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- 🗞️ Nvidia is Feeling the Heat
🗞️ Nvidia is Feeling the Heat
Big Moves Decoded: KEYS, CMG, and more!
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Market Performance
S&P 500: 6,765.88 ⬆️ 0.91%
Nasdaq: 23,025.59 ⬆️ 0.67%
Dow Jones: 47,112.45 ⬆️ 1.43%
Nvidia vs. Google
Nvidia's (NVDA) dominance in the AI chip market faced a reality check on Tuesday, as shares tumbled following reports that Meta (META) is considering using Google's (GOOGL)tensor processing units (TPUs) in its data centers in 2027.
The stock dropped as much as 7% before recovering to close down 2.59%, while Alphabet surged to fresh highs.
This isn't just about one customer exploring alternatives—it's about the growing realization that Nvidia's near-monopoly (over 90% market share in AI chips) may finally face credible competition.
Google's TPUs, custom-designed chips optimized for AI workloads, have proven their worth with the company's recently released Gemini 3 model, which was trained entirely on TPUs rather than Nvidia GPUs.
Meta is projected to spend $70-72 billion on AI infrastructure this year alone. If Meta diversifies its chip suppliers, it could open the floodgates for other hyperscalers seeking to reduce their reliance on Nvidia.
Nvidia quickly defended its position, stating it remains "a generation ahead of the industry" and offers greater flexibility than application-specific chips like TPUs.
CEO Jensen Huang has emphasized that "scaling laws" remain intact, suggesting continued strong demand for Nvidia's technology.
NVDA stock has a Ziggma score of 100 and ranks higher than most peers in terms of profitability, growth, and financial health.
However, the blue-chip stock, which has increased by 22,700% over the last 10 years, may not offer significant upside potential.
Our Takeaway
While Nvidia's technical leadership appears secure for now, the competitive landscape is shifting.
Companies like Google and Broadcom (up 1% Tuesday) are positioning themselves as viable alternatives for specific AI workloads.
For investors, this signals a maturing market where diversification may replace monopolistic dominance—healthy in the long term but potentially limiting Nvidia's extraordinary growth trajectory.
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Market Overview 📈
Markets rallied on Tuesday as optimism about a Federal Reserve rate cut in December reached new heights, with traders now pricing in an 83% probability—a dramatic jump from 40% just days earlier.
The catalyst? Bloomberg reported that Kevin Hassett, seen as dovish on rates, is the frontrunner to become the next Fed chair, with Treasury Secretary Scott Bessent telling CNBC there's a "very good chance" Trump will announce a decision before Christmas.
The shift in sentiment was remarkable. "I've never seen that kind of volatility in expectations for a Fed cut in the span of a few days," noted Ron Albahary, LNW's chief investment officer.
However, not all news was positive. Consumer confidence plunged to 88.7 in November, its lowest level since April and well below the consensus estimate of 93.2.
Job market concerns are growing, with ADP reporting private companies lost an average of 13,500 jobs weekly over the past four weeks—an acceleration from the 2,500 weekly losses reported just a week ago.
The 30-year Treasury yield retreated from its highest level since October 2023 amid improved rate-cut expectations, providing relief to cyclical sectors.
Retail, homebuilder, and regional banking stocks all surged more than 3% as lower rates would benefit these interest-rate-sensitive industries.
Stock Moves Deciphered 📈
🚀 Keysight Technologies (KEYS)
Keysight Technologies surged 10% after reporting Q4 earnings that surpassed analyst expectations.
The company announced a robust $1.5 billion share buyback program and revealed double-digit order growth, driven by strong demand in AI and 6G wireless technologies.
This positive news led to a price target increase from Citi.
🧴 Bath & Body Works (BBWI)
Bath & Body Works saw its stock climb over 8% following significant insider buying from company directors, signaling strong confidence in the company's future.
This, combined with the stock being oversold, triggered a rebound as investors saw a valuable buying opportunity in the specialty retailer.
⛏️ Albemarle (ALB)
Albemarle shares rose by more than 8% as the demand for lithium continues to grow. The stock has been on an upward trend, surging 26% in the past month.
Positive sentiment in the lithium market, along with a newly announced dividend, contributed to the stock's strong performance.
Headlines You Can't Miss 👀
📊 Alphabet hit all-time highs as Meta reportedly considers spending billions on Google's AI chips, validating the tech giant's custom silicon strategy.
💼 Best Buy raised its full-year forecast after beating quarterly sales expectations, driven by strong demand for tech upgrades, including computers and gaming consoles.
👔 Dick's Sporting Goods plans to close numerous Foot Locker stores as part of restructuring following its acquisition, with executive chairman Ed Stack saying they need to "clean out the garage."
📹 Zoom Communications jumped nearly 10% after hours on stronger-than-expected Q3 earnings and increased its share buyback authorization by $1 billion.
📉 Estée Lauder was downgraded to sell by Rothschild & Co Redburn, which warned that mid-term operating margins are at risk despite early signs of improvement.
🏦 U.S. Budget Deficit widened to $284.3 billion in October, up nearly $27 billion year-over-year, with net interest on the $38.3 trillion debt totaling $91 billion.
🎯 34 S&P 500 Stocks hit new 52-week highs Tuesday, including General Motors (all-time highs since its 2010 IPO), Ralph Lauren (highs since its 1997 IPO), and Johnson & Johnson (highs since its 1944 listing).
Trending Stocks 📊
🤖 Broadcom (AVGO)
Broadcom shares climbed almost 2% on Tuesday, extending Monday's impressive 11% rally, as investors recognized the company's critical role in designing Google's Tensor Processing Units.
As Meta considers adopting Google's TPUs for its massive data center operations, Broadcom stands to benefit significantly from increased demand for custom AI chip design services.
The company's expertise in application-specific integrated circuits (ASICs) positions it as a key enabler of the diversifying AI chip market, offering an attractive alternative play to Nvidia's dominance.
🌮 Chipotle Mexican Grill (CMG)
Chipotle stock jumped over 7% as the company announced the appointment of Carnival Corporation's CEO, Josh Weinstein, to its board of directors.
The stock, which had been down significantly year-to-date, was also seen as undervalued, prompting a relief rally as investors reacted to the positive news.
🏠 Builders FirstSource (BLDR)
Builders FirstSource experienced a gain of over 8% due to a combination of factors.
The company's Q3 earnings beat analyst expectations, and the broader homebuilder sector rallied on hopes of a December Federal Reserve interest rate cut, which would lower mortgage rates and boost housing demand.
What’s Next?
Key market and macro news 👇
🚜 Deere & Co. Earnings: The agricultural and construction equipment giant is set to report its quarterly earnings, offering a look into the health of these key sectors.
🚗 Li Auto Inc. Earnings: The Chinese electric vehicle maker will release its third-quarter financial results, providing insight into the competitive EV market.
📊 The second estimate for third-quarter 2025 GDP and the Core PCE Price Index are scheduled for release, providing key insights into economic growth and inflation trends.
🛒 Data on durable goods orders and wholesale inventories will provide insight into business investment and demand, which can signal future economic activity.
💸 Consumer spending data for Black Friday weekend will provide crucial holiday retail insights.
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