Highlights of the week: US shutdown finale, Burry vs Big Tech, SoftBank sold to Nvidia

This week saw the end of the longest government shutdown in US history. Investment gurus sounded the alarm: Michael Burry accused Big Tech of artificially inflating profits, and Mark Mobius warned of an impending correction in the AI sector. The announcement of the stake sale to Nvidia caused SoftBank's stock price to decline, reflecting market doubts about the return on large-scale AI investments. At the same time, Arkady Volozh's Nebius signed a $3 billion contract with Meta, following an agreement with Microsoft. You can read about the main events from November 10 to 14 in our review.

US President Donald Trump on the evening of November 12 signed into law a bill to fund the government, ending a 43-day shutdown that paralyzed the work of most federal agencies. The document was passed by the Republican-controlled lower house of Congress - by 222 votes to 209 - and restored funding at the same level through January 30, 2026. As a result, Congress was given additional time to prepare a full budget for the current fiscal year, which began Oct. 1.

The temporary package covers the Department of Agriculture, the Food and Drug Administration (FDA), the Department of Veterans Affairs, military construction projects, and Congress itself, while funding for the remaining agencies has yet to be reconciled.

The law also prohibited the White House from conducting mass layoffs of federal agency employees until Jan. 30 and guaranteed that employees the administration tried to fire during the suspension would be reinstated. At the same time, the document does not impose new restrictions on the president - Trump still retains the ability to unilaterally restrain or reallocate funds approved by Congress, which leaves open questions of future budget disputes.

What else is there to read?

- The repeal of the shutdown is one of the key factors that shapes the portfolio in November, says Alexander Orlov of Arbat Capital. He proposed a strategy that takes into account both market expectations and fundamental results of companies - in the article "Where to Invest $10,000 in November: Between America and China".

Warren Buffett has issued a farewell address, ending his 60-year run at the helm of Berkshire Hathaway. Within two months, he will hand over the powers of CEO Greg Abel and will remain chairman of the company's board of directors. In his farewell letter, he talked about the role of luck in his own life, from being saved as a child and having warm relationships with his family and teachers to the place and time of his birth. He noted that he survived thanks to attentive doctors, built his career through a rare coincidence and lived to be 95 years old thanks to a "ridiculously long straw," the fallout of which he considers pure luck. Buffett also noted the unfairness of luck, emphasizing that many people are born into far worse circumstances.

The famous investor said that he feels good and still works in the office, thinks clearly and enjoys doing things, although there are fewer ideas because of Berkshire's size. He emphasized that he will retain a significant amount of Berkshire Class A shares until shareholders feel the same confidence in Greg Abel as Buffett himself.

He expects the company to continue to grow at a moderate pace, avoiding catastrophe, although investors should be prepared for volatility in the stock. Buffett said he will no longer write annual reports or speak at meetings - those duties will be taken over by Abel - and he will continue to address shareholders only in annual Thanksgiving letters.

What else is there to read about it?

- Journalist Anna Krasnova collected five main tips for investors from Warren Buffett's last letter as CEO of Berkshire Hathaway in the article "It's never too late to get better: Buffett's five tips from his farewell letter".

Investor Michael Burry, known for predicting the 2008 crisis, said hyperscalers including Meta, Oracle, Alphabet, Amazon and Microsoft may have artificially inflated profits by extending the "useful life" of Nvidia servers and chips. Thus, stretching depreciation lowers paper costs and boosts reported profits. Burry estimates that by 2028, Oracle and Meta could show profits overstated by 26.9% and 20.8%, respectively.

Burry emphasized that companies have been systematically lengthening asset lives in reporting since 2020. He intends to provide more complete information on November 25.

The publication of his analysis coincided with the fall of Big Tech shares. Thus, after Meta Platforms published its quarterly report in late October, the company's securities fell by 20% and became the worst stock of the "Magnificent Seven," while other companies were also declining - amid rising capex and fears of overheating in the AI sector. Burry had previously opened short positions on Nvidia and Palantir, pointing to the risk of a bubble, and published charts on slowing cloud revenues. His comments heightened alarm in a market where there were already warnings of a possible correction.

Investor Mark Mobius said that the artificial intelligence market is in an overheated zone: companies are investing trillions in data centers and equipment, although the real return on these investments has not yet been confirmed. He believes that the gap between expectations and profits has become too large and may lead to a 30-40% correction in AI companies' shares, which, however, will open up new opportunities for long-term players.

"If you look at this segment, there's too much froth," Mobius said. - Companies are spending trillions of dollars on AI infrastructure, and those numbers are just exorbitant."

In parallel, Mobius noted changes in China - policy easing, improved relations with the US and growing technological self-sufficiency. This could lead to a revaluation of Chinese assets in the next year or two, the investor believes. Global supply chain realignment is forming a new growth axis in Asia, with Malaysia, Thailand, Taiwan, Korea and India benefiting from manufacturing relocation and export expansion, although investment in India remains difficult due to bureaucracy. Mobius says the region is being helped by a stronger dollar and possible rate cuts by Asian central banks, but the key factor remains the U.S. market: its decline will inevitably affect all others.

Nebius has signed a five-year, $3 billion contract with Meta to provide AI infrastructure. This is Nebius' second major agreement after its $17.4 billion deal with Microsoft. The necessary infrastructure for the project with Meta will be deployed within three months. However, demand was so high that the scope of the contract had to be limited to the company's available capacity, Nebius said.

On Nov. 11, the company reported third-quarter revenue growth of 355% to $146.1 million, 7% below analysts' average forecast, Bloomberg noted.

According to Nebius' forecast, ARR (annualized run-rate revenue) may reach $7 billion - $9 billion by 2026. Arkady Volozh, the head of the company, stressed that the only limitation to growth is the speed of commissioning new capacities, in which Nebius continues to actively invest.

The company also announced plans to launch a market offering program (ATM, at-the-market) of up to 25 million securities to raise capital flexibly, minimizing dilution of shareholder stakes. Following the report, Nebius shares rose on the premarket, with analysts noting strong business prospects, with most recommending buying the stock.

Japanese corporation SoftBank has come under market pressure after it became known about the sale of its stake in Nvidia for $5.8 billion. SoftBank's quotations collapsed at the opening of trading in Tokyo on November 12 by 10%: the news only added to the anxiety of investors who already doubted the prospects of large-scale investments of Meta, Google and other players in AI.

SoftBank executives emphasized that the sale is not related to Nvidia's fundamental valuations, but is driven by the need to raise capital for future projects, including a planned $22.5 billion investment in OpenAI and the $6.5 billion purchase of Ampere.

Analysts believe that the volatility of SoftBank shares will remain, but expect growth of net asset value and improvement of investors' attitude. After a sharp fall, the quotes have partially recovered - at the end of the trading session on November 12, they lost 3.5%, and most experts on Wall Street recommend buying the securities. The sale of the stake in Nvidia does not change SoftBank's strategic orientation: the holding continues to actively invest in promising AI projects, including ByteDance and Perplexity AI.

This article was AI-translated and verified by a human editor