The rotation out of Tech continued last week. Now a packed week headlined by Apple on Monday, Tuesday’s midterm elections, and Friday’s jobs report test a market with thin gamma and CTAs near their sell triggers.
Intel’s record drop leads a cascade in chip names with the S&P 500 and Nasdaq seeing their worst session since June, while defensive buying gave the Consumer Staples ETF its best month on record.
The ugly stick found Intel and I’m calling it a strong sell.
A wave of AI-related deals sent semiconductor shares soaring, helping the Nasdaq rally while investors prepared for the Fed and crucial earnings from Microsoft and Google parent Alphabet.
That didn’t take long. When Meta Platforms ($META) unveiled its new non-voting Class C shares alongside earnings last week, I noted that its filing showed management’s long-range plan needing to raise “hundreds of billions of dollars” beginning as early as this fall. The filing also said the company “expects to conduct offerings of Class C common stock from time to time.”
On Monday it got started. Meta is seeking to raise as much as $95 billion by selling common and preferred stock, per Bloomberg. About $35 billion is being offered now, roughly $22.5 billion in Class A common and the rest in mandatory convertible preferred. The remaining roughly $60 billion will come through an at-the-market program in the new Class C shares, which the Financial Times says is expected to begin in the first quarter of 2027.
Nvidia ($NVDA), Advanced Micro Devices ($AMD) and Broadcom ($AVGO), all Meta chip suppliers, have agreed to buy up to $5 billion of the common as cornerstone investors. Morgan Stanley and Goldman Sachs are leading the deal.
If fully executed, Meta’s raise would top Alphabet’s $90 billion June offering, which lead bookrunner JPMorgan called the “largest multi-tranche equity transaction in history,” per the FT. At about $654 a share, the full $95 billion is roughly 5.7% of Meta’s market value.
The timing fits what Meta’s special committee flagged in the filing: it wanted to front-run potential equity offerings from Alphabet ($GOOGL), SpaceX ($SPCX), Anthropic and OpenAI. Alphabet has raised once already, SpaceX completed the biggest-ever IPO in June, and Anthropic is expected to list before year-end, per the FT.
One wrinkle: because the Class C shares won’t exist until January, this first tranche is voting Class A stock. According to Claude, the $22.5 billion of Class A trims CEO Mark Zuckerberg’s voting control voting control only modestly, to about 60.2% from 60.6%, before any conversion of the preferred. The $60 billion ATM goes into the non-voting shares, so it won’t dilute his control at all.
It appears this was priced in by the market with Meta shares little changed as of 8:30 am ET.
At the time of publication, in terms of securities mentioned, Sethi was long META, NVDA, GOOGL, and SPCX and short AMD.
Worries about the sustainability of the AI trade surfaced once again, driving down a swath of related stocks, but other stocks rallied as Treasury yields dropped the most since August 2025, seeing equal-weight vs cap-weight the most extreme since 2024.
One stop remains in our AI series, and it’s the one folks rarely think about.
AI needs more than Nvidia chips. Here are the companies ‘powering’ the AI buildout.
– $IRON +52% (Phase 3 APOLLO trial met all primary and secondary endpoints in erythropoietic protoporphyria)
– $AAME +41% (long-delayed 2025 annual report was filed, showing a return to annual profitability)
– $XLAB +24% (extends rally after securing an $8.2M AI-server order)
– $TCRT +20% (extends volatile rally tied to a proposed acquisition and financing of up to $350M)
– $MEDS +15% (extends rally after outlining peptide-compounding expansion and licensing a direct-to-consumer GLP-1 platform)
– $CLF +11% (Q3 profit and EBITDA beat expectations, Q4 EBITDA was guided higher and 2027 EBITDA is expected to exceed $4B)
– $NBIS +7.5%, $CRWV +7.7%, $BE +5.2%, $SMCI +4.1%, $IREN +5.9% (AI-infrastructure names rebound from last week’s financing-driven selloff as Treasury yields ease)
– $CRDO +4.7%, $TER +5.1%, $LRCX +4.6%, $AMD +3.7%, $MU +3.7%, $AVGO +3.1% (chip names rebound from last week’s AI-led selloff ahead of key sector earnings)
– $INTC +4.3% (JPMorgan upgrades to Neutral from Underweight as confidence in the turnaround improves)
– $VAI +4.0% (agrees to acquire an 18MW Ohio computing center)
– $DDOG +3.9% (Bernstein upgrades to Outperform and sharply raises its price target on stronger AI-consumption trends)
– $ACTU -9.1% (files to sell 40M shares with 20M warrants)
Another selloff in AI names broadened to encompass most of Tech, sending the Nasdaq-100 to its worst week since April 2025. Five sectors though would finish the week up 2% or more, as 30-year Treasury yields fell the most since April 2025.
