The market's telling two different stories right now. While Amazon just locked in a massive $38 billion cloud deal with OpenAI and pushed the S&P 500 to new highs, over 300 stocks in that same index actually fell Monday - revealing a dangerous concentration where only AI-powered giants are thriving while the broader market struggles.
The market just handed us a perfect example of how disconnected things have become. Amazon Web Services announced it's securing OpenAI as probably its biggest customer ever with a $38 billion infrastructure deal, and suddenly everyone's acting like the broader economy is booming. But dig beneath the surface, and you'll find a very different story.
More than 300 companies in the S&P 500 actually lost ground Monday, even as the index itself climbed higher. That's not a healthy market - that's a house of cards built on AI hype and a handful of tech giants. Amazon shares surged 4% to close at a record high, while Nvidia jumped 2.2% after Microsoft got approval to ship 60,400 additional A100 chips to the UAE.
The OpenAI deal is particularly telling. The ChatGPT maker is finally breaking free from its exclusive relationship with Microsoft, which had been its sole cloud provider until this year. According to CNBC's MacKenzie Sigalos, this diversification signals that OpenAI might be prepping for an IPO, trying to show "both independence and operational maturity."
But here's what's really happening: AI companies are burning through cash at unprecedented rates to secure computing power, and the only winners are the infrastructure providers. Amazon just locked in guaranteed revenue from one of the most well-funded startups in history, while everyone else fights for scraps.
The numbers tell the real story. Palantir beat earnings expectations with revenue guidance of $1.33 billion for Q4, crushing the $1.19 billion analysts expected. Yet shares still dropped 4.3% in after-hours trading because investors are getting pickier about which AI plays actually make sense.
Meanwhile, traditional sectors are getting hammered. European markets stayed flat despite auto stocks like Renault and Volkswagen showing some life. But that's not enough to offset the broader weakness across industries that don't have "AI" in their pitch decks.
