Are AI Stocks In Danger After the Midterms? Here's My Plan

Market and AI/Semiconductor Stocks

The speaker describes a broad market rally after the midterm elections, alongside sharp declines in AI, semiconductor, memory, and data-center-related stocks. On the day discussed, Nvidia and Broadcom were each down 2.2%; Microsoft was up 6%, Google 4.8%, Meta 2.2%, and Amazon 6.7%.

The speaker attributes some weakness in “neocloud” and data-center stocks to political headlines about Texas permitting and proposed data-center requirements. The proposals discussed include grid and water protections, transparency, local input, and preventing higher utility costs for households. The speaker considers the market reaction excessive and notes that Nebius has no data centers in Texas and operates across multiple regions.

The speaker says 42 semiconductor stocks were at least 40% below their 52-week highs; Intel was down 56%. They frame the declines as a correction after excessive optimism and rising valuations—not proof that every stock is now cheap.

The speaker argues that political headlines should not, by themselves, determine whether to sell AI holdings. They also say the historical tendency for the S&P 500 to rise after midterm elections supports looking beyond short-term election noise.

AMD and Nvidia

AMD was described as up 120% year to date despite a recent 23–24% pullback, with a market capitalization of about $814 billion and a current P/E of 44.5. The speaker expects its P/E to decline if earnings forecasts continue to rise.

AMD’s results and guidance were characterized as strong:

• Next-quarter revenue guidance was about $17 billion, versus a market expectation of $16.1 billion.
• The market was expecting roughly 76.3% growth to about $90 billion for the following fiscal year. The speaker cited company expectations of more than 80% growth in FY2027 and revenue approaching $100 billion, and also cited at least $94 billion as a possible next-fiscal-year revenue figure.
• Management indicated double-digit server CPU revenue growth, more than a doubling of data-center AI revenue, and data-center revenue exceeding 80% of total revenue.

Nvidia, described as a $5 trillion company, was said to expect at least 70% growth in the next fiscal year. The speaker views that growth outlook at Nvidia’s scale as evidence that demand has not yet slowed.

Despite being positive on AMD and retaining a large position, the speaker said they were not buying AMD at that time. They viewed Nebius, Broadcom, Nvidia, Meta, and Google as more attractive on risk/reward or valuation grounds.

Nebius and AI Infrastructure

The speaker expected Nebius’s upcoming report and forecasts to be strong, and suggested its 2027 ARR could surprise investors based on current GPU prices and contracted business. They cautioned that ARR can change and recommended monitoring quarterly execution against company targets rather than relying too heavily on an ARR figure.

The broader caution was that AI infrastructure businesses require substantial capital. The speaker says tighter lending standards and higher borrowing costs could make it difficult for new competitors to finance chips and infrastructure, potentially making it harder for a new entrant to replicate Anthropic’s rapid rise.

Howard Marks and Investing Approach

The video quotes Howard Marks advising investors to ignore day-to-day price moves and build portfolios for the long term. The speaker’s investment framework is to:

• Focus on businesses, management commentary, sector direction, growth, and spending—not daily market noise.
• Buy shares in companies expected to grow over the long term, and lend to companies likely to repay their debt.
• Avoid hyperactive buy/sell behavior and not let election headlines alone drive decisions.
• Recognize that fast-changing AI businesses can be difficult to value with conventional forecasts. The speaker contrasts Apple, whose future cash flows may be easier to model, with Anthropic, whose five-year outcome is much less predictable.
• Consider that demand for computing power would likely shift to other providers even if Anthropic or OpenAI were to falter.

Anthropic and Financing Risk

The speaker cites an estimated private-market valuation of more than $1 trillion for Anthropic, while suggesting a public-market valuation might differ. This is presented as the speaker’s estimate, not as a confirmed public valuation.

Figures cited for Anthropic’s third quarter include:

• Revenue of about $17 billion, up 1,100% year over year and 46.7% quarter over quarter.
• Computing and infrastructure costs of about $9.86 billion.
• Adjusted operating income of $2.46 billion, with a 15% adjusted operating margin.
• GAAP operating margin of negative 3%.
• Nine-month operating cash flow of $6.6 billion.
• Future liabilities or commitments of about $900 billion.

