The selloff in tech stocks soured, with NVIDIA (NVDA.US) technically entering a bear market overnight (5th). NVIDIA closed down 9.3%. According to Dow Jones Market Data, the stock has nosedived 25.3% from its closing peak on October 6. A bear market is defined as a decline of 20% or more from a recent high.

According to Dow Jones Market Data, NVIDIA's market cap was estimated to have shrunk by USD415 billion on Thursday, marking the second-largest single-day market value loss in history. The company's market cap has erased USD1.4 trillion since its peak one month ago.

Michael Monaghan, portfolio manager at Founder ETFs, told MarketWatch that investors are reassessing the reality of economic growth driven by AI infrastructure buildout. Following the midterm elections, investors are concerned that Democrats may impose more obstacles to data center expansion.

He added that the fundamental drivers behind AI spending and demand remain intact, and that when price action diverges from fundamentals, it often creates very attractive positioning opportunities.
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Apple Inc. (AAPL.US) issued high-grade bonds and raised USD7.5 billion, Bloomberg, citing sources, reported. Despite heavy selloffs in the stock market, the offering still attracted solid demand, with subscriptions reaching about USD31 billion, representing oversubscription of more than three times.

Proceeds from the bond issuance will be used for general corporate purposes, including share repurchase programs, sources divulged.
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Alphabet Inc. (GOOGL.US) is continuing to advance major AI infrastructure investments despite mounting political resistance related to data center expansion following the US midterm elections, announcing plans to invest USD17 billion to build a data center in Wyoming.

Alphabet shares overnight (5th) closed down 2.2% at USD282.57.
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Major US media outlets confirmed Democratic victories in both chambers of Congress, BofA Securities mentioned in a research report. The broker foresaw a Democrat-controlled Congress to strengthen hearings and oversight over multiple federal policies. However, given the president's veto power, legislative changes over the next two years are expected to be limited, though there could be substantial impacts on data center construction and social media regulation.

Given the unprecedented scale of planned capex by major technology companies, regulation of data centers could become a post-election policy focus, the broker said. New federal regulations were expected to face presidential vetoes, but Democratic victories in key data center states such as Texas could limit the pace of future expansion.

The broker viewed that while capacity expansion plans may continue over the next 12 months and hyperscale data centers could shift to states with higher acceptance levels, the market may view rising construction costs and constraints on future expansion as risks to artificial intelligence innovation and industry revenue.
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Following the US Democratic Party's sweeping victory in the midterm elections, AI data centers are facing policy uncertainty, China Merchants Securities International said in a research report. The broker maintained its recommended rating on the internet sector.

The Democrats regained control of the House of Representatives and are likely to control the Senate, the report mentioned. Governorships in key AI data center growth states including Texas, Georgia and Ohio also shifted from Republicans to Democrats, exposing the industry to risks of stricter federal scrutiny and tighter state-level approvals. Congress could use hearings, investigations and legislation to require large power-consuming projects to bear higher grid and environmental costs.

However, presidential veto power and bipartisan consensus on AI national competitiveness are predicted to constrain any comprehensive halt to construction projects. Near-term risks are more concentrated at the state and local levels, including slower approvals, rising grid connection costs and stricter disclosure requirements. Policy changes in core growth markets may affect project delivery faster than federal legislation.

The broker maintained Overweight ratings on Meta Platforms, Inc. (META.US), Alphabet Inc. (GOOGL.US), Amazon.com, Inc. (AMZN.US) and Microsoft Corporation (MSFT.US), with TP at USD830, USD460, USD326 and USD640 respectively. AI giants are simultaneously accelerating external financing, while surging capital expenditures have pushed overall free cash flow into negative territory. If tighter approvals and higher grid infrastructure costs delay some projects, capex deployment and financing pressure may ease simultaneously, alleviating market concerns over uncontrolled capital spending.

Meanwhile, Elon Musk's close ties with the Republican Party may expose Tesla, Inc. (TSLA.US) and SpaceX (Underweight, TP: USD118) to greater congressional scrutiny pressure. According to media reports, Musk contributed nearly USD500 million to Republican candidates and political groups during the midterm elections.
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Apple Inc. (AAPL.US) is lowering budgets for employees' use of AI as part of its cost-cutting measures, Bloomberg, citing sources, reported.

