Wall Street is heading into November with serious momentum. The S&P 500 gained 2.63% in October, the Nasdaq surged 2.99%, and the Dow climbed 2.89%. Historically, November is the stock market’s favorite playground. Since 1927, the S&P 500 has gained about
The tension you identified between Meta's capex acceleration and actual returns crystallizes the entire AI investment thesis right now. When Meta raises 2025 guidance and warns spending will accelerate significantly faster while simultaneously taking a $15.93B tax charge, that creates a profitability squeeze that even 26% revenue growth can't fully justify at current multiples. The contrast with AWS hitting $200B backlog shows which companies are building infrastructure customers are paying for versus which ones are building it hoping customers will come. What's fascinating about the November setup is that seasonal tailwinds plus 92% positive presidential year correlation could paper over these fundamental tensions short term, but if Consumer Discretionary and Technology sectors both surge while Industrial capex for data center buildouts slows, that divergence would signal the market sees AI adoption decelerating before monetizaton catches up.
AMD's 60% October surge on the OpenAI and Oracle partnerships is impressive but the real value is in the tens of billions in potental annual revenue these deals represent. Wall Street's $300 price targets seem aggressive but not unreasonable if AMD can execute on these massive contracts while maintaining margins. The key difference between AMD now versus previous cycles is they're winning based on AI infrastructure capability, not just being the cheaper alternative to NVIDIA. If they can prove the revenue is sustainable in Tuesday's earnings, those price targets might actually be conservative.
The tension you identified between Meta's capex acceleration and actual returns crystallizes the entire AI investment thesis right now. When Meta raises 2025 guidance and warns spending will accelerate significantly faster while simultaneously taking a $15.93B tax charge, that creates a profitability squeeze that even 26% revenue growth can't fully justify at current multiples. The contrast with AWS hitting $200B backlog shows which companies are building infrastructure customers are paying for versus which ones are building it hoping customers will come. What's fascinating about the November setup is that seasonal tailwinds plus 92% positive presidential year correlation could paper over these fundamental tensions short term, but if Consumer Discretionary and Technology sectors both surge while Industrial capex for data center buildouts slows, that divergence would signal the market sees AI adoption decelerating before monetizaton catches up.
AMD's 60% October surge on the OpenAI and Oracle partnerships is impressive but the real value is in the tens of billions in potental annual revenue these deals represent. Wall Street's $300 price targets seem aggressive but not unreasonable if AMD can execute on these massive contracts while maintaining margins. The key difference between AMD now versus previous cycles is they're winning based on AI infrastructure capability, not just being the cheaper alternative to NVIDIA. If they can prove the revenue is sustainable in Tuesday's earnings, those price targets might actually be conservative.