Yahoo Finance reported on November 5 that the Dow Jones Industrial Average tumbled 3.4%, or more than 1,800 points, while the S&P 500 fell 4.4% and the Nasdaq Composite sank 5.5% into correction territory. Chip stocks took the brunt of the damage, with AI chip designers and memory makers among the hardest hit. The slide
Yahoo Finance reported on November 5 that the Dow Jones Industrial Average tumbled 3.4%, or more than 1,800 points, while the S&P 500 fell 4.4% and the Nasdaq Composite sank 5.5% into correction territory. Chip stocks took the brunt of the damage, with AI chip designers and memory makers among the hardest hit. The slide erased the gains from a day earlier, when the Dow had jumped 3% for its best session of 2026 after Democrats won control of both chambers of Congress, Yahoo Finance wrote on November 4. By mid-session Thursday, the index was heading for its worst second day after a midterm election in data going back to 1896, the outlet noted.
The Dow’s Safe-Haven Run Cracks
For most of the week, the Dow had looked like the sheltered corner of the market. Yahoo Finance reported on November 2 that the Dow edged up 0.4% while the Nasdaq dropped roughly 1% as investors rotated out of technology names and into consumer cyclical and financial services shares, which left the Dow looking like the market’s relative winner. On Thursday, that cushion gave way, as the focus turned to what a Democratic Congress could mean for the AI buildout, and for the data centers driving it in particular. You might also be interested in reading our piece on how the AI chip leader’s growth compares with the cloud software giant’s.
The reversal was fast and violent. Shay Boloor, chief market strategist at an equity research firm, pointed out that the VIX volatility index posted its biggest one-day jump in more than two years. It took the Nasdaq just six minutes on Thursday to erase its entire post-election rally, and even Wednesday’s winners such as the iPhone maker turned lower. That Wednesday buying had been helped by falling oil prices, while the Windows maker jumped 6% to a record high.
A Jobs Report Steadies the Tape
Friday brought a partial rebound. Yahoo Finance reported on November 6 that the US added 165,000 jobs in October, and the Nasdaq gained 1.9% while the S&P 500 rose 1% and the Dow added 0.1%. For a closer look at one of the biggest AI spenders caught in the sell-off, we recently covered why the search giant’s low price-to-earnings ratio can mislead. The stronger jobs data lifted Treasury yields and kept Federal Reserve policy at the center of market attention, Reuters reported on November 6, as the price-weighted index of 30 major US companies held roughly flat.
For this article, we used Finviz to screen Dow Jones Industrial Average components for stocks rated Buy or better by analysts, with an average price target at least 10% above the current price. We then ranked them by average upside potential, based on analysts’ average price target, in ascending order. We also list short interest and the number of hedge fund holders as of Q2 2026.
Note: All data was sourced on November 6, 2026.
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Salesforce is showing that its AI products are becoming a business of their own. Agentforce annual recurring revenue topped $1.5 billion in the fiscal second quarter, up more than 240% from a year earlier, and bookings for its premium Agentforce editions more than doubled from the prior quarter.
That momentum is lifting the core. Current remaining performance obligation, a gauge of contracted revenue, grew 14% in constant currency, and the company raised its full-year revenue outlook, citing organic strength in Agentforce, Data 360 and Slack. Free cash flow rose 81% in the quarter, which shows the AI push is not coming at the expense of cash generation.
Partnerships widen the reach. Salesforce announced Claudeforce, a planned Anthropic partnership that brings Claude into its data, applications and workflows. Management also said the number of customer accounts with agents in production grew sharply from the previous quarter, a sign that adoption is moving beyond pilot projects. Slack also delivered its fastest quarterly growth in net new annual order value since Salesforce acquired it, giving the AI push a workplace channel beyond sales and service.
Alphabet’s third-quarter report put the AI payoff on display, even as it spooked investors. Google Cloud revenue more than doubled, rising 103%, while the unit’s operating margin widened to 36.2%, showing that the growth is profitable even at this scale.
