Many predicted a market bubble was about to burst -- just not this one. While fears over artificial intelligence spending persist, the focus shifted to the electric-vehicle boom as Ford booked a huge loss. The lesson for investors is that even a bubble popping isn't necessarily that destructive if the technology can be put to good use.
The price for failing to forecast what American customers want and the shifting regulatory landscape is $19.5 billion in charges for Ford. But the car maker's pivot to hybrid and so-called extended-range EVs is a reminder that a failure to predict the exact shape of the future doesn't mean you can't capitalize on it.
That could be a soothing thought for sliding AI-exposed stocks such as Oracle and Broadcom. The market has turned decisively against heavy technology spending -- just ask software company ServiceNow, which shed $21 billion in market value Monday on a report that it was planning a $7 billion cybersecurity acquisition. That looks like an overreaction rather than prudence.
Even if spending proves to be excessive, it won't all be wasted as companies pivot. Meta Platforms CEO Mark Zuckerberg has noted that if his social-media company builds too many AI data centers it can put them to alternative uses or rent them out. Ford agrees -- it is now aiming to turn EV battery factories into sites manufacturing batteries for data centers.
As Oaktree Capital Management LP co-founder Howard Marks put it in an insightful investment memo last week, "No one should go all-in without acknowledging that they face the risk of ruin if things go badly. But by the same token, no one should stay all-out and risk missing out on one of the great technological steps forward."
Ford decided it couldn't miss out on the EV future and is now paying the price for its partial U-turn, but it has avoided ruin. A collapsing AI bubble could work out the same way.
-- Adam Clark
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Ford Motor to Take Big EV Charge. Here's the Good News.
Ford Motor is the latest auto maker to do a major pivot on all-electric vehicles, mostly because they haven't produced the returns once imagined. Ford instead is turning to hybrids, a move it says is following the customer. It also means Ford takes a $19.5 billion one-time charge, nearly half for EV asset write-downs.
-- Andrew Frick, president of Ford Blue (the gas-powered vehicle maker) and
Ford Model e (the EV maker), said consumers want the benefits of
electrification, but also affordability and confidence in operational
range. Looking ahead, Ford expects electrified vehicles to account for
50% of sales by 2050.
-- That goal includes "extended range electric vehicles," which are
battery-powered cars that have an onboard generator, running on gas, that
recharges batteries on the fly. There will be an EREV F-150 truck in the
future, but Ford isn't planning to make a battery-only version of its
best-selling vehicle.
-- Ford typically spends about $9 billion a year on new plants and equipment,
and another $8 billion on engineering, research, and development. The
hefty one-time charges include $6 billion in charges related to an EV
battery joint venture and $5 billion in other expenses.
-- The charges are necessary, Frick says, because large EVs won't be
profitable and it's focused on making "affordable" all-electric cars.
Ford still plans to launch a midsize electric truck in 2027. Ford's Model
e division is expected to be profitable by 2029. It lost $1.2 billion in
the third quarter.
What's Next: Ford expects 2025 operating profit of $7 billion, up from earlier guidance of $6 billion to $6.5 billion. That implies a fourth-quarter profit of about $1.3 billion, which is above expectations, according to FactSet. Ford is starting a stationary energy-storage business, like Tesla's.
-- Al Root
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Bitcoin Dips Below $86,000 as Risk Sentiment Grows
The price of Bitcoin, the largest cryptocurrency, sank below $86,000, a signal that the risk-off sentiment continues to grip the markets. Though the price did recover to $87,000 early Tuesday, investors have been bidding up the price of less risky assets such as gold and selling crypto and tech.
-- Bitcoin was down 31% from its record high of more than $126,000 in early
October. It was down seven of the past eight days as of Monday, according
to Dow Jones Market Data. That's its longest losing streak since August,
when it fell for six straight days.
-- Stocks tied to the crypto market also fell Monday. The exchanges Coinbase
Global and Robinhood Markets closed down 6.4% and 3.6%, respectively.
Strategy, the largest corporate holder of Bitcoin, dropped 8.1%.
