Major Bank Ratings | UBS: Reiterates "Buy" Rating for Trip.com, Expects Steady Growth Across All Business Lines This Year

The Bank of Japan kept its policy rate unchanged at 1.25% on Friday, but Governor Kazuo Ueda's remarks at the post-meeting press conference sent policy signals that are more noteworthy than the rate decision itself.

The AI spending race faces profitability scrutiny: Google’s search advertising growth rate has dropped to its lowest in five quarters, and Amazon’s single-quarter free cash flow has plunged to -$33.5 billion. Yet both companies continue with capital expenditure plans exceeding $400 billion. As their core cash-generating businesses lose momentum and debt and financing needs surge, the market is shifting from rewarding AI investment to questioning returns, forcing a re-evaluation of the valuation logic for tech giants.

Amazon's Q3 financial report presents a mixed picture: AWS order backlog soared by 189% to $578 billion, and the CEO made the rare promise that growth will exceed 40% in 2027-2028, aiming for $1 trillion in revenue within five to ten years. However, advertising business growth plunged from 26% to 12%, and capital expenditure reached $77.3 billion, far exceeding expectations, causing the stock price to fall 7% after hours. While major Wall Street banks collectively maintain their “buy” ratings, they admit that the structural risks posed by AI agents to the advertising ecosystem remain unresolved.