Category: 3. Business

By Emily Bary

With 10%-plus drops off their recent closing highs, Amazon and Nvidia shares have joined Tesla shares in correction territory. Meta’s stock is already in a bear market.

Amazon’s stock is now off more than 12% from its recent closing high.

Shares of Amazon and Nvidia entered correction territory on Tuesday as the technology sector’s selloff intensified.

The recent pressure on Amazon’s stock (AMZN) means it has essentially wiped out all the gains it saw following the company’s third-quarter earnings report. Those earnings originally seemed to change the tune around the stock, solidifying the company as one that’s benefiting from artificial intelligence.

And while that may still be true, Wall Street seems less preoccupied with finding AI winners given increased scrutiny of the cost of the technological buildout. Amazon recently completed a $15 billion debt deal, partly to finance its AI ambitions.

Read: As Amazon raises $15 billion in a bond deal, investors worry about companies taking on too much AI debt

Meanwhile, the selloff in Nvidia shares (NVDA) comes as that company prepares to report earnings on Wednesday afternoon.

“Numbers and expectations are very well telegraphed,” said Jeffrey Favuzza, a tech, media and telecommunications strategist with Jefferies. But there’s still “a lot of excitement” around Nvidia, he added, while predicting a “buy-the-dip mentality,” as earnings could prove to be a clearing event for the market.

Other Big Tech stocks have swiftly fallen out of favor as well. Tesla’s stock (TSLA) is already in a correction, which is defined as a drop of 10% or more from a recent closing high. And since Nov. 4, Meta’s stock (META) has been in bear-market territory, which is categorized as a 20%-plus decline off recent closing highs.

See also: The lone bear on Meta’s stock foresaw its struggles – and sees more trouble ahead

Looking outside the group of megacap tech stocks known as the Magnificent Seven, shares of Broadcom (AVGO) and Advanced Micro Devices (AMD) entered corrections earlier in November, while Oracle’s stock (ORCL) has been in a bear market since Oct. 30. It closed Tuesday at 33% off its recent highs.

Oracle shares have given back all the massive gains they saw after the cloud company’s last earnings report, when it disclosed 359% growth in its remaining performance obligations, a measure of business that has been contracted but not yet recognized as revenue.

“Basically that entire RPO backlog that OpenAI gave them and committed to is now completely out of the stock,” Favuzza said.

Apple (AAPL) and Alphabet (GOOG) (GOOGL) shares have held up better, both off less than 3% from their recent highs. Apple has been more disciplined than the other Big Tech players when it comes to AI spending, so it’s not subject to the same investor worries about the cost of AI financing. And Alphabet is “still the most crowded long on a tactical basis” within the Magnificent Seven, according to Favuzza.

“They seem to be firing on all cylinders from the product-innovation side now that there’s a little bit less concern on the antitrust side,” he told MarketWatch. A judge in September declined to issue steep penalties in a monopoly case that could have forced the divestiture of Chrome.

More from MarketWatch: Google’s Gemini 3 is finally here. Can it power Alphabet’s stock even higher?

-Emily Bary

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After years of sustained growth, the technology services sector is under pressure. Average industry growth has slowed to about 2% to 3% (compared with 4% to 5% growth before Covid-19), margins have fallen by more than 200 basis points, and valuations have reverted to pre–Covid-19 levels.

AI and its productivity benefits may be the most visible disrupters, but other forces are also reshaping the industry:

• Technology is becoming a core function of every business, as evidenced by the greater investments that many multinationals are making in their own global capability centers.
• Economic nationalism and the rise of a post-global trade system create uncertainties (particularly regarding tariffs) that increase pressure on spending and dampen demand for tech services. The trend also brings fresh challenges for hiring foreign labor in the IT industry, disrupting supply dynamics.
• Demographic shifts are reshaping the talent pool as populations age in major economies such as Europe and Japan. Rising job protection may make it harder to shift work to tech service firms, while mounting healthcare and insurance payouts will add cost pressures and squeeze discretionary spending.
• The global energy transition will increase cost pressures on sectors such as oil and gas and manufacturing as they invest capex into new forms of energy. In these and other industries, the need to redesign processes will put pressure on spending.

The competitive landscape is also shifting: In addition to other tech service competitors, AI platforms such as OpenAI and Palantir are eroding traditional services, and hyperscalers are developing platform- and application-level services that compete directly with tech services.

These trends pose real risks to the tech services industry. Bain’s research suggests that continuing to operate with a business-as-usual approach could erode revenue by 30% or more as work gets automated or replaced by AI. Firms stand to lose 5 to 7 points of EBIT margin from deal discounting to win more work, which could contribute to an enterprise value loss of 45% to 50% over the next five years.

