Markets don't ask for much during a holiday week—just a little dovish Fed commentary and some AI drama to keep things interesting. Last week delivered both, sending U.S. stocks higher as rate cut hopes surged and Alphabet Inc. (GOOGL) crashed the $4 trillion valuation party previously reserved for just Microsoft Corp. (MSFT).

The shortened trading week saw the likelihood of a Federal Reserve rate cut at the December 10 meeting jump to nearly 90%, fueled by accommodative signals from central bank officials. Adding intrigue to the mix, speculation swirled around Fed Chairman Jerome Powell's eventual successor, with National Economic Council Director Kevin Hassett reportedly emerging as President Donald Trump's top choice.

But the real action was in tech, where Alphabet's ascent to $4 trillion came courtesy of AI optimism and fresh product launches. The boost intensified after reports suggested Meta Platforms Inc. (META) might start deploying Google's tensor processing units (TPUs)—AI chips designed to rival Nvidia Corp. (NVDA) in the data center arms race. Nvidia, meanwhile, stumbled on concerns that Meta's potential pivot to Alphabet's chips could threaten its AI infrastructure dominance.

The AI enthusiasm wasn't confined to Big Tech. Healthcare stocks caught the wave, with the Health Care Select Sector SPDR Fund (XLV) posting its strongest monthly performance since the pandemic. Auto stocks joined the party too, as General Motors Co. (GM) hit record highs, continuing what's shaping up to be one of the more impressive comeback stories in recent years.

Here's a deeper look at some of the week's most compelling bullish and bearish moves.

The Bullish Case

Alphabet Reaches New Heights on AI Chip News

Alphabet Inc. (GOOGL) shares pushed to fresh all-time highs following reports that Meta Platforms Inc. (META) is considering deploying Google's AI chips—specifically tensor processing units—in its data centers. The development positions Alphabet as a legitimate challenger to Nvidia Corp. (NVDA) in the increasingly competitive AI infrastructure market. For a company that's spent years building its own custom silicon for internal use, turning those chips into external revenue would mark a significant strategic shift—and investors are clearly on board.

Reddit Rides the Social Media Wave

Reddit, Inc. (RDDT) surged roughly 7% on Tuesday, benefiting from the same Meta-Alphabet chip news that lifted the broader social media and AI infrastructure sector. The potential deal between Meta and Google sparked bullish momentum across related names, with Reddit catching a tailwind as investors bet on the ripple effects throughout the social media ecosystem. Sometimes you don't need your own chip deal—you just need to be adjacent to one.

Zoom Beats Expectations with AI-First Approach

Zoom Communications, Inc. (ZM) delivered third-quarter revenue of $1.23 billion, edging past expectations, while adjusted earnings per share came in at $1.52, topping estimates of $1.44. Enterprise revenue climbed 6.1% year-over-year and online revenue rose 2.0%. Management highlighted strong adoption of the company's AI-first tools during the quarter and raised full-year guidance. For a company that became synonymous with pandemic-era work-from-home, demonstrating continued growth and successful AI integration represents a meaningful evolution.

Other bullish highlights from the week included Autodesk (ADSK) reporting better-than-expected Q3 results, Fluence Energy (FLNC) soaring after Q4 earnings, and Rocket Lab (RKLB) continuing its upward trajectory in after-hours trading.

The Bearish Reality Check

Nuclear Stocks Experience Brutal Selloff

The nuclear energy sector faced a harsh reckoning in November, with shares of advanced-nuclear and small-modular reactor companies plummeting. Oklo Inc. (OKLO), NuScale Power Corp. (SMR), and Nano Nuclear Energy Inc. (NNE) tumbled between 37% and 55% during the month as investors fundamentally reassessed these speculative plays.

The sharp decline reflects growing recognition that all three companies remain pre-revenue operations facing years-long regulatory approvals and construction timelines. What looked like promising AI-adjacent energy infrastructure plays during the hype cycle increasingly appears to be exactly that—hype. When macro turbulence hits and investors start demanding near-term cash flows instead of distant promises, companies without revenue tend to get hit hardest.

Novo Nordisk Punished Despite Strong Fundamentals

Novo Nordisk A/S (NVO) continues experiencing what might be described as death by a thousand headline cuts. Despite dominating the GLP-1 market with a deep pipeline, the stock has declined roughly 69% as investors overreact to news items with limited actual business impact. The company trades at approximately 18 times forward earnings while expected EPS growth hovers around 20%—a valuation disconnect that suggests the market is pricing in far worse outcomes than the fundamentals support.

Weather Dampens Burlington's Quarter

Burlington Stores, Inc. (BURL) posted Q3 sales of $2.710 billion, up about 7% year-over-year but slightly below the Street's $2.739 billion estimate. Management blamed unseasonably warm weather for depressing foot traffic and demand for outerwear following the back-to-school period, pushing comparable-store sales to just 1%. It's a reminder that even in our increasingly digital economy, some retailers remain stubbornly dependent on Mother Nature's cooperation.

Additional bearish stories from the week included cryptocurrency prices falling since last Thanksgiving (awkward dinner table conversations ahead), Capricor (CAPR) sinking after Martin Shkreli took aim at the company, and emerging questions about whether quantum computing stocks might represent the next moonshot trade after Google CEO Sundar Pichai suggested quantum technology is where AI was five years ago.

The Week Ahead

As markets head deeper into December, all eyes remain on the Federal Reserve's upcoming meeting and whether the central bank will deliver the rate cut that's now priced in with near certainty. Meanwhile, the ongoing battle for AI infrastructure supremacy between Alphabet, Nvidia, and their various partners promises to generate plenty more headlines—and stock price volatility.

The contrast between soaring mega-cap tech valuations and collapsing speculative plays underscores a market increasingly focused on separating genuine business models from compelling narratives. In an environment where rate cuts might finally materialize but economic uncertainty persists, that's probably a healthy development.