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Two of the three main U.S. equity indexes opened higher on Wednesday before rotation out of tech-related names resulted in a broader downturn. Skepticism about hyperscaler spending was reflected in the Dow Jones Industrial Average and the S&P 500 even before they joined the Nasdaq Composite in the red before noon as selling pressure took down more sectors and stocks.
Nvidia (NVDA, -3.8%), the leader of the AI revolution, gapped down early and was joined by all of its Magnificent 7 peers in posting losses as investors, traders and speculators continue to scrutinize capex plans and future profitability. Microsoft (MSFT, -0.06%) rolled over late and gave up a modest gain.
NVDA is now down 19.4% from its October 29 all-time high of $212.19. Indeed, Oracle (ORCL, -5.4%) sold off again after the Financial Times reported that Blue Owl Capital (OWL, -2.8%) will not back its $10 billion data center project in Michigan. Blue Owl is Oracle’s biggest data center partner.
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As LPL Financial Chief Technical Strategist Adam Turnquist writes, disappointing earnings from Oracle and Broadcom (AVGO, -4.5%) last week “dampened AI enthusiasm and raised concerns about increasing dispersion within the space.”
Utility stocks – their recent strength drawn from the ambitions of power-hungry AI hyperscalers – also ended in the red on Wednesday. NVDA did its share of damage, but Caterpillar (CAT, -4.6%) was the worst performer among the 30 Dow Jones stocks.
“The stock market is in a classic rotation period, not a correction,” observes the Bahnsen Group Chief Investment Officer David Bahnsen. “It does appear there is now real market fatigue in this singular AI infrastructure story, and the circularity issue in revenue, the rationalization of capex, and the fact that not all players can win at once, is seemingly becoming more accepted by markets.”
At the close, the Dow Jones Industrial Average was down 0.5% at 47,886 and the S&P 500 had shed 1.2% to 6,721, extending their losing streaks to four straight sessions. The tech-heavy Nasdaq Composite was off 1.8% at 22,693 and has now put up red numbers in four of the past five trading days.
Netflix drama is still unfolding
Netflix (NFLX, +0.2%) bounced early after the board of Warner Bros. Discovery (WBD, -2.4%) recommended that shareholders reject a competing offer from Paramount Skydance (PSKY, -5.4%) to buy the communication services stock.
On December 5, Netflix offered WBD shareholders $23.25 in cash plus $4.50 in NFLX stock, as well as shares in an eventual Discovery cable networks spinoff. On December 8, Paramount offered to buy WBD for $30 per share and included a $40.65 billion equity commitment.
The WBD board said the Paramount offer is not in shareholders’ best interests and noted that it “does not meet the criteria of a ‘Superior Proposal’ under the terms of WBD’s merger agreement with Netflix.” The board unanimously reiterated its recommendation that shareholders support the Netflix proposal.
This story probably has at least another chapter: “We could see bidding getting into the mid-$30s (e.g., as high as approximately $35 in total for all of WBD),” Raymond James analyst Ric Prentiss writes, “but ultimately have a hard time seeing it go above that level.”
Are these the hottest IPOs of 2025… and 2026?
Medline (MDLN, +41.4%) priced its initial public offering (IPO) at $29 per share after the closing bell on Tuesday, raising $6.26 billion and establishing a market value around $50 billion. It’s the biggest IPO of the year.
The medical-surgical products supplier re-debuted as a public company on Wednesday, with MDLN stock rising as much as 42.2% to $41.25. Medline was founded in 1966, had its first IPO in 1972 and went private again in 1977.
Rivian Automotive (RIVN, -1.5%) in 2021 and Uber Technologies (UBER, -2.2%) in 2019 are the only other IPOs in the last 10 years to raise as much as $5 billion.
MDLN was not the only IPO on the calendar today: Andersen Group (ANDG, +45.2%) raised $176 million after selling 11 million shares at $16, the top of its target range. The tax advisory firm was founded by former Arthur Andersen partners.
ANDG opened at $21 and was up as much as 50.4% to $24.07. MDLN and ANDG are the last scheduled IPOs on the 2025 calendar, though there will be more hot upcoming IPOs in 2026.
“Speaking of 2026,” Renaissance Capital CEO Bill Smith writes, “SpaceX’s valuation jumped to over $800 billion, with IPO rumors confirmed by Elon Musk.” And SpaceX could raise more than every 2025 IPO combined.
“It’s one of four companies valued above $100 billion that are preparing to go public as soon as next year,” he notes, “alongside Anthropic, OpenAI, and Databricks.”
