Last week, we discussed the Federal Reserve's interest rate cut. A ceasefire has begun in the trade war between China and the US. Many companies' balance sheets have arrived. It was a rather chaotic week, but the most important story of the week wasn't interest rates, the US-China talks, or the balance sheets. The sole topic was once again artificial intelligence. American tech giants clearly demonstrated once again that AI investments are the real reason behind their trillion-dollar market valuations. Billions of dollars in new infrastructure investments excited investors, driving stock markets higher. The S&P 500 and Nasdaq 100 indices closed the week near new records and broke records throughout the week. But this time, there was a difference. Investors seem to be losing their patience. So, as you know, the game in AI is to invest incredible amounts of money in data centers, hoping we'll make money one day. Now, that seems to have changed somewhat. In the near-term, short- to medium-term, investors want companies to make some money from these data center investments. Those who failed to do so or failed to convince investors were severely punished. For example, Meta was one of the most severely penalized. It has very high spending plans and can't produce a clear return. It experienced one of the sharpest declines in the last three years. I also have an investment in Meta. It was quite devastating.

Microsoft's revenue actually grew well. Its data center developments are also good, but investors were still dissatisfied. Microsoft's value fell around 4%. In other words, investors seem to be testing companies for discipline. They want to see where the returns on these investments are coming from. On the other hand, Amazon is doing well, and Google seems to have convinced its investors more about the potential of AI. Accelerating growth in Amazon Web Services pushed its stock up by around 10% on Friday last week. Amazon, which had been the worst-performing major tech company since the beginning of the year, made quite a comeback. Google's parent company, Alphabet, grew by around 2.5% due to strong demand for AI investments. As I said, Meta received the harshest punishment.

Because Meta doesn't actually have a revenue model directly based on AI. It doesn't operate a data center. It uses AI to improve its own advertising performance. This is what frightened investors a bit. Also, remember, Meta is a smaller company than others. In terms of both cash flow and market capitalization, companies like Microsoft and Google are valued around $4 trillion. Their cash flow is also much stronger. Meta is a smaller company, with a valuation of around $1.6-1.7 trillion. The market has begun to debate whether Meta can compete with this data center based on the money it generates from its own business. Frankly, I don't see much point in it, but that's what the market thinks. Because, in my opinion, Meta actually achieved the fastest revenue growth this quarter. Revenue growth was around 26%. This shows that Meta is effectively leveraging AI for its own business. Its advertising competitors, Google and Amazon, only grew by around 16% in their advertising segments. In other words, Meta is effectively implementing AI internally.

If you're good at applying AI to your own business, you'll eventually find services you can sell to the president. But as I said, the market is a bit impatient these days, expecting faster results. There's a famous saying, "Gold miners didn't make much money, those who sold them picks and shovels did." Last week's biggest gainer was Nvidia. Nvidia closed the week with a 9% increase, reaching a $5 trillion market capitalization. Nvidia is the first $5 trillion company in the world. I used to always consider Nvidia cheap. Very cheap. And now, I still don't find it expensive. I'll explain the reasons in another article. Smaller players in the AI ​​industry also performed well last week.

SMCI gained 4%. Broadcom gained 4%. Even Catterpillar, which benefited from the incredible growth in data center construction, rose 10%. As you know, it sells construction equipment and generators. It had a good day, too. Even Apple, which hasn't invested much in AI, gained a lot last week. Because investors believe users will eventually gain access to artificial intelligence through Apple devices. You may have heard this; one of the biggest concerns in the market is whether the stock market has become too concentrated. Only these big tech companies are rising. The rest of the stock market isn't. This is called a shortness of breath. Should we be worried about this? It was another one of last week's most talked-about topics.

Meanwhile, six of the Magnificent 7 have already released their earnings. Tesla, as you know, is one of them, and we can't see the revenue and profit growth they've seen in any other company. This group's earnings growth was 27% compared to last year. Before the earnings season began, expectations were around 15%. They've surpassed that figure many times over. Looking at the S&P 500 as a whole, they're seeing a 13% profit increase. In other words, they're doubling the S&P 500. This is why investors' money is constantly flowing to them. Expectations were quite high, but tech companies have managed to surpass the bar. Don't pay attention to Metaya; we're complaining about it. It actually had good growth, but it wasn't enough for the market. Now, all eyes are on November 19th, because that's when Nvidia's earnings will be released.

CEO Jensen Huang raised his growth expectations at an event in Washington last week. He created incredible excitement. He said he would reach $500 billion in revenue in the next six quarters. The expectation was around $380 billion. But remember, as expectations rise, so does the risk of disappointment. AMD's earnings report is coming. I'm an investor in both AMD and Nvidia, so I'm curious about both. AMD exploded after its partnership with Open AI. Its stock has continued to rise dramatically ever since. At one point this year, AMD's stock dipped to $70. AMD has surpassed the $200 mark, becoming a massive stock that has skyrocketed. Nvidia may repeat the same scenario after its earnings report on November 19th. Of course, none of this means stock markets will always rise, but what you should keep in mind is that the stock market's rise is entirely dependent on AI, and company earnings reports show us that this trend will continue.

All technology companies that have released their earnings reports have stated that they will increase their AI investments in the coming years. That's why some say, "Stay away from the AI ​​bubble," and so on. They've been saying this for years. I don't think they're fully aware of the growth potential here. Of course, what I'm saying is not investment advice. Markets are always subject to sharp corrections. But if you're a forward-looking investor, I think you should definitely consider AI somewhere in your portfolio.

The information, comments and recommendations contained herein are not within the scope of investment consultancy. Investment consultancy services are provided within the framework of the investment consultancy agreement to be signed between brokerage firms, portfolio management companies, banks that do not accept deposits and customers. The comments in this article are only my personal comments and these comments may not be appropriate for your financial situation and risk return. For this reason, investments should not be made based on the information and comments in my articles.