Stocks have been largely flat of late, with the S&P 500 creeping up ever-so-slightly last week and the Nasdaq Composite showing similarly modest gains. These numbers are the result of improving breadth and performance in sectors outside of technology. The larger tech stocks have largely felt pressure in the face of continued concerns about AI, punctuated by recent news from Broadcom (AVGO) and Oracle (ORCL).
Oracle reported funding issues for its planned Michigan AI center, with Blue Owl Capital notably declining to provide backing despite having frequently done so for Oracle in the past. But as Fundstrat Head of Research Tom Lee reminded us, this does not necessarily reflect on the viability of the AI thesis. "Progress in AI will never be a straight line up and to the right," he pointed out, "and this setback, to us, seems like a normal course of business." He added, "Not every deal will have the same set of partners."
Similarly, Head of Data Science "Tireless" Ken Xuan seemed largely unperturbed about Broadcom's earnings (and the market's reaction to them) during our weekly research huddle. "I thought the earnings numbers were fine, they show that the business is still growing," he told us, though he acknowledged that Broadcom's ASIC-focused business is arguably more prone to competitive pressures.
Head of Technical Strategy Mark Newton sees near-term constructivism as justified. "It's interesting that growth projections continue to rise, which would be great for earnings, and inflation appears to be potentially nonexistent. To me, that's a real Goldilocks-type scenario for the market, at least in the short run."
Though broader indices have not exactly wowed casual observers this week, Newton told us "the market is really not as bad as what the tape has shown. Breadth in the last two weeks has actually gone straight up," he continued, with new highs in view for equal-weighted S&P 500, small caps, and Dow transports. "Those are all very big positives," he asserted. The S&P 500 successfully exceeding 6,800 on Thursday gave Newton optimism for a rally over the last two weeks of the year. "This, to me, suggests that we are likely going to 7,000 between now and end of year."
That's a call that puts Newton's near-term views largely in line with Lee's, who wrote that "seasonals remain favorable, and we see at least 5% upside into year-end which implies S&P 500 at 7,000 or more."
[Editor's note: FS Insight Snapshot will not publish on Dec. 28, 2025. It will return Jan. 4, 2026. We wish all members of the FS Insight community a happy holiday season and a healthy, prosperous 2026.]
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