Monthly Market Debrief

Market Snapshot

October was a rough month with the S&P 500 and DOW Jones barely squeaking out in the green. The NASDAQ, on the other hand, suffered from continued fears over the AI bubble bursting (if you think it exists to begin with). 

Over the past several months, several interrelated companies have announced deals that resulted in essentially “magic money.” A chip or server maker maker (NVIDIA, Intel, AMD) announces a deal with an AI company (OpenAI, Anthropic, xAI) with an agreement to buy/invest $XXX billions in each other. The resulting deal then bumps both company’s valuations beyond the value of the deal. The party started to burst in November as the Dot Com bust similarities became too hard to ignore.

Let me show you the circle:

Oracle, a data center giant, announces a $40 billion dollar deal with NVIDIA to build more data centers specifically for OpenAI.

Now that Oracle is building all these data centers, OpenAI says let me buy more data!

So OpenAI secures $300 billion in computing power to fuel its flagship ChatGPT over the next five years.

But wait, OpenAI’s revenue is only $13 billion (revenue, not profit). How is it going to pay for this deal? Oh! I know!

NVIDIA! The same company that’s making the chips for the data centers will give OpenAI the money to use the data centers. 

So in summary: OpenAI buys computing power from Oracle. Oracle buys chips from NVIDIA. NVIDIA gives that money back to OpenAI to pay for the computing power.

This is a dangerous cycle that collapses the moment the promise of AI doesn’t live up to the hype. OpenAI has $1 TRILLION in commitments with only $13 BILLION in revenue. That is a spicy meatball… or spicy bubble. 

Remember, STAY THE COURSE. I don’t recommend doing anything or changing anything about your investment portfolio with what I am about to say.

I fully believe we are in an AI bubble that is going to burst. Could be tomorrow, could be next year. I don’t know when. 

More importantly, I have no idea how the government will respond or what will happen after the bubble pops. Keep your investments diverse, keep investing consistently, and stay the course.

With all that being said… let’s look at a company benefiting from this AI bubble!

Company Highlight - SanDisk

SanDisk joined the S&P 500 on November 28th after posting a staggering +500% gain in 2025. The flash memory specialist, spun off from Western Digital in February 2025 (after being bought in 2016), rode a perfect wave of AI-driven data center demand colliding with tight supply. 

Magnificent 7 companies like Microsoft, Amazon, and Google need massive memory supply for their AI infrastructure buildouts. With shortages expected to persist through 2026, SanDisk stands to remain profitable under high demand. 

The stock trades at steep multiples (4.1x sales vs 1.7x for the broader tech sector), and fiscal Q1 results showed revenue up 23% year-over-year with earnings per share more than tripling quarter-over-quarter. Wall Street maintains a consensus "buy" rating with an average price target of $258, suggesting another 17% upside despite the meteoric run. 

Memory is historically cyclical, and any softness in AI spending or pricing could trigger sharp corrections. The stock already experienced a 20% single-day drop earlier this year, but what stock hasn’t??

Debrief on Deck

Next week we will talk about the Black Friday and Cyber Monday details that are all over social media. Dollars spent is up! But volume is down and buy now, pay later hit record usage? I feel like that’s a bad combo…

Until then, stay the course.