But these trends also create new opportunities—more than enough to offset the risks:

• AI is at the heart of many of these changes, and the process of integrating AI into existing workflows will create a surge in demand for AI services.
• At the same time, the rising importance of tech across every aspect of the enterprise extends the range of activities that will require tech services.
• All of these trends create an immediate and midterm demand for tech services to help organizations adapt to changing conditions.

The next generation of IT service leaders will pull away fast (see Figure 1). Bain’s research estimates that leaders are poised to grow by 8% to 10%, sustain or expand margins, and increase revenue multiples by 3 to 3.5 times. These spoils will go to service providers that can decisively transform their organizations by reshaping their offerings, delivery models, P&L structures, and operating systems.

Forces shaping tech services

The trends reshaping the IT services industry are leading to a rethink of how these firms operate and where growth will come from.

Trillion-dollar AI economy:

• AI is no longer an add-on; it’s becoming a core capability across enterprise and software-as-a-service platforms. As industrial strength multimodal models (e.g., large language models and small language models) gain traction, demand is rising for high-quality annotation, validation, and data ops capabilities.
• Another enormous opportunity is that the modernization of apps still running Cobol—all 200 billion to 800 billion lines of active code—is less time consuming and more feasible with help from AI, which can identify the business logic in old code and translate it into more modern languages. This creates new opportunities for core modernization in industries such as banking.
• AI is also moving to the edge, enabling low-latency inferencing and smarter controllers. All of this is fueling unrelenting data center growth, including critical investments in underlying technologies such as communications infrastructure, power, and cooling.
• A surge in demand for application-specific chips to power AI applications will create new opportunities for tech services in chip design, verification and validation, and packaging.

Tech at the core of every business:

• Business process transformation is becoming faster, thanks to AI-first models that go beyond automation and redesign processes (e.g., mortgages and claims) from the ground up. Transforming processes and avoiding pilot overkill is critical for enterprises to see returns from AI.
• End-to-end transformation is also being reshaped with AI-enabled platform services that allow for more standardized and repeatable outputs. Agentic systems are coming online, which will allow these to run more autonomously.
• Across industries and product categories, customers are seeking out greater convenience and features. For example, in the automotive industry, as vehicles advance from partially to fully autonomous (advanced driver assistance systems level 3 to 5), tech services firms will play a role in enabling those features.
• Underpinning all of these and other opportunities is data—modernized, productized, and made AI-ready—the management of which is likely to become a large area of spending in tech services.

Post-globalization and expanding role of governments:

• A massive reconfiguration of spending patterns and innovation hubs is underway. Supply chains are becoming more intelligent, agile, and transparent, supported by embedded decision making that allows systems to make choices without waiting on human intervention. This creates the opportunity for more spending across the various steps of the supply chain (planning, sourcing, manufacturing, fulfillment) that tech services companies could tap into.
• Across the globe, governments are developing policies that create more secure and predictable environments for digital assets such as cryptocurrency and stablecoins, encouraging the adoption of blockchain. New centers of investment are opening up, including Japan and the Middle East.
• Countering the trend for moving operations back onshore, an increase in offshoring and nearshoring is also possible due to the rising costs of H-1B visas.

Demographic shifts upend traditional talent pools:

• There is a rising need for drastic efficiency gains to address the emerging global workforce imbalance in aging economies such as Japan and Europe.
• There is an increase of robots and agents in physical and digital environments.

Energy transition and surge in green infrastructure:

• Powering the AI transformation requires extensive changes to the energy infrastructure.
• Interest in nuclear energy is picking up again, particularly to meet the needs of hyperscale data centers.
• At the same time, green energy continues to gain momentum, with massive investments flowing into grid modernization and next-generation storage technologies.

Eight imperatives for success in IT services

While the opportunities ahead are enormous, tech service providers won’t capture them with a business-as-usual mindset. The sector is likely to keep shifting toward winners-take-most dynamics, fueled by the heavy investments required to master AI and reimagine business models. For firms that commit to the right bets and move decisively, the payoff can be far greater (see Figure 2).

Strategy shift: Gone are the days of defining strategy at a vertical and geographic level based on attractiveness and ability to win. Strategy today needs to take a more focused approach, identifying opportunities at the intersection of specific industries, geographies, and spending themes. This approach, which we call “micro-battles,” unlocks AI-led transformations with hyper-specialized expertise accompanied by broad-based horizontal technology capabilities. Transforming the mortgage origination process in US banking offers one good example. Tech service companies should identify 15 to 20 micro-battles in which they aspire to be a top player in that niche.

