Markets Jitter as AI Questions Rise and Consumer Strain Deepens

Hi, this is Steve Eisman and welcome to another edition of the Weekly Wrap for the week ending November 14, 2025.

Before we get into the markets, I want to address a few comments I have received about my appearance and my thinning hair. Long-time listeners already know this, but for the newer ones, here is the update. In June, I was diagnosed with breast cancer. My doctors are confident that I will make a full recovery, but I am in the middle of chemotherapy right now. That explains the thinning hair and most likely, I will lose the rest of it in the coming weeks. So I have started wearing a hat. Now let’s move on.

Macro: Government Reopens, Markets Jitter

The big news this week is that the government shutdown finally ended. On Monday, eight Democratic senators crossed over and voted to reopen the government. The House passed the bill and the president signed it on Thursday morning. This only funds the government through January 20, so we may go through this all over again, but hopefully not.

On this news, the market staged a strong rally on Monday. Since then, concerns about AI spending and the health of the economy have crept back in. On Thursday, the market rolled over with the Nasdaq down more than 2 percent and the S&P 500 not far behind.

Two weeks ago, over 150 companies reported. Last week, more than 130 reported. This week, only 10 companies in the S&P 500 posted results. But earnings season is not over until Nvidia reports, and that is happening next Thursday.

Before we get to earnings, I want to highlight three things.

The U.S. Consumer Is Weakening

First, in another sign that the mid to low-end consumer is under real pressure, Fitch reported that subprime borrowers who are at least 60 days delinquent on their auto loans rose to 6.65 percent in October. That is the highest reading since 1994.

Michael Burry’s AI Short: What He Is Arguing

Second, as I mentioned last week, Michael Burry disclosed an options short position on several AI names. This week, he posted part of his thesis online.

He highlighted that Meta, Google, Oracle, Microsoft and Amazon have all extended the useful life of their network compute equipment. In 2020, they depreciated these assets over three to five years. Today, they depreciate them over five to six years.

To illustrate this, suppose Meta spends 75 billion dollars on compute equipment in 2025. They do not expense that 75 billion in the same year. They expense it over time. In 2020, they would have depreciated it over three years at 25 billion per year. Now they depreciate it over six years at 12.5 billion per year. In this simplified example, Meta’s earnings look 12.5 billion dollars higher each year.

Burry argues that this inflates earnings artificially and that by 2028, Meta’s earnings will be overstated by about 21 percent and Oracle’s by 27 percent.

Viewers have asked me what I think about this. Here is my answer. Even if we accept his argument, I do not think it matters very much. The real question for AI spending is whether these massive investments will produce the returns and the cost savings the companies are hoping for. That is the key question. Depreciation schedules are not going to determine the long-term outcome. Burry says he will have more on this on November 25, so stay tuned.

Big Banks Outperform Private Equity

Third, a trend we discussed in my recent interview with Glenn Shaw at Evercore continued this week. Big banks like Goldman and Morgan Stanley are outperforming private equity firms by a wide margin.

Goldman is up around 47 percent year to date. Morgan Stanley is up around 35 percent. Blackstone is down 16 percent and Apollo is down about 20 percent. Investors want exposure to strong M&A activity and a healthy IPO calendar, so they are buying the investment banks and avoiding the big private equity shops where concerns about private credit continue to linger.

Earnings of the Week

CoreWeave

CoreWeave is a newly public AI data center builder and operator. It reported Monday night and the Q3 numbers were solid. Revenue and operating income beat expectations and revenue backlog was up roughly 85 percent. The problem is that one data center project slipped, so they reduced guidance for the December quarter. The stock fell 16 percent.

To make matters worse, management created confusion during the call. At one point they blamed one data center, later they referred to a data center provider. Some investors took that as a reference to Core Scientific, the company they attempted to acquire earlier.

This is a high-multiple stock. They are not expected to be profitable until 2027 and the stock traded at roughly 47 times 2027 earnings before the decline. At those valuations, you cannot miss on anything, even something small. That said, revenue grew 134 percent year over year, which shows how rapidly they are growing. The concern is competition. GPU cloud providers are aggressively fighting for contracts, and many of them have deep-pocketed backers. If demand ever slows, this could turn into a market share food fight.

Cisco

Cisco also reported this week. It benefited from AI spending and the numbers were good. Earnings per share were one dollar versus 91 cents last year. Revenue rose 8 percent and beat expectations. They raised revenue and EPS guidance for the next quarter and the full fiscal year.

But Cisco still has many traditional enterprise businesses that drag on growth. Even with raised guidance, full year EPS growth is expected to be only 9 percent. Arista, its key competitor, is expected to grow earnings by around 20 percent in 2026. AI is helping Cisco, but the legacy weight is still real.

Paramount

This was the first quarter of the combined Paramount Skydance company. Paramount’s market cap is 17 billion dollars. Netflix’s market cap is 475 billion dollars. The scale difference is incredible. Revenue for the quarter was 6.7 billion and flat year over year. They outlined 1.5 billion dollars in post-merger savings, but none of this matters much. The real question is whether Paramount will be able to acquire Warner Brothers. That dance continues.

Disney

Disney reported Thursday morning with mixed results. Earnings came in at one dollar and eleven cents, down 3 percent year over year, but ahead of expectations. Revenue of 22.5 billion dollars was slightly down and slightly below estimates.

The story at Disney is unchanged. Streaming is improving. Linear networks continue to decline. Streaming operating income rose 39 percent, while linear dropped 21 percent. The company has scale and a market cap north of 200 billion, but there is no total growth yet. That is why investors prefer Netflix, even at more than forty times earnings. The narrative is cleaner.

Circle

Circle, the stable coin issuer that went public in June, had a big third quarter. Earnings were 64 cents, far ahead of the 20 cents expected. Revenue was 740 million, up 66 percent. USDC in circulation reached 74 billion dollars, more than double the level a year ago.

Despite these results, the stock fell 12 percent. Circle raised its expense outlook and 200 million insider shares are unlocking this week, which adds pressure. The 2026 consensus earnings estimate is 1 dollar and 34 cents, which implies a price to earnings ratio of about 70. Even if estimates rise, the multiple will remain very high. As we have learned this quarter, high flyers cannot disappoint in any way.

The stable coin space is extremely competitive and extremely important in payments. The real question is which company will end up with dominant market share. This will be a major topic for years.

Mailbag

This week’s question came from Andre. He asked what data points I look at when I say we are in an M&A advisory boom.

Institutional investors have access to industry databases that retail investors rarely see. In this case, I am referring to data from Dealogic. The important metric is announced M&A volume, which has been rising rapidly. If you want to see the charts, visit my website at realismanplaybook.com. In the blog section, I will include them in the summary of this wrap.

Closing Thoughts

One of the themes we keep coming back to is how every industry is being reshaped by technology, social media and AI. This Monday, I will post an interview about the book publishing industry with two literary agents and a publisher. We talk about how much the industry has changed due to Amazon, social media and now the early impacts of AI.

This past Monday, I posted a wide-ranging interview with Glenn Shaw from Evercore, where we discussed the explosive growth in private lending and any potential problems that might be hiding beneath the surface.

If you have not subscribed to our YouTube channel yet, please consider doing so. It is the best way to support the work we do. You can also visit realismanplaybook.com for all our episodes, our financial literacy master classes and more.

See you next week. And as always, this podcast is for informational purposes only and does not constitute investment advice. Opinions are my own. Please do your own due diligence and consult a licensed adviser before making investment decisions.

Thanks for reading this week’s wrap.
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This post is for informational purposes only and does not constitute investment advice. Please consult a licensed financial adviser before making investment decisions.