To The Moon

$Nasdaq 100 Index (NDX)$ dropped sharply, marking its steepest pullback since Liberation Day. The market was filled with wails as investors questioned whether the AI rally was ending. Key themes for the second week of earnings season: confidence, crowding, and gear shifts.

The Nasdaq 100 fell 300 points this week, marking a weekly decline of about 1.6% and its steepest correction since Liberation Day. But the problem isn't just the drop—it's the lack of resilience. Macro instability: Weak employment data, softening low-end consumption, and lingering government shutdown concerns. Micro squeezes: AI sector positions are fully loaded, valuations are stretched, and funding leverage structures are overly concentrated. Simply put, it's a perfect storm.

Over the past two weeks, rumors about OpenAI have been circulating in the market:

• Funding Rumors: Reports indicate OpenAI's next funding round may be discounted by 10-15%, with some investors already requesting to delay their participation.

• Concerns Over Revolving Financing: $Microsoft (MSFT)$'s cash recycling structure has been subject to heightened scrutiny;

• Supply Chain Risks: $Oracle (ORCL)$'s cloud business CDS surged to a near six-month high as questions arose about the stability of its AI infrastructure;

• Altman's "Funding Remarks": During a public interview in San Francisco, he mentioned that "the AI industry may require public sector involvement in financing," which the market interpreted as "tightening capital chains."

Then OpenAI CEO Sarah Frair's remarks—essentially asking for money—instantly ignited market panic.

This lady really spoke at the wrong time. The market was already worried about your cash burn becoming unsustainable (like Oracle's CDS risk), and she just poured fuel on the fire. As VitalKnowledge put it, the harder you try to spin it, the more the market thinks you're hiding something.

However, while everyone loves watching the drama in the AI world, the most crucial factor remains the orders and growth in AI infrastructure. As the saying goes, you can't sustain valuations with empty talk alone; it's the companies selling shovels, electricity, and storage that are truly reaping the benefits of computing power growth.

The End of AI Trading? See Who's Naked and Who's Celebrating

At Friday's close, the $Nasdaq 100 ETF (QQQ)$ precisely hit the 50-day moving average and formed a strong hammer candlestick pattern—very robust. The threat of a government shutdown was also temporarily averted over the weekend.

There are several positive signs:

• BTC closed higher, stabilizing at a "higher low."

• The CBOE P/C Ratio (put/call ratio) has reached 1.08. Looking back over the year, whenever this metric hits 1.0, it has essentially served as a signal flare for "short-term tradable lows."

• Historical data indicates that we are entering the seasonally strongest period of the year.

Many investors believe the panic has already run its course, and a short-term recovery is now in the making. The current pattern resembles a calibration before a rally rather than a crash.

AI isn't dead; it just needs to breathe.

Most notably, despite the AI sector facing pessimistic sentiment in public discourse, structural data indicates capital is shifting "from concepts to fundamentals." This represents a sector rotation.

Storage Sector Orders Booked Through 2027

$Western Digital (WDC)$ and $Seagate Technology (STX)$ are on a roll. Western Digital (WDC) continued its upward momentum post-earnings, hitting an all-time high (ATH) without any pullback this week. Management openly denied plans to expand capacity—why? Because orders are exploding! Purchase orders (POs) from its top seven clients are already booked through the first half of 2026, with five extending through all of 2026. One major hyperscale data center (H) has locked in orders through all of 2027. SanDisk (SNDK): This one's even more extraordinary, surging 350% since early September. Friday's earnings blew up, NAND flash prices skyrocketed (rumored to have jumped 50% recently), and bulls are already calling for next year's EPS to hit $25. The CEO stated: "We're revising our 2026 demand forecasts upward every two to three weeks... Three months ago we projected 20% growth; now we're looking at the mid-40% range."

Electricity and TPU are the core of infrastructure. $Bloom Energy Corp (BE)$ Its stock price is so strong it can't even break the 10-day moving average (10d). This week's Edison Electric Institute (EEI) conference has the market awaiting AEP's (American Electric Power) announcement of new megawatt (MW) capacity additions during its earnings call. Could Oracle's (ORCL) warrant allocation hint at deeper collaboration? This is my top pick for positioning in the "power bottleneck" sector. $Lumentum Holdings Inc.(LITE)$ The logic is simple: three words—TPU, TPU, and TPU.

The semiconductor foundry and TPU sectors delivered the strongest performance, with $Super Micro Computer (SMCI)$ gaining 7.4% over the week and $TSMC (TSM)$ rising 3.9%. $Broadcom (AVGO)$ gained 2.5%;

Which Internet Giant is the True AI Player?

