FT: Elon Grok-Blocks Fanboys, Nasdaq Gets a Midterm Shellacking, Reddit Eats a $100 Downvote

Elon: “AI will make money obsolete.”

Also Elon: “You've reached your daily limit.” 

With tomorrow's midterms looming, Donnie Politics is facing a rather uncomfortable performance review over all those promises of economic prosperity.

And the AI trade is starting to look awfully familiar.

Big promises. Historic returns Small packages. And investors voting with their wallets.

Exhibit A: Elon Musk, who just admitted Grok's operating costs were “unsustainably high relative to revenue.”

Translation: Even Space Daddy can't afford to let everyone generate unlimited AI dinosaur porn masterpieces.

Turns out, demand is fantastic until you have to pay for it.

And Monday, we got another lesson in the difference between popularity and profitability.

The Nasdaq opened with a 1.4% rally. The S&P 500 climbed 1.1%.

For a brief moment, investors appeared ready to forgive the AI industry's financial sins.

*insert Morgan Freeman voice*: It was not.

By the afternoon, the Nasdaq had surrendered its entire recovery and fallen 0.6%, while the S&P 500 slipped 0.2%.

The Dow, meanwhile, managed to escape with a 328-point gain (+0.6%) as investors rotated out of expensive tech stocks and into healthcare, consumer staples, and other defensive sectors less exposed to the AI spending frenzy.

Enter Oracle, which damped another 6% after Larry Ellison announced plans to raise an additional $20 BILLION through a combination of $10 billion in common stock and $10 billion in senior notes.

In other words: existing shareholders get diluted, the company takes on more debt, and Larry gets another f*** load of money to shovel into data centers.

Elsewhere, Reddit received the ultimate humiliation after Loop Capital downgraded the basement-dweller convention social media company from Buy to Hold, assigning shares a $100 price target.

Reddit getting downvoted by Wall Street analysts. You really can't make this stuff up.

And finally, if you were wondering how business is going for the companies keeping America's alcoholics well-hydrated…

In perhaps the most aggressive career 180 since Walter White Walter became Albuquerque's top pharmacist became a drug dealer, Anheuser-Busch CEO Brendan Whitworth is leaving the beer business at the end of November to run Equinox. 

AB InBev CEO Michel Doukeris will temporarily oversee the company's North American operations while it searches for a replacement. Shares are actually up 31% this year, better than Nvidia actually.

As for the rest of the market, gonna be interesting to see how capital allocates to midterm decisions and Apple’s earnings later tonight.

Because with last month already delivering a 5.2% beating to the Nasdaq, there's one question hanging over every AI stock on the market…

If Elon Musk can't figure out how to make money serving AI customers without limiting their usage… how exactly is everyone else supposed to?

If you read all of this, congrats for having a 10 second attention span (better than me). As always, here’s our heatmap for today.

Market Gossip

>Walmart commits $6B to up distribution center automation with Symbotic (Yahoo Finance): Another day, another step closer to Elon’s UBI (Universal Basic Income) wet dream.

>Oracle files to sell $20 billion in new stock, bonds to finance AI buildout (CNBC): “We’re done when I say we’re done.” -Ellisonburg, probably

>What caused the ratings decline at Fox News? (MSN): *glances at the $5.99 sign outside Shell* “Who’s gonna tell ‘em?”

>McDonald’s dealt legal setback as judge allows lawsuit over McRib’s ‘lack of rib meat’ to proceed (New York Post): “My opponent stood by while McDonald's sold Americans ribless McRibs.” -Political ads in West Virginia, coming soon

At the time of publishing this article, Stocks.News holds positions in McDonald’s.