Good morning, investors. We just saw one of the most volatile weeks in the stock market all year and not even Nvidia’s blowout earnings could prevent the dip.
Still, the S&P 500 remains within 4% from its record high, and none of the investors I’ve interviewed recently on Full Signal seem the least bit concerned heading into the new year.
The dominant AI player
Over the last year, many technologists wrote off Google in the AI race, elevating names like OpenAI and Microsoft as the potential winners.
Stock market investors, however, have been positioning for a different outcome.
That’s emerged explicitly in recent days as Google unveiled its latest AI model, Gemini 3, which beat ChatGPT and other competing tools, according to industry benchmark tests.
Google made a particular splash with its updated AI image generator, Nano Banana.
I tested it out too with an AI-generated selfie of me with Elon Musk.
Made on Google’s newest version of Gemini
Novelty aside, Wall Street seems to believe that Alphabet has seized the momentum against its Magnificent 7 peers and other AI names.
The last 12 months show a clean, decisive divergence.
While the Big Tech stocks have traded as a group through most of this summer, shares of Alphabet broke out from the pack in September.
Its nearly 82% return in that period dwarfs even Nvidia’s 27% gain.
In the past month alone, which has been particularly bruising for technology stocks, Alphabet has outperformed by a wide margin.
It’s up by roughly the same amount that Meta has lost since October 23.
Meanwhile, Nvidia, Microsoft, and Tesla are all negative over 30 days.
Alphabet, with its $3.62 trillion market cap, seems to be executing better than ever at a moment when the market is rethinking the broader AI trade.
Concerns of over-subsidized compute, circular financing, and top-heavy customer bases have led many investors to question which companies are able to monetize technology today versus during some unspecified future date.
The Google parent, as it turns out, provides a satisfactory answer to both timelines.
It can already distribute AI products and capabilities through its network of ads and search, as well as beloved products like YouTube and Google Docs.
None of that, in the eyes of the market, requires speculative economics.
New players like OpenAI and Anthropic, while impressive in their own right and despite enormous user growth, still have to stamp out their cost structures and business models.
Plus, it’s not nothing that Berkshire Hathaway this quarter took a stake in Alphabet above all other potential AI players.
Put another way, if we look at Alphabet’s stock performance against its peers, Wall Street seems to believe Alphabet is winning the AI race in this moment and in the future.
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Market snapshot
Elsewhere
📈 Odds are rising for a December Fed rate cut. After dipping last week, markets raised their bets as New York Fed President John Williams signaled he would support a lower benchmark policy rate. Odds for a quarter-point cut hover near 70%. (Barron’s)
👀 Treasury Secretary Scott Bessent said healthcare news is coming. He said the White House is working to bring down costs for everyday Americans and that an announcement is imminent: “We believe health care’s going to come down.” (Bloomberg)
Rapid-fire
Moderna is now the most shorted stock in the S&P 500 (FT)
White House economic adviser Kevin Hassett warned against underestimating President Trump’s call for $2,000 tariff dividends (Barron’s)
Secret US-Russia talks led to a new deal and plan that blindsided Ukraine (Bloomberg)
Stock investors are positioning for a turbulent year-end as rate cut uncertainty and AI enthusiasm collide (Reuters)
This legacy tech name has quietly become a key player for AI servers (Best Ideas Club)
The shifting Fed outlook squashed the enthusiasm from Nvidia’s big earnings (Opening Bell Daily)
There is blood on the streets across the stock market (Pomp Letter)
On this day
🗓November 24, 2008: Citigroup received a landmark bailout at the height of the financial crisis. The US government agreed to inject an additional $20 billion into the bank and back roughly $306 billion of its troubled assets.
Last thing
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About me
📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.
I write our flagship newsletter and host our show, Full Signal, to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.
Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at [email protected].