Last month, Apple reduced the daily spending cap for some engineers using AI models from USD300 to USD200. The company is now planning further budget cuts for certain engineering teams, potentially lowering the daily budget to USD100.

Many teams outside Apple's engineering division already have a daily cap of USD100, but Apple has considered lowering the cap for some teams further to as low as USD25, sources divulged. Employees requiring higher budgets may apply for exemptions.

Apple is not the only company attempting to control AI spending. Microsoft Corporation (MSFT.US) has also tightened budgets for internal AI spending, while Tesla, Inc. (TSLA.US) has set a weekly AI spending cap of USD200 for employees. Meta Platforms, Inc. (META.US) has introduced a token budget program and encouraged employees to switch to internally developed AI tools.
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Based on weekly NEV order data, China's NEV market continued to recover in Week 43 (Oct 26 to Nov 1), with total orders growing 48% WoW to 207,000 units, Daiwa said in a research report. Order momentum improved for most major automakers, with 8 of the 10 tracked brands recording WoW growth.

At the brand level, LI AUTO-W (02015.HK) and XPENG-W (09868.HK) skyrocketed 840% and 240% WoW respectively, starkly outperforming the broader market, the broker noted. XIAOMI-W (01810.HK) (up 28% WoW), GEELY AUTO (00175.HK)'s Zeekr (up 17% WoW), Tesla, Inc. (TSLA.US) (up 14% WoW) and NIO-SW (09866.HK) (up 12% WoW) also maintained positive growth.

Standing in contrast, GEELY AUTO's Galaxy was the only brand to record a WoW downswing (down 3% WoW), while BYD COMPANY (01211.HK) was flat WoW. Looking ahead, upcoming new model launches and year-end promotional campaigns may further support demand, although competitive pressure remains intense and brand performance divergence is expected to last.
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Chinese AI developers are expected to receive only a small portion of the advanced NVIDIA (NVDA.US) chips they have ordered over the coming months, Bloomberg, citing sources, reported.

BABA-W (09988.HK), TENCENT (00700.HK), ByteDance and other Chinese AI and cloud companies have collectively ordered about 6 million Nvidia RTX Pro 5500 chips, but these companies are assumed to receive only tens of thousands of units over the next four months, or about 1%.

Although the US has prohibited Nvidia from selling its most advanced chips to China, the RTX Pro 5500 is not subject to restrictions. Sources said that the total value of orders so far is about USD70 billion based on a unit price of more than USD11,000 per chip.

Major Chinese AI developers forecast the first batch of several thousand RTX Pro 5500 chips to be delivered before the end of 2026, followed by another batch of tens of thousands around February 2027.

As Nvidia is predicted to expand production capacity, Chinese hyperscale cloud computing providers estimate they may receive about 700,000 RTX Pro 5500 chips by the end of 2027, sources divulged. However, Nvidia warned customers that capacity will remain limited for the foreseeable future due to product scheduling conflicts.

The company allocated more manufacturing capacity to next-generation products such as Rubin, and supply of the RTX Pro 5500 is expected to remain constrained.
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State Street Corporation (STT.US) Chairman and CEO Ron O’Hanley said it is hard to see AI as a bubble, as market demand is supporting substantial investment in AI technology.

He said the construction of new data centers is not being carried out speculatively, but is backed by real orders. Whether a bubble emerges will depend on whether AI becomes more efficient, making all the capacity currently under construction redundant.

Following the earnings release by Alphabet Inc. (GOOGL.US), some market selling may have already been inevitable. O’Hanley said some selling in the market may have been overdue, but at present the market does not appear to be experiencing disorderly conditions.
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PIMCO CEO Emmanuel Roman said at the Fifth Global Financial Leaders' Investment Summit this morning (3rd) that AI-related financing could elevate to around USD10 trillion over the next five years and eventually reach overheated levels, compared with the approximately USD12 trillion size of the US bond market.

He said downside risks could emerge from rising US interest rates, war in the Middle East and a eurozone crisis, and the problem of excessive financing may then surface.

Blackstone Inc. (BX.US) President Jon Gray said at the same occasion that the current skepticism may be healthy, but stressed that the broader momentum of AI development indicates related investment will continue to increase, while demand for capital will also grow substantially.

He believed it would be a mistake to underestimate the upcoming productivity gains, as well as changes in consumer and corporate behavior.
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