To The Moon

Friday’s market could be particularly interesting as investors digest a difficult week for major technology stocks. The latest earnings reports have exposed an important divide: AI-related revenue continues to grow, but the cost of building the infrastructure is putting pressure on cash flow and investor confidence.

Alphabet’s sharp decline, Intel’s disappointing outlook and concerns about Amazon’s free cash flow have created a more selective environment. Investors may still believe in the long-term AI opportunity, but they are becoming less willing to reward spending without clear evidence of financial returns.

Here are six stocks and themes I would keep on the watchlist today.

1. Alphabet (GOOGL) – Can the sell-off create an opportunity?

Alphabet plunged 12.64% after its latest results disappointed investors.

Google Cloud revenue increased 103% to $30.71 billion, with operating income reaching $10.64 billion. However, free cash flow turned negative at $9.07 billion as capital expenditure reached $34.98 billion.

The company also raised its full-year capital expenditure guidance to $185 billion–$187 billion.

The opportunity is that Alphabet still has a rapidly growing cloud business, strong advertising operations and a significant position in AI.

The risk is that infrastructure spending could remain elevated for longer than investors expect.

What I would watch: Whether the share price stabilises after the sharp decline and whether investors begin distinguishing between temporary investment pressure and a longer-term deterioration in profitability.

2. Amazon (AMZN) – AWS growth versus cash flow

Amazon is another important stock to watch following its latest earnings.

AWS revenue grew 39% to $48.1 billion, showing that demand for cloud computing and AI infrastructure remains strong.

However, trailing 12-month free cash flow declined 35% to $42.2 billion.

This creates an interesting investment debate. AWS remains a major growth engine, but investors want to know how much additional cash the company can generate after funding its infrastructure expansion.

What I would watch: The market’s reaction to AWS growth, capital expenditure expectations and management’s outlook for free cash flow.

3. Intel (INTC) – Is the recovery taking longer than expected?

Intel’s latest outlook was particularly disappointing.

The company reported Q3 revenue of $16.5 billion, missing expectations, and guided for Q4 revenue of $15 billion–$16 billion and adjusted EPS of $0.25.

Its data-centre revenue surged 78%, but PC revenue declined 5%.

The difference highlights the uneven nature of the semiconductor market. AI infrastructure demand is strong, but traditional PC demand remains challenging.

Intel could attract attention after its sharp after-hours decline, but catching a falling stock carries risks.

What I would watch: Whether buyers emerge after the sell-off, how management addresses its operational challenges and whether PC demand shows signs of stabilisation.

4. Sandisk (SNDK) – Memory demand and the AI infrastructure trade

Memory and storage remain important parts of the AI infrastructure supply chain.

AI data centres need substantial storage capacity to support increasingly complex workloads. This creates opportunities for companies supplying memory and storage products.

Sandisk is particularly interesting because investors are watching whether strong AI-related demand can support revenue growth and pricing power.

However, memory markets are cyclical. Strong demand today does not guarantee that pricing and margins will remain favourable indefinitely.

What I would watch: Earnings commentary, demand expectations, pricing trends and whether AI-related demand is translating into sustainable profitability.

5. AstraZeneca (AZN) – A healthcare stock to watch

Not every opportunity needs to come from technology.

AstraZeneca is scheduled to report earnings on 30 October, making it an interesting stock to watch outside the AI sector.

Its oncology portfolio has been an important growth driver, while competition and generic pressure in other areas remain challenges.

The key question is whether its expanding drug portfolio can continue supporting growth and offset weakness in more mature products.

What I would watch: Revenue growth, oncology performance, earnings guidance and updates on its drug pipeline.

6. Exxon Mobil (XOM) and Chevron (CVX) – Energy earnings

The two major US energy companies are also on the earnings calendar for Friday.

These stocks provide exposure to a very different part of the market compared with technology and semiconductor companies.

Investors will be looking at production volumes, realised oil and gas prices, refining performance, capital allocation and shareholder returns.

Energy companies can offer diversification when technology stocks experience volatility, although their earnings remain sensitive to commodity prices.

What I would watch: Whether operating performance and cash generation remain strong enough to support dividends and buybacks.

My trading approach for Friday

I would be cautious about chasing large price movements immediately after earnings.

A company can report impressive revenue growth and still fall if expectations were too high. Conversely, a stock that drops sharply may continue declining if management’s outlook reveals deeper problems.

My approach would be:

• Watch for stabilisation: Look for stocks that stop making lower lows after a major sell-off.

• Check trading volume: A price recovery supported by stronger volume may be more meaningful than a small rebound on low activity.

• Compare guidance with results: Forward expectations often matter more than the previous quarter’s numbers.

• Avoid chasing the first move: Earnings reactions can remain volatile, particularly when the market is reassessing valuations.

• Keep some cash available: There is no need to enter every trade. Waiting for a clearer setup can be a valid decision.

My overall market view

The AI investment story is not necessarily over, but the market appears to be entering a more demanding phase.

Alphabet, Amazon and Intel illustrate three different challenges: the cost of AI infrastructure, the pressure on free cash flow and the uneven recovery in traditional hardware.

Meanwhile, memory, healthcare and energy offer different earnings drivers and may provide opportunities beyond the most crowded technology trades.

For me, the most interesting opportunities today are not necessarily the stocks that have fallen the most. They are companies where the underlying business remains sound, expectations have adjusted and the next earnings cycle could provide clearer evidence of value.

What Do You Think, Tigers?

Which stock is on your watchlist today: GOOGL, AMZN, INTC, SNDK, AZN, XOM or CVX?

Are you looking to buy the dip in beaten-down technology stocks, or would you rather rotate into healthcare and energy while the AI market reassesses its spending?

For discussion purposes only, not financial advice.