-- The downward trajectory is contrary to Bitcoin's December pattern. It has
risen an average of 9.2% for the month since 2014, according to Dow Jones
Market Data. Now about halfway through the month, Bitcoin is down around
6%.
-- Crypto weakness isn't stopping some from diving in. JPMorgan Chase's
asset-management arm is rolling out its first tokenized money-market fund
to institutional investors with at least $25 million in investments and
individuals with at least $5 million. The minimum investment is $1
million.
What's Next: A flurry of macroeconomic data this week could usher in a crypto comeback, particularly if today's November jobs report and Thursday's November inflation data strengthen the case for another Federal Reserve rate cut in January. Risky assets like crypto tend to respond favorably to lower rates.
-- Callum Keown, Nate Wolf, and Janet H. Cho
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Comcast's Spinoff Versant Could Figure in Paramount, Netflix Fight
Comcast's spinoff, Versant Media Group, could figure in the current takeover battle between Paramount Skydance and Netflix for Warner Bros Discovery. That's because the higher the valuation of Versant, the better for Netflix since it would imply a higher valuation for Warner's cable business, including CNN and TBS.
-- The deal that Netflix struck with Warner Bros. would leave out the
Warner's cable network business, Discovery Global, to be spun off to
Warner Bros. shareholders. The business is similar to Versant's portfolio,
which includes CNBC, MS NOW (formerly MSNBC), and Golf Channel.
-- Versant debuted Monday trading at a price that values the company's
equity at about $6.5 billion in when-issued trading, which is a technical
term prior to a spinoff being finally separated. With light trading, it's
difficult to immediately draw a conclusion about Versant's ultimate
trading level. The final separation is after the close on Jan. 2, with
regular trading starting Jan. 5.
-- At $45, Versant would be valued at about 4.5 times projected 2026
earnings before interest, taxes, depreciation, and amortization, or
Ebitda, of $1.925 billion, based on its forecast. Barron's valuation of
4.5 times reflects Versant's enterprise value (equity value plus net
debt).
-- Paramount has offered $30 a share in cash for all of Warner Bros. while
Netflix is only after its streaming business, HBO, and movie studio among
other assets. The superiority of the Netflix deal hinges in part on the
cable valuation, which Barron's has estimated around $4 a share.
What's Next: Versant is what Wall Street calls a "melting ice cube" with declining revenue and cash flow. But it generates significant free cash flow -- a projected $1.1 billion next year -- has a good balance sheet, and could become a takeover target. It has been seeking to diversify away from traditional cable revenue.
-- Andrew Bary
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After Purging Federal Workforce, Trump Forms Tech Force
The Trump administration will create a "Tech Force" to address the federal government's shortage of specialized technical expertise, especially for a push to adopt artificial intelligence. The move comes after the administration's federal workforce purge this spring made it short of the technology expertise it needs.
-- The program will hire 1,000 fellows for one- or two-year stints, led by
experienced technical managers hired from the private sector.
Participants will receive technical training and work closely with senior
engineers on projects across numerous federal departments and agencies.
-- The engineers, data scientists, and technology leaders are hoping to
solve some of the government's most complex and large-scale challenges in
AI, cybersecurity, data science, and software engineering. They would
work to modernize government, "fast-track AI adoption," and "unleash"
innovation at tech companies.
-- University of Michigan public policy professor Donald Moynihan noted that
the administration fired some of the government's top technologists
during the purge by Elon Musk's Department of Government Efficiency,
including the U.S. Digital Service and 18F business office.
-- Private sector companies participating in the Tech Force program include
top tech and AI companies such as Magnificent Seven members Amazon, Apple,
Google's public sector group, Microsoft, Meta, and Nvidia. Other software,
AI, finance, and app-based companies are also participating.
What's Next: The tech companies involved in the program have pledged to recruit workers for the Tech Force and could potentially hire workers leaving at the end of their government stints. The program also wants to offer 200 students public-service experience and the opportunity to earn college credits.
-- Janet H. Cho
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Why Rocket Lab Stock Plunged After Another Successful Launch
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December 16, 2025 06:43 ET (11:43 GMT)
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