Global Markets Show Varied Trends Before U.S. Interest Rate Announcement
Market Overview: Global markets showed mixed results ahead of the Federal Reserve's anticipated interest-rate decision, with U.S. futures for the S&P 500 and Nasdaq rising, while the Dow remained flat after recent record highs.
Tech Sector Highlights: Microsoft’s partnership with OpenAI led to a 2% increase in its shares, pushing its market capitalization above $4 trillion for the first time, contributing to a positive sentiment in the tech sector.
Upcoming Earnings Reports: Major tech companies, including Alphabet, Microsoft, and Meta, are set to report their earnings on Wednesday, which could further influence market trends.
Political Developments: President Trump is on a tour of Asia and is scheduled to meet with Chinese leader Xi Jinping to discuss trade frameworks later this week.
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- Technological Breakthrough: Waymo launches its 6th generation autonomous driving technology, leveraging nearly 200 million miles of fully autonomous data to enhance performance in complex road conditions, marking an acceleration in large-scale deployment and strengthening the company's competitive edge in the autonomous driving sector.
- Enhanced Perception Capabilities: The new system utilizes advanced lidar, radar, and external audio receivers to surpass human vision and hearing, capable of extracting critical details in bright lights and shadows, thereby improving safety and reliability.
- Cost Efficiency Optimization: The 6th generation Waymo Driver employs a 17-megapixel imaging technology that reduces the number of required cameras while maintaining obstruction-free operation in adverse weather conditions like snow and rain, thus lowering operational costs.
- Production Scale Expansion: Waymo is undergoing a significant transformation at its autonomous vehicle factory in Phoenix, aiming to produce tens of thousands of autonomous vehicles annually, demonstrating the company's ambition and potential in the autonomous driving market.
- Market Potential: Quantum computing is projected to create between $450 billion and $850 billion in global economic value by 2040, offering substantial return potential for investors despite being significantly smaller than the trillion-dollar AI market.
- Stock Price Surge: As of October 2025, shares of IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. have skyrocketed by 670%, 6,217%, 3,912%, and 2,798% respectively over the past 12 months, reflecting strong market confidence in quantum computing.
- Significant Financing Risks: These four quantum computing companies collectively issued over $4.1 billion in common stock and warrants in 2025 to raise capital, indicating their unproven operating models and posing dilution risks for existing shareholders.
- Increased Competitive Pressure: With major players like Amazon and Microsoft ramping up investments in quantum computing, the low barriers to entry could threaten the market position of pure-play quantum companies, potentially leading to their obsolescence as the technology matures.
- Portfolio Shift: During a recent investor presentation, Ackman revealed that Pershing Square exited its long-held position in Chipotle, reallocating roughly 10% of its portfolio to Meta Platforms, indicating a strong conviction in the AI sector.
- Major Stake in Meta: Pershing acquired approximately $2 billion in Meta Platforms last quarter, representing nearly 10% of its fund, reflecting Ackman's optimism about Meta's growth potential, particularly in AI investments.
- AI Investment Outlook: Meta's Q3 earnings report indicated plans for significantly increased AI-related spending in the coming years, which initially spooked investors but Ackman believes will benefit Meta's core social media business by enhancing ad effectiveness and driving revenue growth.
- Valuation Appeal: Despite trading at 21.8 times 2026 earnings estimates, Meta's core business valuation drops to only 18 times when excluding Metaverse spending, highlighting its relative undervaluation in the market, which continues to attract Ackman's investment.
- Quantum Stock Performance: As of mid-October, stocks of IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. surged by up to 6,200% over the past year, reflecting strong investor confidence and robust market demand for this nascent technology.
- Market Potential Analysis: According to a forecast by Boston Consulting Group, quantum computing could generate between $450 billion and $850 billion in global economic value by 2040, attracting significant investor interest despite its smaller market size compared to artificial intelligence.
- Risks and Challenges: While quantum computing stocks present substantial return potential, they face risks such as share dilution and slow commercialization; collectively, these four companies issued over $4.1 billion in common stock and warrants in 2025 to raise capital, which could negatively impact existing shareholders.
- Competitive Pressure: With the
- Portfolio Restructuring: Ackman's Pershing Square exited its position in Chipotle to allocate approximately $2 billion into Meta Platforms, constituting nearly 10% of its portfolio, reflecting strong conviction in the AI sector.
- Market Reaction Analysis: Following Meta's Q3 earnings report, the stock plummeted from $750 to below $600, yet Ackman's cost basis is around $625, indicating his firm belief in Meta's future growth potential despite volatility.
- AI Investment Outlook: Meta plans to significantly ramp up AI investments by 2026, which may strain cash flow in the short term; however, Ackman argues that the core social media business will benefit, enhancing ad effectiveness and driving revenue growth.
- Valuation Advantage: While Meta trades in line with the market, its core business has a P/E ratio of only 18 times earnings, suggesting that with over 3.5 billion daily active users, Meta still presents an attractive opportunity for long-term value for investors.
- AI Investment Surge: Major cloud providers like Amazon, Microsoft, and Alphabet announced significant increases in capital expenditures during Q4 to support AI-related chip and data center investments, indicating a strong commitment to capitalize on AI opportunities and likely driving further market expansion.
- Palantir Exceeds Expectations: Palantir reported a 70% year-over-year revenue increase and a 79% rise in earnings per share in Q4, primarily driven by robust demand for its Artificial Intelligence Platform, highlighting the urgent need for AI solutions in the enterprise sector and the market's potential.
- TSMC's Strong Sales: Taiwan Semiconductor Manufacturing Company (TSMC) experienced a 26% year-over-year revenue growth and a 35% increase in earnings per share in Q4, with January marking its highest monthly revenue ever, underscoring the robust demand for AI and reinforcing market confidence in AI technologies.
- Wall Street's Bullish Outlook: Among 63 analysts, 94% rated Nvidia as a buy or strong buy, with Evercore ISI's Mark Lipacis setting a price target of $352, suggesting an 85% potential upside, reflecting the market's strong recognition of Nvidia's leadership position in the AI sector.








