Welcome to the weekend updates
What a volatile week for the technology stocks! So far, we have seen a turbulent November. We saw prolonged government shutdown (longest in history), delayed economic data, hurt consumer sentiment; AI/tech skepticism about AI stocks, rotation to healthcare/energy, lukewarm economic growth etc. Dow hit records mid-week on shutdown as investors took profit from AI stocks and rotated to other sectors. But after the week's wild swings, Nasdaq ended down about 0.5% for the period. However, both the S&P 500 and the Dow held hair gain, up 0.1% and 0.3%, respectively.
So, why did technology stocks got hammered?
A Short seller showed concern about the depreciation of the life of chips/GPU and said that AI stocks like Nvidia (NVDA) and Palantir (PLTR) are in a bubble with overinflated valuations, prompting his $1.1 billion short bets revealed in early November 2025 filings. This triggered a tech sell-off and backlash from Palantir CEO, who called it “market manipulation". The profit taking and apprehension about AI bubble news caused the rotation of money to other non-technology stocks. Honestly, there may be some truth (not sure), but I never believe the short sellers. They are NEVER investors friendly and always there focus is about personal gain. The hedge funds and other were looking or may be orchestrating for such opportunity before NVDA earnings. Let's not forget the past. Remember, DeepSeek, a Chinese AI startup, released its R1 model on January 20, 2025, rivaling ChatGPT at low cost using Nvidia chips. This had triggered a January 27 sell-off, dropping Nvidia’s stock 17% and market cap by $590 billion - the largest single-day loss ever. That sell-off was insane and what happened after that sell off? Almost all the AI stocks had a massive run. I am not saying it may happen again this time. But in my view, current tech stock's pullback may give a good opportunity to end the year on a positive note. Having said that the KEY factor will be, NVDA’s earnings and guidance on this Wednesday, 11/19. This would be of extremely crucial for technology stocks. In other words, Nvidia’s earnings next week should be a pivotal catalyst. I am optimistic that NVDA should have another solid quarter but guidance will be key. We have to keep our finger crossed and watch it.
After the close of Market last Friday, Berkshire disclosed a $4.3 billion stake in Alphabet (GOOG) at the end of Q3. Some investors were surprised with this move given Buffett’s traditional value investing philosophy and reluctance toward high-growth, tech names. Warren Buffett plans to retire as CEO of Berkshire Hathaway at the end of this year. Greg Abel will succeed Warren Buffett as CEO of Berkshire Hathaway, effective January 2026. This is a very good news. Watch this stock on Monday. I believe the new change of leadership may look into other technology stocks. One to keep on eye for future about Berkshire is Amazon (AMZN).
Economic Report this week
As most of you may be knowing, the economic reports are not being released by the labor department due to government shutdown. However, last week the administration said that the September Job Report will be released on Thursday, 11/20.
WhatsApp Poll: my Thoughts
Here is the poll results
- See this pullback as an opportunity: 55%, Fully Invested: 24%, Invested but apprehensive: 9%, No idea what to do: 11%, Be on sideline: 4%
Based on my WhatsApp poll yesterday, majority (55%) of the participants said "they see this pullback as an opportunity". I do agree it as an opportunity - My vote also goes to them. Let me explain - In this volatile market not being invested or fully invested without any cash on hand may not be a great idea. If we do not have some cash on the sideline, then it's not possible to leverage such tech pullback/correction. If we are not invested, we may be safe but won’t have the courage to put our money when tech stocks are getting hammered. If we can’t invest, then being in the stock market doesn’t make much sense. But we all have our own choice as it’s our hard earned money - loss is ours, gain is ours. We should act based on our comfort level. Having said that, let’s remember that ultimately market always go up. But how long the market will go down before going up again is the answer nobody knows! Being scared or being overconfident has its own repercussions. Hence, I try my best to be cautiously optimistic. Market always teaches us some lessons irrespective of how knowledgeable, experienced we are. So, we must learn from our mistakes and keep moving. As I say, as a strategy, taking profits whenever there is an opportunity and hedging the portfolio is often helpful. It may not completely eliminate our losses but it’s an insurance to get some protection when there is blood on the street. Remember, Greed and Fear (Emotions) control the investors. If we want to be in the market, we have to be adaptive to the changing scenarios. As I have said before, some part of the market is becoming little risky and hence we saw the correction in some stocks in the magnitude of 20-30-40% in a matter of days. But I am not alarmed at this time. Sooner or later, a time may come when we can see a bigger correction but possibly not at the moment. Having said all these, the KEY factor will be NVDA earnings this Wednesday and its guidance! So, let's keep an eye. If there is apprehension, one can wait till the earnings to get a clear picture.
Other news
Trump’s proposed $2K tariff dividend, excluding high-income people. It requires congressional approval. If approved, 75K (single), $112.5K (head of household), $150K (joint) - phaseout thresholds for full $2K dividend.
Stocks to WatchNVDA, GOOG, AVGO, SOXL, AMD, HOOD, TSLA, PLTR, APLD, CRWV, NBIS, TQQQ, DASH, AMZN, TEM
What next - Final thoughts
Some of the AI stocks had gone up too much too fast. But most of them have been hammered and lost 20-30-40 or even 50%. The AI bubble has been subsided but AI is well and alive. The NVDA’s earnings and guidance on this Wednesday, 11/19, would be of extremely crucial for technology stocks and set a tone for the rest of the year. if it goes well, it should reignite the tech rally. If not, we may see the bear roar back. Now that the shutdown is over, we may see flurry of economic data. It may either stabilize with the hope of future rate cuts, or heighten jitters if there is continued labor market weakness and sticky inflation. As I wrote in my last blog, November, December and January are the best months for the stock market. I am optimistic but better to be cautiously optimistic and readjust if situation changes as nothing can be predicted with surety in the stock market.
Have a good evening!
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