INSIGHT WEEKLY: December 7, 2025
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🌐 Markets Overview
📈 Another year of gains?
It looks as though 2025 is going to be another good year for investors. After a November retreat, AI stocks have recovered well in the last two weeks to push the markets higher, though still a few percent below the highs reached in October.
Investors are still leaning toward a Fed rate cut at next week's meeting (December 9-10).
The questions most investors are considering right now are: Will there be a year-end rally? Will there be a new year rally in early 2026?
Markets below all-time highs:
Tech Stocks Performance
Alphabet’s outperformance is due to solid earnings, and it has also pushed its custom AI chip program much further this year. Google’s TPU, or Tensor Processing Unit, is a specialised processor that Google designed to run and train neural networks.
Alphabet still buys large volumes of Nvidia GPUs for the workloads.
Meta stock has picked up in the past week after reports that Meta plans to cut up to around 30% of its metaverse budget in 2026 and trim spending at Reality Labs, the division that has already racked up more than $60-70 billion of losses since 2021. The company confirmed that it is shifting part of that budget inside Reality Labs toward AI glasses and other wearables rather than scrapping the metaverse entirely.
Nvidia shares up about 36% so far in 2025 on top of huge gains in 2023 and 2024. Investors still treat it as the cleanest single stock proxy for AI data-centre spending, supported by very strong data-centre revenue growth and management guidance that points to roughly 500 billion dollars of orders running through 2026. The cloud over the story is valuation and durability, not visible demand falling away.
Micron is the standout chip stock. The shares are up about 182% year to date after a much tougher 2023–24, as investors reprice the memory cycle around tight supply and a structural jump in demand for high-bandwidth memory in AI servers. Micron is one of only a handful of global players that can supply HBM at scale and has become a key memory partner for leading AI accelerators, with data-centre and AI memory now more than half of its revenue.
Intel has been one of the surprise winners in big chips this year. The shares are up a little over 100% year to date after a very weak 2024 and have more than doubled from their early-year lows. Intel’s “IDM 2.0” plan means going back to being both a designer and a manufacturer of chips, including making chips for other companies rather than relying only on outside foundries. It is pouring money into new factories and production techniques (labelled “18A” on its roadmap), which are meant to produce faster, more efficient chips that can compete with the current leaders.
On top of that, the U.S. government now treats Intel as a strategic asset and is backing it with CHIPS Act funding and an equity stake, while Nvidia is investing several billion dollars and working with Intel on future AI-ready PCs that combine Intel processors with Nvidia graphics.
AMD, Broadcom, ASML and TSMC have all had strong gains this year. AMD is the clearest “alternative accelerator” to Nvidia in AI servers, while Broadcom combines custom AI chips with crucial data-centre networking components. ASML sits further upstream, supplying the lithography machines that foundries need to produce the most advanced AI chips, and TSMC is the key contract manufacturer for many of the leaders in the stack, including Nvidia, AMD, and Apple. Taken together, that performance suggests investors are treating AI as a multi-year infrastructure build-out that benefits designers, equipment makers, and manufacturers across the chain, even though any slowdown in cloud capital spending or fresh export-control headlines could still trigger sharp corrections along the way.
Macro Watch: This Week’s Economic Developments
🇺🇸 United States
As the Federal Reserve approaches its December meeting, markets are leaning heavily toward a 25 basis point rate cut, with odds now at 85% following softer producer price data and dovish remarks from officials.
The picture on growth is mixed. The ISM manufacturing index stayed in contraction at 48.2 in November, while services held in modest expansion at 52.6. Private payrolls (ADP) fell by around 32,000, a sharp reversal and one of the weakest monthly readings since the post-pandemic adjustment phase. Taken together. steady core PCE but softer PMIs and hiring give the Fed room to start easing, while keeping an eye on the risk that cuts arrive into a slowing, rather than booming, economy.
🇪🇺 Europe
The Eurozone managed a 0.3% GDP uptick in Q3, paired with 0.2% employment growth, as inflation edged to 2.2% and unemployment held at 6.4% - a fragile but encouraging step forward.
The Bank of England faces a crucial call on December 18, where markets price in a 90% chance of a 25bps cut after the recent budget, driven by rising unemployment to 4.8% and cooling wage momentum.
Germany's factory orders rose a healthy 1.5% in October, and UK retail sales climbed 1.5% year-over-year, yet subdued pipelines and fiscal headwinds remind us that this recovery remains precarious
🇯🇵 Asia
Japan's household spending dipped 3.0% year-over-year in October amid lingering inflation pass-through, though a substantial ¥18.3 trillion supplementary budget offers fiscal support; the Bank of Japan's firmer tone has lifted 10-year JGB yields to 1.93% and bolstered the yen.
