AI Momentum Wavers as Valuations Peak and Power Shifts

The first Tuesday of November opened with hesitation, not hunger.

After weeks of relentless gains, futures turned lower: Dow down nearly 300 points, S&P off 1%, and the Nasdaq sliding 1.3% as traders stepped back from AI’s fever pitch. Palantir’s post-earnings stumble led the retreat.

Despite beating expectations and hiking guidance, its 700x forward P/E was the headline that mattered. Nvidia, AMD, and Amazon followed lower, pulling the entire complex into correction mode.

The tremor wasn’t confined to tech. Global markets softened as yield and valuation anxiety returned, with Europe’s Stoxx 600 off nearly 1% and Asia’s Nikkei down 1.7%.

Fed Governor Lisa Cook’s reminder that December remains a “live” meeting tempered rate-cut optimism, while CEOs at Goldman Sachs and Morgan Stanley warned of potential 10–20% drawdowns ahead.

Underneath the volatility, the stories shaping sentiment are diverging fast. Michael Burry’s short bets on Nvidia and Palantir cast a contrarian shadow over AI euphoria.

Big Tech’s shadow financing, from Meta’s $30B SPV to xAI’s chip leasing plans, revived questions about leverage and transparency. Norway’s $2T wealth fund’s rejection of Musk’s $1T Tesla package signaled institutional pushback against governance excess.

Meanwhile, Rick Perry’s Fermi is chasing the AI power boom with natural gas now and nuclear later... proof that the energy arms race is only accelerating, even as the market hesitates.

Investor Signal

Markets are shifting from momentum to scrutiny. The rally’s leadership: AI, hyperscalers, and infrastructure, is facing its first valuation test in months. 

Watch for stabilization in chip pricing and AI demand before calling any pullback finished. Energy remains the quiet hedge as data-center power demand reshapes utilities and fuels. 

For now, patience is the trade... let prices breathe before conviction returns.

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Palantir beat on both earnings and revenue and raised fourth-quarter guidance, proving once again that AI adoption isn’t cooling, it’s accelerating. 

The company posted adjusted earnings of $0.21 per share on $1.18 billion in revenue, both well above analyst expectations. Shares popped after hours before slipping about 4% as traders digested just how far ahead the company has run this year, up more than 170% year-to-date.

Government contracts remain the anchor, but the real surprise came from the private sector, where new partnerships with Snowflake, Lumen, and Nvidia underscored Palantir’s reach beyond defense. 

CEO Alex Karp struck his usual defiant tone, saying the company’s growth has left “detractors in a kind of befuddlement,” while warning that only the strongest AI firms will survive the next phase of consolidation.

Deeper Read: When AI Matures, Power Shifts from Promise to Proof

Palantir’s results mark a turning point in the AI cycle, the phase where adoption becomes operational and no longer aspirational. 

Its growth shows that the market for enterprise AI is no longer about experimentation but integration: defense, infrastructure, and healthcare clients are embedding Palantir’s systems directly into their workflows.

What makes this moment different is the manner in which Palantir has bridged the gap between AI software and real-world decision-making. 

Its platform isn’t built to generate novelty; it’s built to manage consequence. That edge now separates durable AI firms from the noise of model chasers and hype vendors.

Investor Signal

Palantir is turning scale into staying power. Guidance strength and cross-sector adoption show its AI story has moved past hype into habit. 

Keep an eye on margins and contract mix, proof that its momentum is becoming structured.

Michael Burry, the contrarian behind The Big Short, is once again stepping into a contrarian trade, this time, on the other side of AI mania. 

A fresh 13F filing shows Burry’s Scion Asset Management has taken massive put positions against Nvidia and Palantir, together representing nearly 80% of his portfolio’s value. 

The trades suggest Burry believes the AI boom has stretched valuations beyond reason and that the sector’s self-reinforcing cycle of hype and capital spending is nearing exhaustion.

His timing, characteristically, cuts against the grain. Both companies hit record highs Monday, with Palantir up over 300% in the past year and Nvidia continuing to power every AI headline. Yet Burry’s short bet lands right as optimism peaks, just after Palantir’s strong earnings, 

Amazon’s $38B OpenAI deal, and Microsoft’s $9.7B data center pact reignited tech sentiment. While analysts have warned of frothy multiples, few have gone as far as Burry in quantifying that skepticism.

