11/13 U.S. stocks firm as Fed’s liquidity supply expectations reflect slump in big tech stocks

The U.S. stock market started higher on the expectation of the spread of the AI industry due to AMD (+9.00% margin rate increase). However, when CEO Lisa Su offered a positive outlook for AI growth but mentioned that capital expenditures should be put behind it, it caused controversy over “monetization” and shifted to a downward trend centered on large tech stocks. In the meantime, the New York Fed’s index reflected the Fed’s liquidity supply expectations when Governor Williams indicated that it would not be long before it started buying assets

*Variables: Circular Profits Vs. Structural Profits Expect Liquidity Supply

CEO Lisa Su of AMD (+9.00 percent) said, “The lack of computing is limiting the spread of the AI industry. To address this issue, we need to make preemptive investments to respond to future demand, and companies with good financial soundness can seize the opportunity.” In the end, he mentioned that the use of AI will trigger productivity improvement, which will be the basis for practical growth. In addition, he criticized Michael Burry’s depreciation issue, claiming that the use cycle of AI infrastructure investment assets has been long for the past four years, but now it can be used for more than five to six years.

Taken together, it can be seen that the spread of the AI industry shows that aggressive spending by large technology stocks should continue. In the end, the AI industry requires huge capital expenditures and produces fairly standardized products, showing that the barriers to entry are low. The cloud computing market is currently in a situation where demand for “computing” exceeds supply, and strong AI chip orders prove this. However, this situation will change someday as large-scale investments in data centers continue, and the market judges the “circular profits” from these investments as “structural profits,” and the stock market continues to rise.

In the end, the key is how this expansion of capital expenditure affects companies’ cash flows and whether monetization is reasonable. Such concerns are at the heart of the recent AI bubble controversy, and when CEO Lisa Su mentioned that increased capital spending will lead to the spread of the AI industry, some in the market have highlighted the “monetization” controversy and large tech stocks are sluggish. In addition, most data center-related companies are also sluggish.

Meanwhile, Treasury Secretary Bessent argued that the U.S. economy was in good shape before the shutdown, but the shutdown would cause temporary problems. At the same time, he raised expectations for liquidity supply, mentioning that he is discussing providing a $2,000 refund to those earning less than $100,000 a year related to tariff dividends. In addition, expectations for a rate cut by the Fed are flowing in amid the economic uncertainty, and stocks other than large tech stocks are solid. In addition, it is also positive that expectations for liquidity supply in the market were highlighted when New York Fed President John Williams and New York Fed employees hinted at buying assets to maintain stability in reserves just before the market closed.

*Featured Stock: Big Tech Stocks Slump Vs. Semiconductor Solid

Semiconductors: AMD Strong Amid Expectations of Improving Margin Rate
AMD (+9.00%) rose sharply as it expressed confidence in its future growth, including raising its margin rate in the future. Meanwhile, CEO Lisa Su argues that a lack of computing is a limiting factor in the spread of AI and that it can be resolved only when companies with financial health make preemptive investments. After all, he mentioned that aggressive capital spending by large technology stocks is the only factor in the spread of AI. Meanwhile, when Antropic announced investment to build a data center worth 50 billion dollars, Broadcom (+0.93 percent) and Micron (+1.57%) showed strong performance while TSMC (-0.19 percent) fell slightly. Nvidia (+0.33 percent) fell due to the opening of profit-taking sales, before turning upward just before the market closed. The Philadelphia Semiconductor Index rose 1.47 percent

Data Center, etc.: Profitability Controversy, Cisco Systems Rising After Hours
Data center-related companies such as Super Microcomputer (-2.34 percent), Datadog (-3.52%), and Cloud Flare (-3.95 percent) fell due to the influx of financial health issues amid controversy over profitability despite increased capital spending. Coreweave (-3.35%) fell as it increased its credit limit from $1.5 billion to $2.5 billion, reflecting concerns over its financial health. Nevis (-7.69%) fell as it announced a public offering of 25 million shares. Cisco Systems (+3.14%) is up 4% after-hours on better-than-expected earnings and guidance after the market closed

Cars: Tesla Slacks On October Sales Slashing Issues
Tesla (-2.05 percent) fell after Wells Fargo reported a 23 percent drop year-on-year in October delivery volume in four major markets. In general, the company estimates that the October delivery volume is due to the expiration of the tax deduction and plunges 54 percent year-on-year compared to September. In addition, competition issues also came in at the news that Google’s Waymo has launched a highway driving service. GM (+0.87 percent) and Ford (+1.13 percent) rose, reflecting falling international oil prices and expectations for automobile sales. In particular, the announcement that the electric vehicle industry will focus more on internal combustion vehicles has a positive impact on the market in the short term. Quantumscape (-7.98 percent) will go on sale, citing recent market trends of overvaluation and anxiety over financial soundness. Lithium-related companies such as Albemarle (+6.20 percent) and SQM (+2.11 percent) are expected to strengthen their raw material stocks.

Big Tech Stocks: Slump Amid Monetization Controversy
MS (+0.48%) announced that it was accelerating AI infrastructure expansion by unveiling AI Super Factory, but it weakened during the day and eventually succeeded in turning upward. Alphabet (-1.48 percent) fell on news that Google faced a lawsuit over its alleged illegal tracking of users’ private information through Gemini. Of course, massive AI investments and subsequent monetization issues are a source of anxiety. Meanwhile, it is positive that Waymo has launched a highway driving service, but its impact is limited. Meta Platforms (-2.88%) was the biggest drop among large tech stocks, as it was the epicenter of the “monetization” controversy after the recent earnings announcement. Amazon (-1.97 percent) also had a controversy over monetization and end-of-year shopping.