Leading Stock $Amazon (AMZN)$ has precisely retested support at the 50-day moving average. AWS growth is accelerating, and the retail segment's operating margin logic has been fully validated. In my view, AMZN stands out among large-cap stocks as having the greatest potential for sentiment reversal and the strongest upside valuation potential. All the pieces for AI are now in place.

$Google A (GOOGL)$ $Google (GOOG)$ has shown remarkably strong performance recently, holding above its 10-day moving average. Third-party search data has shown consistent improvement over the past two weeks. GCP (Google Cloud) is poised for 40% growth next quarter (Morgan Stanley's Nowak even projects 50% by 2026). What's Google's trump card? Its TPU chips. This grants it a structural IT performance advantage—while others queue for NVIDIA GPUs, Google has its own chips, controlling both cost and performance. This is full-stack AI capability! Valuation is indeed expensive now. Based on a 2026 EPS of $12, a 25x PE implies a $300 target price. But you can't ignore the fact that GCP could become the fastest-growing cloud platform by 2026.

Infrastructure software is a winner-takes-all game. $Datadog(DDOG)$ surged 25% in a single week as management addressed two major investor concerns: 1) Non-AI customer revenue is returning; 2) The partnership with OpenAI (worth hundreds of millions) has been renewed. With uncertainty resolved, the market immediately positioned it as a "clear AI winner." In the observability space, it stands as a core beneficiary. $MongoDB Inc.(MDB)$ demonstrated robust momentum, holding onto its highs. Its Atlas cloud database is poised for renewed acceleration. Currently trading at a lower valuation than SNOW/DDOG (15x P/E), it offers upside potential for catch-up gains.

Is having a story and growth enough?

Last week, the market also taught growth investors a lesson: valuations matter again. $Palantir Technologies Inc.(PLTR)$ Revenue beat expectations by 9%, with growth accelerating from 48% to 63%—arguably its strongest performance since going public. Yet the stock retreated nearly 20%. Shopify (SHOP) saw GMV growth pick up again, but its stock pulled back 15%.

The key is still valuation! Valuation! Valuation! The era of ignoring valuation and chasing revenue acceleration alone may be over for now. The market no longer rewards companies that focus solely on revenue growth while disregarding operating expenses (OPEX). $Roblox Corporation(RBLX)$、$eBay(EBAY)$、$DoorDash, Inc.(DASH)$、 $Meta Platforms, Inc.(META)$ ) are still falling after being punished for rising OPEX.

Additionally, consumer spending has once again faced a chill, particularly as demand from low-end consumer groups remains persistently weak. $Carmel Market Group (CMG)$ noted, "At the beginning of this year... consumption frequency declined across all income groups. Since then, consumption frequency among middle- and low-income customers has fallen further." Newell Brands: "Low-income consumers remain under significant pressure... with purchase volumes significantly lower than last year." $Pizza Hut (PZZA)$ Apollo Global Management isn't even daring to pursue privatization anymore. Why? Consumer spending is just too weak. $JetBlue Airways (JBLU)$ "They'll take one vacation during Thanksgiving and Christmas, but won't plan a second one."

Seasonal Window: A Breathing Space Before Capital Shifts Gears

From mid-October to year-end has consistently been the "golden period" for U.S. stocks. Over the past 20 years, the S&P 500 has posted positive returns in the fourth quarter for 15 times, with an average gain of 6.2%. This trend aligns with the current portfolio structure following the recent market correction: hedge fund net long positions have retreated to March levels; U.S. stock ETFs saw renewed inflows last week, primarily concentrated in QQQ and SOXX; the probability of the Fed raising interest rates this year has dropped to 14%; and the U.S. Dollar Index has declined for the third consecutive week.

The market is entering a "reflexive cycle":

Sentiment trough → Technical support → Fund buying → Seasonal uptrend.

So, the "HOT AI Summer Fall" has passed, and we are now entering the "WARM AI Winter."

What should I do now?

1. Focus on high-quality, robustly performing targets with clear investment logic.

2. NVIDIA (NVDA), TSMC (TSM), Broadcom (AVGO) — these are still solid bets. Add to positions at reasonable prices.

3. Steer clear of stocks with high valuations and no near-term catalysts (such as PLTR, SHOP).

4. Stay away from "Class B leveraged products" (such as RDDT).

5. For assets like META and RBLX, which carry a "high OPEX narrative," they remain short-term financing targets for bears.

In a nutshell: Slow down, be selective, survive, maximize value—there's no greater virtue.