though strong earnings from Nvidia and solid employment data could reverse the tide.
The key question remains: "When do we monetize all of this capex?" Investors are waiting for AI investments to translate into tangible profits—something not expected until future quarters.
Despite the gloom, 267 S&P 500 stocks advanced, and small-cap stocks bucked the trend with the Russell 2000 gaining 0.8%.
Stock Moves Deciphered 📈
⚒️ Home Depot (HD)
Home Depot shares tumbled 6% after missing third-quarter earnings expectations and slashing its full-year outlook.
The home improvement giant reported adjusted earnings of $3.74 per share, falling short of the $3.84 LSEG consensus estimate.
The company cited ongoing headwinds in the housing market and reduced consumer spending on big-ticket home improvement projects.
⛑️ Medtronic (MDT)
Medtronic shares hit levels not seen since May 2022, reaching new 52-week highs as the medical device maker continues its strong performance.
The stock has benefited from robust demand for its cardiovascular and diabetes management products, as well as improved hospital procedure volumes.
🍿Warner Bros. Discovery (WBD)
Warner Bros. Discovery moved higher as news of a potential bidding war intensified.
With a November 20 deadline for offers, major players like Paramount, Netflix, and Comcast are reportedly preparing bids for all or parts of the media giant, fueling investor optimism for a significant acquisition premium.
Headlines You Can't Miss 👀
⚖️ Meta scored a decisive victory in its FTC antitrust trial, with the judge ruling the agency failed to prove Meta holds a monopoly in social networking.
💰 Blue Owl Capital extended losses for the third straight session as investors in its private fund face big losses and redemptions remain blocked until next year.
📉 Bitcoin briefly crashed below $90,000 to $89,259—its lowest level since April 22—now down 2% for 2025 after peaking above $126,000 in October.
⚡ Cloudflare shares fell nearly 3% as a major outage disrupted some of the world's biggest platforms, including X (formerly Twitter) and ChatGPT.
🔋 Energizer plunged 18% on track for its worst day ever after missing Q4 earnings and issuing dismal guidance, citing Trump tariffs as a key headwind.
📊 18 S&P 500 stocks hit new 52-week lows, including Trade Desk (lowest since November 2022) and Clorox (lowest since December 2014).
🚀 5 S&P 500 stocks reached all-time highs: Eli Lilly, Medtronic, Expeditors International, Ventas, and Welltower—defying the broader market selloff.
📉 Most-shorted stocks are "returning from orbit" after a historic run, with S3 Partners calling October's peak a "blow-off top" as the squeeze rally finally cools.
Trending Stocks 📊
💸Klarna (KLAR)
Klarna tumbled nearly 10% despite beating Q3 revenue expectations in its first earnings report since September's IPO.
The buy-now-pay-later platform posted revenue of $903 million versus the $882 million LSEG estimate.
However, investors focused on the company's $83 million operating loss compared to $13 million in operating profit a year ago, raising profitability concerns.
🤖 Intuit (INTU)
Intuit shares rose marginally after announcing a major AI partnership with OpenAI worth over $100 million annually.
The tax software provider will integrate OpenAI's large language models to enhance its financial products, including TurboTax and QuickBooks.
The deal positions Intuit to leverage cutting-edge AI capabilities to improve customer experiences and generate automated financial insights.
🏈 Amer Sports (AS)
Amer Sports surged 8% after the sports equipment company behind Salomon and Wilson posted adjusted earnings of $0.33 per share, beating the $0.25 FactSet estimate.
Revenue of $1.76 billion also topped the $1.72 billion forecast, demonstrating strong demand across its premium sports brands.
What’s Next?
Key market and macro news 👇
💰 Nvidia reports Q3 earnings Wednesday after close—analysts expect $1.25 EPS (+54% YoY) and $55B revenue (+57% YoY).
🛒 Walmart and Target report later this week, providing crucial insights into the retail sector.
🎤 Over 95% of S&P 500 companies have reported this earnings season, with 78% beating expectations.
📊 Employment data releases could shift sentiment if they show weakness without signaling recession.
🏦 Fed officials continue monitoring tariff impacts on inflation and economic growth
⚠️ Treasury yields remain elevated with 30-year bonds near October 2023 highs
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