The speaker sees a strong, fast-growing business but warns that costs are rising and that sustaining growth or improving efficiency will be important. They also characterize the valuation as potentially very high.

On credit markets, the speaker describes a cycle in which strong borrowing demand leads lenders to become more selective and charge more, making financing harder for riskier companies.

Uber

Uber shares were up 8.3% on the day discussed but down about 13% year to date. The speaker cites a market capitalization of about $150 billion, a forward P/E of 17.8, and a PEG ratio of 0.6.

Quarterly operating metrics cited:

• Gross bookings up 20% year over year.
• Non-GAAP operating income up 38%; non-GAAP EPS up 35%.
• Trailing-12-month free cash flow of $10.4 billion.
• Revenue growth of 10% as reported, or 18% after adjusting for a business-model change.
• Trips up 16%; monthly active platform customers up 14%; adjusted EBITDA up 31%; and GAAP operating income up 30%.
• Net income and EPS fell, which the speaker attributed largely to a prior-year $4.9 billion tax benefit. Quarterly free cash flow increased 14%.

Segment figures cited:

Metric Mobility Delivery Freight Gross bookings +17% +23% +35% Revenue -2% +23% +34% Operating profit +27% +30% Unprofitable, but near breakeven

Grocery and retail were described as growing 40% to $15 billion. About 70% of delivery bookings came from subscribers, and the number of U.S. merchants increased 12%.

Uber attributed slower mobility booking growth to supply constraints, including driver shortages in Brazil, India, and Canada—not weaker demand.

Uber’s stated priorities were organic growth in its core business, building an autonomous-vehicle ecosystem, opportunistic buybacks, and pausing further M&A while integrating past deals. The speaker cites a $10 billion autonomous-vehicle commitment tied to partnership milestones and a 3.5% year-over-year reduction in shares outstanding.

The Q4 outlook cited:

• Gross bookings growth of 20%.
• Non-GAAP EPS growth of about 36–37%.
• Adjusted EBITDA growth of about 28%.

Autonomous-vehicle targets and comparisons cited:

• About 700 fully driverless vehicles by the end of 2026 and more than 2,000 by the end of 2027, with tens of thousands targeted from 2028 onward.
• Uber’s U.S. hybrid markets reportedly had more than 20 trips per vehicle per day, compared with roughly 10–15 for Waymo and Tesla in emerging markets.
• During Halloween week, the speaker says AI agents placed about 500 Uber Eats orders and made four rides, out of 320 million total trips.

The speaker considers Uber’s core business profitable, growing, and investing, and was satisfied with the results.

Assets, Companies, and Sectors Mentioned

Publicly traded companies and tickers: Nvidia (NVDA), AMD (AMD), Broadcom (AVGO), Intel (INTC), Dell (DELL), Nebius (NBIS), Microsoft (MSFT), Alphabet/Google (GOOGL/GOOG), Meta (META), Amazon (AMZN), Apple (AAPL), Uber (UBER), SanDisk (SNDK), Credo (CRDO), KLA (KLAC), Marvell (MRVL), POET Technologies (POET), Rigetti Computing (RGTI), Tesla (TSLA), and Rivian (RIVN).

Other companies and organizations: Anthropic, OpenAI, Waymo, Waabi, Wayve, Delivery Hero, Blacklane, Easycater, SpotHero, Trendyol Go, Getir, ERCOT, and TWDB.

Sectors and themes: AI, semiconductors, memory, data centers/neoclouds, cloud computing, autonomous vehicles, mobility, delivery, freight, and corporate debt/financing.

Index: S&P 500.

No specific bond, commodity, or cryptocurrency investment was discussed.

Disclosures and Cautions

• The subtitles contain no explicit “not financial advice” disclaimer.
• The speaker repeatedly cautions against treating short-term price movements and political headlines as investment signals, and notes that not all semiconductor stocks are necessarily cheap after their declines.
• Figures and forecasts above are reported as presented in the video and are not independently verified here.

Presenters and Sources

• Presenter: Couch Investor; the speaker is not named in the subtitles.
• Quoted source: Howard Marks.
• Other names referenced: Amir, credited in connection with a chart/source, and Tanner, mentioned as a fellow content creator.