Multiservice solutions: To succeed in the market, companies need to bring together offerings that span multiple areas of the business, not just one team or capability. These solutions should be tailored to tackle specific high-priority challenges—for instance, the micro-battles referenced above. That means combining expertise in areas such as service design, technology, industry knowledge, data, and operations. To really make it work, companies have to be strategic about where they invest money and how they deploy talent. For example, delivering on claims process transformation in property and casualty insurance in the US means bringing together service design to redesign the claims process with the best of AI and automation, platform partnerships with core systems (e.g., insurance tech providers Guidewire or Duck Creek), custom app development, and next-generation operations embedded with AI to be able to stitch together an outcome for the client.

Revamped go-to-market model: The limiting factor in change will be how the front line adapts. AI-led services call for fundamentally different customer conversations and delivery motions that will require not just investments in offerings and partnerships but also new skills for the front line. Resetting the go-to-market model entails new roles for the front line as customer advisers and experts, new capabilities for risk management and developing more complex solutions, and deep integration with technology ecosystem partners. As in all transformations that introduce new processes, a continuous loop of frontline learning and feedback is essential.

Platform-based delivery and value-based pricing: Agents with a human in the loop are rapidly becoming part of the delivery model, helping teams shift from custom, one-off solutions to more scalable, composable, and interoperable platforms. For example, custom app development has relied heavily on individual skills and lacked a consistent way to efficiently measure progress. Now, providers are moving toward a more unified view of the software development life cycle, using platforms to improve speed, efficiency, and clarity around outcomes. Similarly, modernization efforts are becoming more automated. Instead of relying on manual effort and institutional memory to understand legacy systems, AI can generate knowledge graphs and automate much of the work. These platform-based delivery models will help shift pricing away from hourly metrics to value-based models in which customers reward providers for achieving target outcomes.

Talent strategy: As automation absorbs tasks, as companies localize talent (e.g., to keep pace with changing visa requirements), and as employee expectations change, talent strategy needs to evolve. Without a reimagined talent model, the traditional delivery pyramid could morph into a costlier diamond structure. To stay ahead, companies must rethink their talent strategy—building competency-based career architectures, extending these frameworks to clients, and investing in developing capabilities that go beyond technology, such as creative problem-solving, domain expertise, and forward-deployed engineering. Equally critical is redefining the employee value proposition to create a more geographically and culturally diverse workforce and to appeal to Gen Z workers. Incremental tweaks to HR models won’t suffice; firms must irreverently challenge outdated policies, rigid career paths, and traditional approaches to coaching, replacing them with more flexible, purpose-driven, and individualized talent experiences.

Culture reset: Responding to this moment and capturing the opportunities calls for a major cultural shift. As both customer demand and talent supply fluctuate, tech services need to respond by moving from homogenous teams to diverse talent across skills, backgrounds, and cultures. From rigid hierarchies to flatter, faster teams. From layers of oversight to more hands-on doers. From siloed functions to agile, cross-functional collaboration. From command-and-control to empowered frontline decision making. And from a people-first mindset to a tech-first stance—not just for customers but within the organization.

Partnership: Successful providers will offer a differentiated proposition to partners, working together to align offerings, create joint account plans, and invest together in IP. Partners are willing to invest if service providers bring in a repeatable approach to process transformation.

M&A: Leading tech service firms will take advantage of M&A opportunities to differentiate themselves and their offerings, particularly in areas that allow them to leapfrog competitors in the race to realize value from AI, such as data management and other AI platforms. Accordingly, developing acquisition and integration excellence is a nonnegotiable.

To fund all eight of these imperatives, tech service companies will need to become leaner, focusing investments on the muscle of the organization. Better delivery comes through improving margins of fixed-price projects, and better operations result from taking a zero-based approach to deploying AI across all internal functions, including talent, HR, finance, procurement, and so on, to free up 200 to 300 basis points of margin.

Resetting tech services

The tech services industry is at a turning point. Growth has slowed, margins are under pressure, and new players—especially AI-native ones—are shaking up the competitive landscape. And it’s not just about AI. Global structural shifts such as economic nationalism, aging workforce populations, and energy transition are reshaping demand and talent dynamics and changing how and where value gets created.

The risks are real: Bain’s research shows that firms that continue with business as usual risk major value erosion—as much as 50%—but those that act boldly can capture outsized gains. The next wave of winners could grow twice as fast as the market by redefining strategy, modernizing delivery, and reinventing talent strategy. For tech service firms, the moment of transformation is now.

DUBLIN, Nov. 18, 2025 /PRNewswire/ — Jazz Pharmaceuticals plc (Nasdaq: JAZZ) today announced that the Company will participate in Citi’s 2025 Global Healthcare Conference. Company management will participate in a fireside chat on Tuesday, December 2, 2025, at 6:45 a.m. PST / 9:45 a.m. EST / 2:45 p.m. GMT.

