Well the honeymoon ended fast. The market tanked Thursday after everyone everywhere sold off tech worried the Democrat majority in the House and the Senate will somehow get Washington to pass laws and institute nationwide change.

The Nansdaq droped 6.4%, wiping out $2.3T in value. It was not just the Fed, but state governor seats and state legislators now eyeing voter hated AI data center plans. Voters rejected data center build outs directly on Tuesday across 10 states. CNBC found 41 of 42 data center ballot options failed that asked residents to decide if they wanted their power bill to go up wanted data centers in town.

The PHLX Semiconductor Index fell 12%, the biggest drop since March 2020; it was a bloodbath that spread past tech and spread to just about everywhere. Every single sector of the S&P 500 was in the red, down 4%. The VIX volatility index jumped the most since 2024, after a soft happy low Cortisal election day.

The Dow fell 4%, and small caps fell 5%. All 11 sectors finished red, Technology took the worst of it at 8% down, Communication Services held up best at less than 1% down, and the VIX jumped 50% to a seven-month high. It wasn't all bad, Krispy Kreme Donuts $DNUT ( ▲ 30.68% ) flew 30% after its earnings and the guide did well. Or because people were hitting the sugar hard to cope. 😆

After the bell, Cloudflare gave the day one growth story, up 17% after hours on its fastest revenue growth in nearly four years. The rest of the issue was defense: Qualcomm leaning on cars and data centers while phones shrink, Celsius leaning on Alani Nu while the flagship shrinks, and Wendy's leaning on a poison pill. DraftKings and Applied Optoelectronics both beat and got sold anyway, which tells you the mood.

Today's Briefing:

Cloudflare accelerated in the third quarter, turning a brutal software session into a 17% after-hours rally. Revenue growth reached its fastest pace in nearly four years, and the fourth-quarter forecast cleared the pre-release bar by almost $50M. ☁️

The RIP: $NET ( ▼ 8.28% ) fell 8% during the regular session, then jumped 17% after hours. Revenue rose 39% to $782.5M versus roughly $737M expected, while adjusted EPS of $0.38 topped roughly $0.34 expected.

The company's release guided Q4 revenue to $845M to $846M, well above the roughly $797M expected before the report. Adjusted EPS guidance of $0.43 also cleared the roughly $0.38 bar. The growth engine sped up while the rest of tech hit the brakes. 🚀

The bill was still there: Cloudflare's GAAP net loss widened to $34.1M from $1.3M, and free-cash-flow margin slipped to 10% from 13%. Holders now have a cleaner growth story, but they are still paying for expansion before the accounting profit arrives.

Qualcomm reported its fiscal fourth quarter after the bell on Wednesday, and the phone business sank the print. Handset sales fell hard, the December outlook landed soft, and the company's new data center business was not yet big enough to change the subject.

The RIP: $QCOM ( ▼ 9.49% ) fell 9% to $157 on Thursday. Adjusted EPS of $2.17 and adjusted revenue of $10.44B cleared the bar in the release, but handset revenue fell 26% to $5.14B, short of the $5.25B analysts expected.

The rest of the chip business held up better. Auto revenue jumped 89% to $1.99B and IoT rose 4% to $1.89B, while licensing slipped 7% to $1.30B. The phone is still the business, and the phone is shrinking. 📱

Qualcomm put December-quarter revenue at $10.4B to $11.2B with adjusted EPS of $2.15 to $2.35, a $2.25 midpoint under the $2.27 consensus, and no Apple revenue in the numbers. The data center debut is real money now, $650M guided for the December quarter and $5B promised for fiscal 2027, just not this quarter. TD Cowen cut its target to $185 from $200 and kept its Buy rating. 🏭

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Celsius Holdings reported third-quarter results before the open on Thursday and beat on both lines. The growth came from Alani Nu, the smaller brand it bought last year, while the flagship Celsius brand shrank again.

