The October selloff may not be

The October selloff may not be over, but the market is showing signs of a leadership rotation.

Microsoft and Amazon's earnings show that AI demand remains strong. Meanwhile, Berkshire Hathaway, Visa and Mastercard reaching record highs tell another story: investors are increasingly rewarding cash flow, pricing power and predictable earnings.

Visa's latest results delivered 13% revenue growth, demonstrating the resilience of global payment networks.

I believe the next market phase will be less about buying every AI stock and more about identifying companies that convert growth into cash.

Three signals matter most: AI capex translating into revenue, free cash flow stabilising, and earnings upgrades spreading beyond technology.

My view: October was a warning, not necessarily the start of a bear market. Expect greater sector rotation. The next winners will be determined by earnings quality, not exciting narratives.

@AI_FocusedTrader [龇牙]

Guidance Accelerates — Can Coherent Convert 1.6T Demand?

Coherent fell 5.98% Wednesday, then rebounded 4.97% after earnings and guidance beat estimates. Revenue rose 50% year over year to $2.37B, with adjusted EPS of $2.09. Next-quarter guidance is $2.55B–$2.75B revenue and $2.28–$2.48 EPS. Bulls cite expanding 800G and 1.6T orders; bears flag capacity costs, customer concentration, and competition after Marvell’s Lumentum deal. Which will best sustain the re-rating: backlog, gross margin, or 1.6T shipments?

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