Smart Investor: Alphabet vs. Nvidia, the Back-On Fed Rate Cut, and Sell-By Dates for Bull Markets

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We might be hitting an inflection point in the AI boom/stock market party. Investors are starting to be more discerning about how the landscape will look in the longer term, not just a quarter or two down the road.

Case in point are the developments for Alphabet this past week. First was the news that the company’s Gemini 3 AI model was outperforming OpenAI’s ChatGPT. Then came a report that Meta is planning to use semiconductors built by Alphabet in its data centers. Alphabet’s stock surged to yet another record high on the news. But for Nvidia, the reigning champion of the AI boom, the chip news was seen as a shot across the bow. Morningstar analyst Malik Ahmed Khan sees the Alphabet news as more evidence that the company is “exceptionally well positioned in everything AI.” Meanwhile, senior equity analyst Brian Colello isn’t shedding any tears for Nvidia, but he thinks the Meta news might be more of an issue for AMD.

The AI trade has also been the primary driver of this year’s rally in the overall stock market. For about two months, the market has broadly moved sideways. This past week, shortened by the holiday, was quiet but stocks posted solid gains. Still, with a month to go in 2025, stocks are up some 16% for the year. Not too shabby, all things considered.

In the backdrop, one factor supporting the market is that bond traders have decided that the on-again/off-again December interest rate cut from the Federal Reserve is back on. Sarah Hansen explains what appears to have driven the flip-flop in sentiment.

Lastly, how much more gas does the bull market have in the tank? Larry Swedroe digs into some interesting research on the history of stock returns for warning signs around when bull markets turn south and how investors can prepare.

As always, be sure to visit our Markets page for our latest coverage and live stock market updates, along with our full weekly calendar of key upcoming data and events.