Retrospective: Week of 1/6-1/10

Despite ending the week in negative territory, Accenture displayed resilience compared to many of its technology peers, who struggled even before Friday due to rising bond yields. Accenture’s future appears promising as it continues to secure strategic partnerships, particularly in the AI space, positioning itself as a go-to resource for organizations seeking expertise and CYA in their AI initiatives. From a technical standpoint, the stock appears to be holding key support levels. Additionally, investors should note the upcoming dividend distribution on January 16.

The concerns highlighted in recent equity research reports are substantial and hard to ignore. The lack of market excitement around AMD’s Instinct MI325X—a direct competitor to NVIDIA’s Blackwell GPU—raises doubts about AMD’s competitive positioning in the AI space. Although custom AI chip solutions from ARM, Google, and Amazon present added competition, this threat appears less pressing as these specialized products primarily target large enterprises that typically favor NVIDIA’s offerings. While a recovery in PC sales is anticipated, investors are likely to remain cautious until clear evidence of improvement emerges. In the near term, further downside risk seems likely, particularly given the ongoing weakness in NVIDIA, the industry’s dominant leader.

The positive news may take time to fully resonate with the market, especially given the broader macroeconomic pressures that continue to weigh on the stock’s performance. These macro factors are likely to remain a headwind until the next major catalyst, such as Dell’s upcoming earnings or other significant developments. Technically, there appears to be strong support at the current level, but upcoming inflation data and bank earnings next week will need to ease concerns around inflation and potential earnings compression.

While a potential TikTok ban may offer short-term advantages for competitors like Meta (NASDAQ:META), it could pose long-term risks for global companies. If the U.S. moves forward with banning foreign apps, other countries might adopt similar practices, threatening Meta’s international operations. A more effective approach would be for U.S. regulatory agencies to monitor platforms and impose strict, costly penalties for policy violations, similar to how the EU handles Big Tech. Additionally, the policy changes announced by CEO Mark Zuckerberg raise significant concerns. The elimination of fact-checking, relocation of trust and safety teams to Texas, and the dismantling of DEI programs represent a stark departure from Meta’s established corporate culture. These moves could lead to internal discord, employee attrition, and even user backlash, potentially sparking renewed boycotts. If the shift was just in content moderation, it could be viewed as a strategic decision to mitigate legal risks by distributing moderation responsibility. However, the accompanying changes suggest a pivot aligned with the political climate under a conservative Trump administration. This shift could have long-term implications for Meta’s internal stability and public perception, ultimately altering its investment thesis.

The unveiling of major initiatives like Project Digits—a personal AI supercomputer for developers—an alliance with Toyota, and the Cosmos robotics platform, which Jensen Huang described as having multi-trillion-dollar potential, further reinforced NVIDIA’s long-term investment thesis. While macroeconomic headwinds pushed the stock back to prior support levels, NVIDIA remains a high-conviction investment for 2025. This period of near-term pressure appears to be an opportunity to accumulate shares rather than be deterred, given the company’s dominant market position, expansive growth potential, and exceptional leadership under Huang.