The RIP: $CELH ( ▼ 2.31% ) opened at $33 and faded to $30, down 2% on the day. Revenue rose 17% to a record $847.2M in the results, ahead of the $800.7M expected, and adjusted EPS of $0.41 beat the $0.31 estimate.

Alani Nu did the carrying. Its revenue jumped 24% to $410.1M on wider PepsiCo distribution and the Witch's Brew limited flavor, passing the flagship, which fell 6% to $356.8M on product cuts and a soft club channel. Rockstar added $80.3M. The acquired brand is now the bigger brand. 🧙

The mix cost margin. Gross margin fell to 46.8% from 51.3% on aluminum and fuel costs and more distributor sales, and adjusted EBITDA slipped 3% to $198.6M. Celsius also reorganized around its brands the same morning, a tell that the flagship needs its own rescue plan. 🥤

Wendy's rejected a $7.35-per-share buyout on Thursday and adopted a poison pill to keep the bidders from going around the board. The offer came from a group led by Trian, Nelson Peltz's fund, and it valued the burger chain at about $1.4B.

The RIP: $WEN ( ▲ 3.79% ) rose 3% Thursday. An independent board committee unanimously rejected the offer, disclosed in a filing, and adopted a shareholder rights plan that triggers at 15% ownership and runs to November 2027.

The group already holds 16.3% of the company, which is the point of the pill: nobody creeps higher without the board's permission. The $7.35 offer was about a 20% premium, and the committee called it inadequate in the middle of the Dave's Way turnaround. A 20% premium got a no. 🍟

The midterm sweep reached the AI buildout on Thursday, one day after the market celebrated it. Voters backed limits on data centers in state after state, Texas Governor-elect Hinojosa campaigned on a temporary data-center moratorium, and chip stocks took the year's worst beating.

Dozens of local ballot measures targeted new data centers, and the Texas result put a moratorium supporter in charge of the state building more of them than anywhere else. The market is pausing from a bubble and clearly expecting hyperscaler plans to move slower and get more expensive. Search giant Google announced a $17B build in Wyoming Thursday. 🏗️

The damage concentrated where the run had been biggest. Nvidia fell 9% and now sits nearly a quarter below its October peak. Micron fell 17% to $656, down 30% in five sessions, and AMD fell 17% to $404 after Chief Executive Lisa Su said AI chip demand is not slowing and called the market short-sighted. The stocks fell on politics while the buyers of their chips kept ordering.

Oil rose 3% and bitcoin fell 5%, a split that says this was an AI trade unwind, not a growth scare. Qualcomm's weak phone numbers and Apple's memory-cost warning gave sellers company-specific cover, but the index damage came from the buildout math. ⛽

Applied Optoelectronics sank 29% even as quarterly revenue more than doubled to $269.9M, with the fourth-quarter outlook and U.S. capacity timing keeping the beat from landing. Community is bullish.

DraftKings sank 19% after Q3 revenue reached $1.329B and management introduced 2027 sales guidance of $7.35B-$7.75B, while higher Predictions investment weighed on the setup. Community is neutral.

Rockwell Automation fell 14% after adjusted EPS of $3.88 beat estimates but revenue of $2.33B missed $2.41B expected, leaving its 6%-9% fiscal 2027 growth guide to do the repair. Community is neutral.

IonQ fell 6% after revenue jumped 336% to $173.8M and management raised its full-year outlook, as traders looked past the growth to cash burn and earnings quality. Community is neutral.

Bullish on the Fit.

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See the Drop →

📊 Wendy's rejects $1.4 billion takeover proposal from Nelson Peltz’s Trian

🧬 We're raising our price target on Cardinal Health after another stellar quarter of profits

🤖 Why Pete Hegseth could fall through "thin ice"

📰 Voters rebuff data centers in every ballot measure except one during the 2026 midterms

👀 Apple Reportedly Set To Raise $7.5B From Bond Offering Amid Market Selloff

💰 Amazon-Uber Eats Deal Sends DASH Stock To Biggest Drop In A Year

🪙 The crypto move you missed today, explained before you wake up to it

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