The move also exposes a philosophical split in the market. One camp sees AI as a new industrial revolution with years of runway; the other sees a credit-fueled echo of past bubbles. Burry’s position, massive, leveraged, and long-dated, suggests he expects gravity to reassert itself eventually, even if the timing tests his patience again.

Deeper Read: When Vision Becomes a Variable

Burry’s shorts aren’t just about price, they’re about pace. The AI trade has grown reflexive, where stock valuations drive capital expenditure, which in turn justifies higher valuations. That circular motion can last for quarters, but not forever. 

His bet implies that the market’s belief in limitless demand for compute may be outrunning both infrastructure and balance sheets. 

If history rhymes, he’s wagering that euphoria will fade not because AI fails, but because expectations become mathematically impossible to sustain.

Investor Signal

The “AI everything” trade is maturing into a phase defined by selectivity and risk compression. Burry’s contrarian shot underscores a wider truth: even real revolutions overshoot. 

Investors should track cash flow growth versus capex intensity across AI leaders, when those lines diverge, momentum turns fragile. 

For now, the lesson isn’t to short AI but to separate durable demand from reflexive enthusiasm and size exposure accordingly.

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The AI gold rush is bringing back one of Wall Street’s most infamous tools, and the timing isn’t lost on anyone. 

As Microsoft, Amazon, Google, and Oracle collectively prepare to pour more than $500 billion into AI data centers next year, analysts warn the math is starting to strain. Bank of America data shows hyperscalers are burning nearly all of their free cash on capital spending, forcing companies to look for creative ways to fund expansion without bruising their balance sheets.

That’s where the special purpose vehicle reenters the story. Meta’s $30 billion Louisiana data center will be financed through an SPV called Beignet Investor LLC, a structure that keeps the debt technically off the books while still tethered to the parent’s credit health. 

Elon Musk’s xAI is reportedly exploring a similar setup for a $20 billion chip-financing vehicle that will buy and lease Nvidia processors back to his startup. The resemblance to pre-2008 off-balance-sheet debt isn’t perfect, but it’s close enough to make regulators and investors glance twice.

For now, markets are giving Big Tech the benefit of the doubt. Their credit profiles remain stellar, demand for their debt remains voracious, and the race for AI compute shows no sign of cooling. 

But the shift toward shadow financing marks a subtle but important turn in the cycle, from exuberant funding to engineered liquidity. 

When capital becomes complex, transparency usually thins.

Deeper Read: The Infrastructure Boom Finds Its Leverage Point

This round of AI expansion mirrors the energy buildout of the early 2000s: massive, debt-fueled, and justified by a belief in infinite demand. 

The use of SPVs signals that balance sheets are hitting natural limits, even for trillion-dollar firms. Investors are now lending not to companies, but to their ambitions. 

The risk is opacity: when capital is buried in vehicles few can track, it becomes harder to know who’s holding the weight when sentiment shifts.

Investor Signal

The AI capex cycle is entering its leverage phase. While hyperscalers can still absorb it, the introduction of structured financing raises the stakes. 

Track debt transparency as closely as demand growth. If SPVs proliferate faster than earnings expand, the story shifts from innovation to imbalance. 

For investors, the playbook is simple: own the suppliers of compute, not the borrowers of it.

Elon Musk’s latest pay package has drawn fire from one of the world’s most powerful investors. 

Norway’s Norges Bank Investment Management, the $2 trillion sovereign wealth fund that owns 1.14% of Tesla, confirmed it has voted against the proposed $1 trillion CEO compensation plan, citing “concerns about the total size of the award, dilution, and key person risk.” 

The move pits one of the world’s largest long-term investors against one of its most polarizing executives.

Tesla’s board is asking shareholders to approve the record-breaking plan, which would grant Musk vast stock awards over the next decade if Tesla meets a set of operational and valuation milestones. 

Supporters, including Baron Capital, argue the structure ties rewards to shareholder value and ensures Musk stays at the helm of his most profitable company. 

