Stocks to Watch as AI Spending Fears Build
US markets are entering another important trading session, with investors balancing AI spending concerns, earnings announcements and uncertainty surrounding the US midterm elections.
Monday’s session ended with mixed results. The S&P 500 slipped 0.52%, while the Nasdaq fell 1.1%. Technology and AI-related shares remained under pressure, suggesting investors are becoming more selective about companies exposed to the AI investment cycle.
Here are five stocks I am watching today.
1. $Advanced Micro Devices(AMD)$ – The Biggest Earnings Test
AMD is at the top of my watchlist ahead of its earnings announcement after today’s market close.
The company has guided for approximately $13 billion in quarterly revenue and a non-GAAP gross margin of 54.5%. Investors will be looking beyond the headline numbers for updates on data-centre demand, AI accelerator shipments and its MI450 roadmap.
The key issue is whether AMD can deliver guidance strong enough to justify market expectations.
What I am watching: Data-centre growth, gross margins and forward guidance. A strong report could improve sentiment across semiconductor stocks, while cautious guidance could create further pressure.
2. $Arista Networks(ANET)$ - The AI Networking Opportunity
AI infrastructure is not just about processors. Large data centres also require high-speed networking equipment to connect thousands of computing systems.
Arista is an interesting company to watch because its networking technology supports the expansion of cloud and AI infrastructure.
Investors will be looking at revenue growth, customer demand and guidance when it reports after the close.
What I am watching: Whether AI networking demand is translating into sustainable revenue growth and whether margins remain healthy.
3. $Shopify(SHOP)$ – A Different Growth Story
I also want to watch Shopify because it offers exposure to digital commerce rather than the crowded AI infrastructure trade.
Its earnings provide an opportunity to assess whether online merchant activity, transaction volumes and payment services can continue supporting growth.
The important consideration is whether revenue growth is translating into stronger operating profitability.
What I am watching: Revenue growth, merchant solutions and forward guidance.
4. $Eaton Corp PLC(ETN)$ – The Power Infrastructure Angle
AI data centres require enormous amounts of electricity, making power management and electrical infrastructure increasingly important.
Eaton is worth watching because its electrical equipment business is positioned to benefit from investment in data centres, power distribution and grid infrastructure.
Unlike semiconductor companies, Eaton offers exposure to another part of the AI infrastructure spending cycle.
What I am watching: Electrical segment growth, order momentum and management’s outlook.
5. $NVIDIA(NVDA)$ - A Key Sentiment Indicator
Even without an earnings announcement today, Nvidia remains an important stock to monitor.
Its share-price performance can influence sentiment across the semiconductor sector because investors continue to use Nvidia as a benchmark for AI infrastructure demand.
I would watch whether Nvidia stabilises after recent weakness or whether selling pressure spreads further across chip stocks.
What I am watching: Price momentum, trading volume and whether semiconductor stocks move together or begin showing more selective performance.
My Trading Plan
I would avoid chasing the first market move today, particularly ahead of AMD’s earnings.
My preference is to watch how the market reacts to earnings expectations and whether buying interest returns to companies with strong fundamentals.
A few things I would consider:
• AMD: Watch for an opportunity after earnings rather than guessing the direction beforehand.
• ANET: Monitor whether networking stocks show relative strength compared with semiconductor companies.
• ETN: Keep an eye on the longer-term power infrastructure opportunity.
• SHOP: Look for evidence that growth is supported by improving profitability.
• NVDA: Use its performance as a broader indicator of AI-sector sentiment.
The biggest opportunity may not necessarily be the stock with the largest one-day gain. I would rather identify companies where earnings growth, cash flow and future demand support the current valuation.
With election uncertainty and several earnings catalysts in play, patience and position sizing matter.
For discussion purposes only. Not financial advice.
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