China’s manufacturing PMI stayed contracted at 49.2 for an eighth month, with nonmanufacturing at 49.5, as the property sector's woes - declining sales and prices - intensify deflation risks despite RMB 1 trillion in stimulus. Across the region, policy measures are proving essential to navigate domestic challenges and external trade uncertainties.
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🌐 Artificial Intelligence and Tech
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ChatGPT growth slows. From August to November, global monthly active users grew only about 5–6%, to roughly 810 million, while Google’s Gemini grew around 30% over the same period, helped by new image features.
ChatGPT’s share of global monthly active users has actually slipped a few points, and time‑spent lifted only modestly, even as rivals like Perplexity and Claude notched triple‑digit user growth this year.
Micron said it will exit the consumer memory market and retire its 29‑year‑old Crucial brand to prioritise AI data‑centre demand.
Hyperscalers running foundation models are now more important than PC builders and small businesses. The shift underlines how AI is reshaping semiconductor economics: capacity is being pulled into high‑bandwidth memory and advanced storage.
Meta has acquired Limitless, the startup formerly known as Rewind that built an AI pendant to record conversations and turn them into a searchable personal memory stream. Limitless will stop selling hardware and wind down its broader “life recorder” software, with existing customers supported for a year and given export/delete options for their data. For Meta, the appeal is obvious: it gains a team and tech that sit neatly alongside Ray‑Ban Meta and other AI‑enabled wearables, as it chases a vision of “personal superintelligence” woven into everyday glasses.
Anthropic’s CEO pushes back on the idea that AI is “just a bubble,” while also warning that parts of the market are clearly overheated. The message is nuanced: there is real long‑term value in frontier models and AI infrastructure, but also a lot of capital chasing flimsy application layers, aggressive promises, and undercooked safety practices.
Quantum computing collaboration from the UK and Germany. They are tightening their quantum and AI plans together. The deal includes £6 million of joint R&D, extra funding for applied photonics in Glasgow, and a standards agreement between NPL and PTB so quantum hardware and supercomputers can work together reliably. It also plugs straight into AI. Edinburgh’s National Supercomputing Centre will host an “AI Factory Antenna” linked to Germany’s HammerHAI site, with about £4 million to build exascale- and AI-ready software.
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🌐 Crypto Corner
Top 10 cryptos:
This week: XRP and Polkadot lag in a soft market
Year to date: Declines after 2023-24 boom
2025 has been a reset for large-cap crypto. Leaving the dollar-pegged stablecoins aside, almost every coin in this group is negative year to date.
Bitcoin, Ethereum, Solana, XRP, Cardano and Polkadot have all given back part of their huge 2023–24 gains amid a broad Q4 correction, profit-taking after earlier record highs and a shift in attention toward AI-linked tokens and tokenised real-world asset themes.
Binance Coin is the one clear bright spot in this group. That resilience reflects its continuing role at the centre of the Binance ecosystem. BNB is used for trading-fee discounts and other exchange services, and BNB Chain has been one of the most active networks for decentralised trading, gaming, and speculative tokens through 2025.
Bitcoin slipped 1.7% over the week and is about 4% lower year to date. The recent drawdown reflects a mix of profit-taking after the ETF-driven rally, weaker spot ETF flows, and forced liquidations as leveraged positions were unwound.
Polkadot price declined again this week. The network is still pushing ahead with its Polkadot 2.0 roadmap and upgrades such as elastic scaling and asynchronous backing, but the token price remains under pressure as investors focus on visible adoption metrics like users, transaction fees and DeFi activity, where Polkadot continues to lag larger ecosystems.
Cardano’s drop of around 51% in 2025 underlines how unforgiving this environment is for platforms where price has run ahead of usage, even with some recent progress in DeFi, its total value locked and activity remain modest compared with the leading chains, so it has been hit hard in the latest drawdown.
Solana remains highly sensitive to market swings. after spectacular gains in 2023–24, a near-30% fall this year reflects both the general risk-off tone and concerns about how sustainable high-speed, high-beta activity is when liquidity tightens.
Ethereum’s roughly 9% year-to-date decline sits against a backdrop of rising competition from cheaper layer-2 networks and alternative layer-1s, even though it still hosts the largest DeFi and developer base.
See the previous spotlight on Bitcoin halving
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Stay tuned for more insights and updates each week.