Why I'm avoiding Nvidia (and buying these 3 AI stocks instead) (From TradingTips)
Will the S&P 500 Rally in December? These 3 Signals Point to a Big Move Ahead Written by Thomas Hughes on November 25, 2025 
Key Points - The S&P 500 is in an uptrend; the November consolidation sets up a buying opportunity.
- Retail results, a reignited AI trade, and easing macroeconomic headwinds set the market up to rally.
- New highs may come before year-end or at the latest early 2026.
Risks remain, but the S&P 500’s (NYSEARCA: SPY) uptrend is intact. The November correction was more of a broad-market consolidation, setting the market up for another leg of the rally, likely to unfold in December. This is an examination of three major themes driving S&P 500 price action and why it's set up to advance to new highs before year-end. 
Macro-Economic Headwinds Ease Macroeconomic uncertainty has been causing significant concern among investors throughout the year. Uncertainty is linked to trade relations, tariff impacts, and, more recently, the government shutdown. The story for December is that the government shutdown is over, trade relations aren’t deteriorating, and there has been some relief regarding tariffs. Primarily, the impact of tariffs on Q3 results was far less than expected. The average S&P 500 company outperformed its consensus estimate by more than 600 basis points, which is well above average, and the Q4 season is likely to follow a similar trend. While the Q3 results outperformed, and most companies improved their guidance, the Q4 consensus forecast remained unchanged. The likely outcome is that Q4 results will outperform by a similarly large margin. Meanwhile, the FOMC remains on track to cut rates in 2026. The outlook for cuts has dimmed, but there is still an expectation of another two to three 25-basis-point cuts by next summer. The odds for a cut in December are also significantly high and may increase as the month progresses. With the government shutdown over, government-collected data is being released, and it aligns with healthy, albeit cooler, economic conditions compared to the previous year. Retail Earnings Were Good, Guidance Was Increased There were some areas of weakness in the retail sector's earnings data, but the overall trend was bullish. Most retailers grew revenue and earnings, produced solid margins, and provided favorable guidance. The takeaway is that Black Friday and Cyber Monday sales events mark the beginning of the holiday shopping season and are likely to exceed forecasts. As it stands, holiday spending is expected to increase by 3% to 3.5% with strength centered in eCommerce. Deals and value will be a driver, positioning off-price retailers and Walmart as winners. Among the critical factors for investors is that retail leaders like Walmart (NYSE: WMT) and The TJX Companies (NYSE: TJX) have solid cash flow, pay attractive dividends, and repurchase shares, sometimes aggressively. The next visible catalyst is the Q4 reporting cycle in January. Still, analysts could drive this sector higher before then with revenue, earnings, and stock price target revisions linked to Q3 results and early holiday spending data. While headlines focus on Tesla's car sales, tech analyst Jeff Brown says the real story is Tesla's role in a $25 trillion AI revolution — one that Nvidia's CEO himself has called a "multi-trillion-dollar future industry" — and he's uncovered a little-known stock 168 times smaller than Nvidia that could be positioned to ride this breakthrough. Click here now to see the full report The AI Trade Is Reignited Fears of an AI bubble bursting were laid to rest by NVIDIA's (NASDAQ: NVDA) Q3 results, which showed stronger-than-expected growth, and by subsequent news that Amazon (NASDAQ: AMZN) plans to invest up to $50 billion in AI infrastructure for U.S. government contracts. Together, these developments reinforce the durability of AI demand across both commercial and public sectors. The NVIDIA release confirms that its AI business is larger than initially thought, growing faster than anticipated, and accelerating in the second half of the year. This has it set up to outperform in the current and following quarters and to sustain strength long into the future. The S&P 500 remains on course to hit the 7,300 mark soon. The move may not occur before the year’s end, but the rebound is likely to start by then, and new highs will quickly follow. Notable technical indicators include the stochastic oscillator, which has retreated to the middle of its range, indicating a market that has rebalanced itself and has ample room to move higher. Read this article online › Read More: 
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