Review & Preview: Tech Check

Nov 04, 2025 18:06:00 -0500 by Connor Smith | #Markets #Review & Preview

AI Uh-Oh. The artificial intelligence rally hit a rare roadblock today after a handful of negative headlines put Wall Street in risk-off mode.

The Nasdaq Composite slid 2%, while the S&P 500 dropped 1.2%. The Dow Jones Industrial Average fell 251 points, or 0.5%.

The Nasdaq and S&P 500 marked their biggest daily drops since Oct. 10. It was just the third time since the start of August that the S&P 500 closed down 1% or more in a day.

There wasn’t one particular catalyst driving the slide. Palantir Technologies delivered earnings that CEO Alex Karp described as “the best results that any software company has ever delivered” and the stock fell 8%. Palantir had just finished Monday’s session at a record, and the profit-taking in that stock may have spread to other AI names.

Then there was a report from Bloomberg, which called out worries about highflying valuations from Wall Street executives including Morgan Stanley CEO Ted Pick and Goldman Sachs CEO David Solomon.

“Essentially the rest of the stock market has been going down for over a week now and the only thing that’s been holding the S&P 500 up are the AI names,” Sevens Report Research’s Tom Essaye told me. “And now we have a very direct series of headlines of caution…on the increases in the AI-related stock prices.”

Still, this might simply be “knee-jerk selling,” according to Essaye.

“I don’t think that this is the start of something much bigger,” Essaye says. “The market seems absolutely fine, still embracing a lot of these AI-related headlines, but I do think that we’re going to get these temporary moments of caution because the whole debate ‘Is AI a bubble or not?’ it’s still incredibly unsettled.”

Whatever the reason, risk assets were hit hard. Beyond the AI world, cryptos, meme stocks, and even cruise lines fell sharply. Bond yields also dropped as traders bought Treasury notes.

The major indexes still aren’t far off their highs. As Mizuho’s Daniel O’Regan puts it: “Stocks are allowed to go down.”

“After seven consecutive months of gains—the longest stretch in eight years—a pullback may simply reflect natural market rotation or profit-taking,” O’Regan writes.

Company

Last

Chg

Chg%

Dow Jones Industrial Average

47,085.24

-251.44

-0.53%

S&P 500 Index

6,771.55

-80.42

-1.17%

NASDAQ Composite Index

23,348.64

-486.09

-2.04%

Market Data as of

The Hot Stock: Expeditors International of Washington +10.9%
The Biggest Loser: Norwegian Cruise Line Holdings -15.2%

Best Sector: Financials +0.5%
Worst Sector: Technology -2.7%

Created with Highcharts 9.0.1Tuesday, Nov. 4Index performanceSource: FactSetAs of Nov. 5, 3:10 p.m. ET

Created with Highcharts 9.0.1Nov. 5-0.50-0.2500.250.500.751.001.251.50%Nasdaq CompositeS&P 500Dow industrials

Not-So-Super Micro

Anyone hoping tonight’s results from Super Micro Computer and Advanced Micro Devices could reignite the AI rally may be left disappointed.

Super Micro shares were down 9% in after-hours trading, while AMD stock was down 3.3% at last check. My Barron’s colleague Tae Kim covered both reports. For Super Micro, earnings of 35 cents a share and revenue of $5 billion were both below analyst expectations. But the real problem was the outlook. Tae writes:

The fiscal first-quarter results weren’t much of a surprise. Super Micro had already given a $5 billion preliminary revenue number when the AI server maker negatively pre-announced last month.

The company’s earnings outlook, however, was mixed. Super Micro said revenue for the current quarter would be in a range of $10 billion to $11 billion, versus the $7.94 billion average analyst estimate. The company’s EPS outlook for the current quarter was below expectations at a range of 46 cents to 54 cents versus the 61-cent estimate.

It wasn’t all bad news:

There was some positive news in the release. Super Micro CEO Charles Liang said the company now expects revenue of at least $36 billion for fiscal year 2026, which is above the prior $33 billion outlook and the current consensus of $32.25 billion.

But investors will likely want to know how earnings will come in for the full fiscal year, too. No EPS guidance was given for that time period.

AMD actually topped earnings expectations and provided a revenue outlook above the Wall Street consensus. Tae adds:

On the earnings call with analysts, Su said many customers are planning “substantially” larger CPU buildouts in the next few quarters to support higher AI demand. She also said AMD’s AI business is on track to grow to tens of billions of dollars in annual revenue by 2027.

AMD shares, which initially rose on the earnings news, were down 2.8% in after-hours trading.

You can read Tae’s Super Micro earnings coverage here and his AMD coverage here.

The Calendar

Albemarle, Allstate, APA, AppLovin, Arm Holdings, Atmos Energy, Bio-Techne, Bunge Global, Cameco, Cencora, CF Industries, Charles River Laboratories International, CRH, Devon Energy, DoorDash, Emerson Electric, Energy Transfer, Fair Isaac, Fidelity National Information Services, Fortinet, Humana, Iron Mountain, Johnson Controls International, McDonald’s, McKesson, MetLife, Paycom Software, PPL, PTC, Qualcomm, Robinhood Markets, Sempra, Steris, Targa Resources, Texas Pacific Land, TKO Group Holdings, Toyota Motor, Trimble, and Zimmer Biomet Holdings report quarterly results tomorrow.

ADP releases its National Employment for October. The Institute for Supply Management releases its Services Purchasing Managers’ Index for October.

The Supreme Court hears oral arguments for two cases in which small businesses sued the Trump administration, alleging illegal use of the International Emergency Economic Powers Act to implement tariffs.

What We’re Reading Today

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