Key Takeaways
- Meta Platforms (META) is reportedly in discussions to procure Google's (GOOG, GOOGL) AI chips, potentially a multi-billion-dollar deal starting in 2027, marking a significant strategic shift for Google to compete with Nvidia (NVDA).
- Kohl's (KSS) and Best Buy (BBY) posted stronger-than-expected Q3 2025 earnings, with Kohl's shares rallying as much as 25% and Best Buy reporting a 2.7% enterprise comparable sales increase.
- Deutsche Bank maintains its forecast for a 25 basis point Federal Reserve rate cut in December, followed by an "extended pause" through 2025.
- The proportion of unemployed Americans with four-year college degrees has reached a record 25.3% of total unemployment, doubling since the 2008 financial crisis.
- "Big Short" investor Michael Burry has likened Nvidia (NVDA) to Cisco (CSCO) during the dot-com boom, suggesting the AI market may be in a bubble.
AI Chip Market Heats Up with Potential Meta-Google Deal
The artificial intelligence (AI) chip landscape is poised for a significant shake-up as Meta Platforms (META) is reportedly in multi-billion-dollar discussions with Google (GOOG, GOOGL) to acquire its custom AI chips, known as Tensor Processing Units (TPUs), starting in 2027. This potential deal could also see Meta renting TPUs from Google Cloud as early as next year. This strategic move by Google to offer its TPUs directly to customers marks an escalation in its competition with Nvidia (NVDA, the current market leader in AI accelerators. Broadcom (AVGO) shares rose as much as 4.6% today, benefiting from its partnership with Google on TPU development.
Meanwhile, renowned "Big Short" investor Michael Burry has drawn parallels between Nvidia (NVDA) and Cisco (CSCO during the dot-com era, implying a potential bubble in the current AI boom. Burry's commentary suggests that while new companies often pivot, the underlying market dynamics for AI infrastructure could mirror past speculative periods.
Retailers Kohl's and Best Buy Exceed Q3 Expectations
Retailers Kohl's (KSS) and Best Buy (BBY) delivered robust third-quarter 2025 earnings that surpassed analyst expectations. Kohl's (KSS) shares surged by as much as 25% following its report. The department store chain reported net sales of $3.4 billion, exceeding estimates of $3.33 billion, and an adjusted EPS of $0.07 against an estimated loss per share of $0.16. The company also raised its full-year adjusted EPS outlook to a range of $1.25 to $1.45.
Best Buy (BBY) also posted strong Q3 2025 results, with revenue reaching $9.67 billion (vs. estimated $9.58 billion) and adjusted EPS of $1.40 (vs. estimated $1.30). The electronics retailer saw a 2.4% increase in U.S. comparable sales and a 2.7% rise in enterprise comparable sales, outperforming expectations.
Economic Indicators Point to Fed Rate Cut and Shifting Labor Market
Deutsche Bank reiterated its forecast that the Federal Reserve will implement a 25 basis point rate cut in December, followed by an "extended pause" in rate adjustments through 2025. This outlook anticipates a measured return to easing, with potential further reductions in early 2026.
A notable shift in the U.S. labor market shows that Americans with four-year college degrees now constitute a record 25.3% of total unemployment. This figure has doubled since the 2008 financial crisis, highlighting a significant slowdown in white-collar hiring and raising questions about the evolving value of a college degree amidst increasing automation and AI adoption.
Geopolitical Tensions and Energy Markets
In geopolitical news, the UK has expressed its willingness to deploy "boots on the ground" and "planes in the air" to support a ceasefire and lasting peace deal in Ukraine. This commitment follows a Tuesday discussion between UK Prime Minister Keir Starmer and Ukraine's President Volodymyr Zelenskiy.
Energy markets are also seeing developments, as Russia's Black Sea Novorossiisk and CPC oil terminals have resumed loadings after overnight drone attacks, indicating a swift recovery in operations. Separately, Iranian crude held on tankers at sea has climbed to a two-and-a-half-year high, suggesting softer buying from China despite Iran's continued high export levels. This accumulation of Iranian oil in floating storage points to potential shifts in global crude demand and supply dynamics.
Other Corporate and Policy Updates
Tesla (TSLA) saw its price target cut by Mizuho to $475 from $485, reflecting analyst adjustments for the electric vehicle giant. Volkswagen (VWAGY) announced plans to slash electric vehicle development costs in China by as much as 50%, aiming to enhance its competitiveness in the crucial market. In a significant downgrade, Deutsche Bank cut its price target for DuPont (DD) to $46 from $90. The China Space Agency is set to develop new policies for commercial satellite launches, tracking, on-orbit operations, transfer, deorbit, and re-entry, signaling a structured approach to its burgeoning commercial space sector. French prosecutors have also initiated an investigation into eBay (EBAY.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.