Critics, from proxy advisors ISS and Glass Lewis to the Take Back Tesla coalition, say the package centralizes power, deepens governance risk, and turns Tesla into a one-man economy.

The stakes extend far beyond one vote. Musk has openly threatened to scale back his involvement if the deal fails, a warning that tests both investor loyalty and Tesla’s valuation premium. 

With the vote due later this week, the confrontation captures the tension between vision and control that has defined Tesla since its rise, and could shape its future leadership arc.

Deeper Read: The Price of Vision

Norway’s rejection is less about money than governance. 

Musk’s leadership has created immense value, but also concentration risk: Tesla’s identity, market cap, and innovation pipeline orbit one individual. The trillion-dollar plan crystallizes that dynamic, rewarding Musk for staying put. 

For a fund built on sustainable, transparent capital, the optics of such a package cut against its principles. 

The deeper question isn’t whether Musk deserves it, but whether Tesla can afford to need him this much.

Investor Signal

This vote marks a rare showdown between institutional stewardship and cult equity momentum. If shareholders approve, Tesla’s near-term stability may rise, but so will dependency risk and potential dilution. 

If it fails, expect volatility and renewed debate over Musk’s next move, both within Tesla and across his broader empire. 

For investors, the takeaway is discipline: own Tesla for execution, and watch whether the board can prove governance still matters when the stock trades on personality.

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Fermi went public with a $17 billion plan to anchor the AI power race from Amarillo, Texas. The blueprint is audacious: an 11-gigawatt campus serving data centers and, in time, four Westinghouse AP1000 reactors.

The ambition is nuclear, the timeline is not. Management says the first juice comes from natural gas, with 350 megawatts targeted by April 1 and roughly 1 gigawatt by year-end, backed by orders for about 2.5 gigawatts of gas equipment.

The pitch is simple.

Hyperscalers want power immediately and do not trust congested grids. Fermi offers land, interconnects, fiber, and a plan to self-supply while the nuclear docket moves through the NRC.

The site sits by DOE’s Pantex facility, which brings infrastructure and an energy-savvy workforce, along with heightened scrutiny.

Reality still bites. U.S. nuclear builds have stumbled on cost and schedule.

Fermi’s reactor license will face questions on site geology and cooling water in the Texas Panhandle. Until steel rises on a containment dome, this story trades on gas turbines, transformers, and contracts.

Deeper Read

Fermi is the clearest expression of “bring your own power” in the AI era.

The near-term cash flow path runs through gas peakers and combined-cycle blocks that can be commissioned on data-center timelines. 

The long-dated upside is a nuclear stack that hardens margins and brand value if it clears licensing, water, and procurement risks.

Co-location next to Pantex signals serious intent but also invites a heavier regulatory lift. 

If the NRC accepts the site case and Westinghouse supply chains hold, Fermi could become a template for hybrid campuses that bridge to baseload nuclear in the 2030s.

Investor Signal

Treat Fermi like a staged option on AI power scarcity. The 2026 scorecard is gas capacity delivered, interconnection progress, and signed offtakes with credible anchors. The medium-term aims are NRC docket milestones, cooling design acceptance, and EPC mobilization.

Execution risk is high and dilution is a live possibility, yet the prize is meaningful if megawatts arrive on schedule and nuclear converts from plan to project.

Upstream beneficiaries include turbine OEMs, balance-of-plant suppliers, and EPCs tied to fast power. The nuclear kicker is real, but the gas bridge needs to carry the weight first.

Doubt finally crept into the trade that’s been running on faith. The AI complex, once untouchable, is showing its first real stress fractures. Palantir’s slip, Burry’s bets, and Big Tech’s shadow leverage each expose the same theme: expansion at the edge of sustainability.

Even as energy names like Fermi and infrastructure players chase the next wave of demand, the market’s rhythm has shifted from acceleration to calibration. Momentum isn’t gone, but it’s being measured.

Conviction now lives in the gray,  between growth and gravity, between hype and habit. Investors are learning that the new economy runs on credibility. As the week unfolds, the tone will hinge on whether this is a breather or a break.

For now, the market feels less like a melt-up and more like a system test… one that will decide which stories have power, and which are running on borrowed charge.