Among them, AMD jumped 9% after forecasting accelerating sales growth over the next five years, and Cisco beat analyst estimates for last quarter and raised its annual guidance, saying that AI-boosted networking demand improved performance. Not only are they selling more hardware, but they’re also securing large AI infrastructure orders. That was exactly what investors wanted to hear: that AI investments are starting to show up somewhere in revenue generation. Cisco jumped 7.5% in after-hours trading.

But it doesn’t solve the puzzle of when Cisco’s clients — those who invest in chips, networks and data centers — will turn that investment, that spending, into revenue. And I’m afraid we won’t have the answer this quarter. Nvidia will probably announce another jaw-dropping result next week, but again, it won’t mean that those buying the chips are yet selling more stuff to end users.

Alibaba, for example, displayed slower growth in Singles Day sales this year despite using AI tools to boost activity, sending the stock price straight below the 50-DMA. We keep coming back to the same story: big spending, delayed results. For China, and for Alibaba, the big story isn’t even AI — it’s that consumer dynamics have been very difficult to revive since the pandemic. Meanwhile, in the US, consumers face the pressure of trade tensions, economic uncertainty and rising layoffs — partly due to AI-driven automation.

That being said, many of us continue to believe that short-term pain during this transition period will lead to long-term gain, as during the Industrial Revolution. On that note, Anthropic said it will invest $50 billion to build data centers in several locations including New York and Texas, a project expected to create around 3,000 jobs. There you go.

But still, Big Tech valuations and big spending will remain front of mind for investors until Microsoft, for example, can say that AI-boosted software sales have exploded — and that’s not yet the case.

Inspired by a comment claiming that most Big Tech companies are “safer than the US”, I looked at corporate growth through the lens of compound annual growth rates, pulled out their debt, and compared it with that of the US. It’s an odd comparison — apples to spaceships — since the US is a government while the tech giants are growth companies, they’re riskier by definition: if they go bankrupt, taxpayers won’t save them and they can’t print money. But the comparison was still revealing.

In terms of growth, Nvidia’s revenue has compounded by roughly 70% a year over the past three years, while Microsoft, Meta, and Amazon have grown between 10% and 25% annually — all multiples of the US’s roughly 3% GDP growth.

More importantly, although these companies have spent massively — maybe too much — their debt has either remained flat or grown far more slowly than their sales. In other words, their spending has been financed by cash, not borrowing. That makes their debt-to-revenue ratios much lower than the US. Numerically, the US debt-to-GDP ratio is around 118%, meaning the country spends more than it produces. Meanwhile, the debt-to-revenue ratios for Microsoft, Meta, and Amazon range between 20% and 45%, while Nvidia’s is almost null.

So, if we compared the US government to Big Tech using the same revenue-to-debt logic, Washington would look like the world’s most overleveraged company.

But of course, there’s more to the story. Big Tech has recently started selling bonds to finance higher spending and — more worryingly — teaming up with private equity firms to take on debt, keeping some of it off balance sheet. That’s something to watch.

As for the “safety” narrative: the US government remains safer as long as investors keep financing its debt by buying Treasuries. For now, they do. But developed market debt as a whole is increasingly seen as riskier, which may also explain why investors keep flocking into higher-risk assets despite stretched valuations. We’ll see how Rachel Reeves handles the Autumn Budget to keep investors on board — she’ll likely need to raise taxes. That ultimately means the UK will have to finance more of its own debt. The point is: “safe” status can be easier to lose than many think.

Coming back to market dynamics: futures are positive, and sentiment is more risk-on than risk-off this week. Investors are hopeful that upcoming US data will clarify the Federal Reserve’s (Fed) December intentions. But since the odds of a December cut are roughly 50-50, any data point could swing expectations either way.

I won’t waste time speculating whether the data will come in before the Fed decision — we’ll see as it flows in and watch how markets reposition. My guess for the next few weeks is as good as anyone’s.

What’s clearer, though, is that sentiment among oil bulls keeps deteriorating. OPEC’s latest monthly report said supplies exceeded demand sooner than expected — duh — due to rising non-OPEC production. The report sent US crude straight below $60 per barrel. Even the IEA’s prediction that global demand will keep growing until 2050, from around 100 mbpd today to 113 mbpd, couldn’t bring the bulls back. The barrel is now testing the $58 support with enough momentum to justify a deeper move below $55 per barrel, which acted as solid support earlier this year.