Numbers Don't Lie: Quantum Computing Inc. Stock's Fall - Ouch for Investors

AI Dips, Rockets Rip: A Market Rotation?

A Tale of Two Sectors: AI Cools, Space Heats Up The market handed out a mixed bag of results on Tuesday, November 12, 2025. While the Dow Jones Industrial Average hit a new record, climbing 1.18% to 47,927.96, and the S&P 500 edged up 0.21% to 6,846.61, the Nasdaq Composite faltered, dropping 0.25% to 23,468.30. The divergence highlights a potential shift in investor sentiment, and maybe a little profit-taking. Specifically, the AI trade, which has been the darling of Wall Street for months, showed signs of cooling. Information technology stocks within the S&P 500 took a hit, declining 0.5%. CoreWeave, despite posting impressive third-quarter revenue growth of 134% (from $583.9 million a year ago), saw its shares plummet more than 16% after its forward guidance disappointed. Even Nvidia, the poster child for the AI boom, experienced a pullback of about 3% following SoftBank's sale of its entire stake. (SoftBank, it seems, is taking profits where it can find them after unloading some T-Mobile stock as well.) Micron, Oracle, and Palantir also felt the sting, declining nearly 5%, about 2%, and just over 1%, respectively. And then there's Fermi. Fermi, which went public in September at $21 a share, lost 11% after reporting a third-quarter loss of 84 cents per share—a total net loss of almost $347 million. Ouch. But amidst this AI sector stumble, there's a bright spot: Rocket Lab.

Rocket Lab: Escaping Earth and AI Valuation Concerns

Rocket Lab: Defying Gravity Rocket Lab shares jumped nearly 4% after reporting third-quarter results that exceeded expectations. The company posted a loss of 3 cents per share, significantly better than the estimated loss of 10 cents per share. Revenue for the quarter came in at $155 million, surpassing the consensus estimate of $152 million. Looking ahead, Rocket Lab projects fourth-quarter revenue between $170 million and $180 million. Rocket Lab's performance is particularly noteworthy given the broader market context. While AI stocks are facing valuation concerns and investor skepticism, Rocket Lab is soaring, with a six-month gain of over 162% and a year-to-date surge of more than 111%. This begs the question: Is this a temporary rotation, or is something more fundamental at play? The Senate’s recent passage of a bill to reopen the government, while welcome, likely had a limited impact on these specific stock movements. (The deal, funding the government through January and reversing shutdown-related layoffs, is more of a sigh of relief than a catalyst for dramatic market shifts.) One interesting detail is SoftBank's sale of Nvidia shares. Selling 32.1 million shares in October for $5.83 billion suggests a strategic shift, or at least a desire to rebalance their portfolio. Was this a smart move, or did they sell too early? Only time will tell, but it certainly put downward pressure on Nvidia's stock. Investors often dislike investment cycles, especially for smaller companies outside the trillion-dollar club, but Rocket Lab seems to be overcoming those concerns. It might be something about the tangible nature of launching rockets into space that appeals to investors in a way that AI algorithms do not. I've looked at hundreds of these filings, and the revenue forecast from Coreweave is interesting. They now expect full-year revenue to come in between $5.05 billion and $5.15 billion. They beat expectations on revenue for the third quarter, but that full-year guidance seems to have spooked investors nonetheless. The University of Michigan’s consumer sentiment index slid more than 6% in November, nearing all-time lows and down about 30% from a year ago. Respondents were concerned that the long-running federal government shutdown would drag on the economy, and that's understandable, but I suspect that there are other factors at play. Is the AI Party Over? The Technology Select Sector SPDR fund (XLK), which tracks the S&P 500 tech sector, was down roughly 1% on Tuesday, November 12, 2025. Sixteen stocks in the S&P 500 traded at new all-time highs, while only two hit new 52-week lows: Charter Communications and Chipotle Mexican Grill. (A somewhat bizarre pairing, if you ask me.) As Dow closes at record high but Nasdaq slips as investors rotate out of technology stocks: Live updates - CNBC noted, the Nasdaq's struggles on this day highlighted a rotation out of technology stocks. Michael Burry's warnings about "hyperscalers" understating depreciation expenses by estimating unrealistic chip lifecycles are worth considering. If true, this could artificially inflate earnings and lead to a reckoning down the line. This is the part of the report that I find genuinely puzzling. And it's not like there's a shortage of available workers, either. Since the beginning of 2024, job openings have outnumbered job hirings by more than 2.2 million a month, pointing to an ongoing problem with “ghost jobs” that never seem to get filled. Is This More Than Just a "Blip?" Rocket Lab's success contrasts sharply with the struggles of some AI stocks. While the AI sector faces growing valuation concerns and profit-taking, Rocket Lab is capitalizing on the growing demand for space launch services. The company's strong third-quarter results and positive outlook suggest that it is well-positioned for continued growth. But, is this market correction a sign of a broader shift away from AI hype and towards more tangible investments? Or is it simply a temporary rotation, with investors eventually returning to the AI trade? A Needed Course Correction While the AI sector still holds long-term promise, the recent market activity suggests that investors are becoming more discerning. Companies with solid fundamentals and real-world applications, like Rocket Lab, are being rewarded, while those relying on hype and inflated valuations are facing increased scrutiny. It's a needed course correction, and one that should benefit the market in the long run.