A cloud backlog of $561 billion gives that growth runway, with just over half of it expected to turn into revenue over the next two years. Demand is broadening too. Chief Executive Sundar Pichai said the Gemini app has reached 1 billion users, which he called the fastest-growing product in Google’s history.
The worry is spending. Capital expenditures keep climbing, and free cash flow turned negative in the quarter, which weighed on the stock. Bulls counter that operating income still grew strongly and that the earnings miss traced to an unrealized loss on the company’s SpaceX stake, not to the core business. Search, the largest business, also kept growing, with Pichai saying AI is lifting query volume, including commercial queries. Management expects capital spending to rise significantly next year, so the bull argument rests on cloud contracts converting into revenue on schedule.
Cisco is turning AI data center spending into hard orders. Hyperscalers placed $9.3 billion of AI infrastructure orders with the company in fiscal 2026, several times the prior year’s level, and management expects those customers to generate $7.5 billion of AI infrastructure revenue in fiscal 2027.
The strength is not confined to the largest cloud buyers. Networking product orders climbed 40% in the fiscal fourth quarter, the eighth straight quarter of double-digit growth, while newer Wi-Fi 7 and security products added breadth. Chief Executive Chuck Robbins describes the period as the early stage of a networking super cycle, as customers upgrade networks for AI traffic.
Chief Financial Officer Mark Patterson called that revenue target prudent, because hyperscaler orders are large, uneven and usually placed well ahead of delivery, so the company enters the year with a sizable order book. Enterprise, public-sector and telecom orders also grew at double-digit rates, which means demand is not resting on a few buyers. Gross margin dipped as faster hardware growth changed the sales mix, but the growing order book gives Cisco room to absorb the shift.
Caterpillar has become a quiet beneficiary of the data center buildout. The company posted its highest sales quarter ever, and its backlog swelled to a record $78 billion, nearly double the level of a year earlier. Sales of power generation equipment to users jumped 75% as customers sought turbines and large engines for data centers.
Demand is running ahead of supply, which is the bullish part. Orders for large reciprocating engines now run into 2029, with turbine orders reaching 2030. Chief Executive Joe Creed said customers still want more power than the company can supply, so Caterpillar is ramping production as quickly as it can.
Profitability is holding up as volumes climb. The adjusted operating margin expanded sharply from a year earlier, and Caterpillar returned cash to shareholders through dividends and buybacks while still funding the expansion. Management said full-year sales should grow in the mid-to-high teens, supported by a record backlog and healthy end markets across construction, mining and power. Frame agreements in the pipeline convert into orders over time, which helps the company plan production beyond the current backlog.
Nvidia is still growing faster than almost any company of its size. Revenue in the fiscal second quarter more than doubled to $96.2 billion, and the company guided the fiscal third quarter to about $108.0 billion without assuming any data center compute revenue from China. That leaves the outlook free of one of the biggest geopolitical swing factors.
The next leg is Vera Rubin, which Nvidia said is ramping into full production, with racks already running at partners including CoreWeave, Google Cloud, Microsoft Azure and Oracle Cloud Infrastructure. Management also said it expects to grow revenue by about 70% in fiscal 2028 and called that outlook supply constrained. It pointed to hyperscaler capital spending reaching $1.3 trillion next year as the demand behind it.
That visibility explains the preparation. Inventory rose in preparation for the Vera Rubin launch, giving the company product ready as customers place orders, and Nvidia returned $26 billion to shareholders in the quarter through buybacks and dividends. Gross margin held steady on a similar product mix, a sign the growth is not coming at the expense of profitability.
While we acknowledge the risk and potential of NVDA as an investment, we believe certain AI infrastructure stocks offer far stronger long-term potential at a much more attractive entry point. If you are looking for an AI stock more promising than NVDA that operates as a critical AI tollbooth and stands as the most important company in the world, check out our report about this must-own AI stock.
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