An audio webcast of the fireside chat will be available via the Investors section of the Jazz Pharmaceuticals website at https://investor.jazzpharma.com/investors/events-presentations. A replay of the webcast will be archived on the website for 30 days.

 About Jazz Pharmaceuticals
 

Jazz Pharmaceuticals plc (Nasdaq: JAZZ) is a global biopharma company whose purpose is to innovate to transform the lives of patients and their families. We are dedicated to developing life-changing medicines for people with serious diseases — often with limited or no therapeutic options. We have a diverse portfolio of marketed medicines, including leading therapies for sleep disorders and epilepsy, and a growing portfolio of cancer treatments. Our patient-focused and science-driven approach powers pioneering research and development advancements across our robust pipeline of innovative therapeutics in oncology and neuroscience. Jazz is headquartered in Dublin, Ireland with research and development laboratories, manufacturing facilities and employees in multiple countries committed to serving patients worldwide. Please visit www.jazzpharmaceuticals.com for more information.

Contacts:

 Investors: Jack SpinksExecutive Director, Investor Relations
Jazz Pharmaceuticals plc
InvestorInfo@jazzpharma.com
Ireland +353 1 634 3211
U.S. +1 650 496 2717

Media:
Kristin BhavnaniHead of Global Corporate Communications
Jazz Pharmaceuticals plc
CorporateAffairsMediaInfo@jazzpharma.com
Ireland +353 1 637 2141
U.S. +1 215 867 4948

View original content to download multimedia:https://www.prnewswire.com/news-releases/jazz-pharmaceuticals-to-participate-in-citis-2025-global-healthcare-conference-302619149.html

SOURCE Jazz Pharmaceuticals plc

Serena Tang: Welcome to Thoughts on the Market. I’m Serena Tang, Morgan Stanley’s Chief Global Cross-Asset Strategist.

 

Seth Carpenter: And I’m Seth Carpenter, Morgan Stanley’s Global Chief Economist.

 

Serena Tang: So today and tomorrow, a two-part conversation on Morgan Stanley’s year ahead outlook. Today, we’ll focus on the all-important macroeconomic backdrop. And tomorrow, we’ll be back with our views on investing across asset classes and markets.

 

Serena Tang: It’s Monday, November 17th at 10am in New York.

 

So, Seth, 2025 has been a year of transition. Global growth slowed under the weight of tariffs and policy uncertainty. Yet resilience in consumer spending and AI driven investments kept recession fears at bay. Your team has published its economic outlook for 2026. So, what’s your view on global growth for the year ahead?

 

Seth Carpenter: We really think next year is going to be the global economy slowing down a little bit more just like it did this year, settling into a slower growth rate. But at the same time, we think inflation is going to keep drifting down in most of the world. Now that anodyne view, though, masks some heterogeneity around the world; and importantly, some real uncertainty about different ways things could possibly go.

 

Here in the U.S., we think there is more slowing to come in the near term, especially the fourth quarter of this year and the beginning of next year. But once the economy works its way through the tariffs, maybe some of the lagged effects of monetary policy, we’ll start to see things pick up a bit in the second half of the year.

 

China’s a different story. We see the really tepid growth there pushed down by the deflationary spiral they’ve been in. We think that continues for next year, and so they’re probably not quite going to get to their 5 percent growth target. And in Europe, there’s this push and pull of fiscal policy across the continent. There’s a central bank that thinks they’ve achieved their job in terms of inflation, but overall, we think growth there is, kind of, unremarkable, a little bit over 1 percent. Not bad, but nothing to write home about at all.

 

So that’s where we think things are going in general. But I have to say next year, may well be a year for surprises.

 

Serena Tang: Right. So where do you see the biggest drivers of global growth in 2026, and what are some of the key downside risks?

 

Seth Carpenter: That’s a great question. I really do think that the U.S. is going to be a real key driver of the story here. And in fact – and maybe we’ll talk about this later – if we’re wrong, there’s some upside scenarios, there’s some downside scenarios. But most of them around the world are going to come from the U.S.

 

Two things are going on right now in the U.S. We’ve had strong spending data. We’ve also had very, very weak employment data. That usually doesn’t last for very long. And so that’s why we think in the near term there’s some slowdown in the U.S. and then over time things recover. We could be wrong in either direction.

 

And so, if we’re wrong and the labor market sending the real signal, then the downside risk to the U.S. economy – and by extension the global economy – really is a recession in the U.S. Now, given the starting point, given how low unemployment is, given the spending businesses are doing for AI, if we did get that recession, it would be mild.

 

On the other hand, like I said, spending is strong. Business spending, especially CapEx for AI; household spending, especially at the top end of the income distribution where wealth is rising from stocks, where the liability side of the balance sheet is insulated with fixed rate mortgages. That spending could just stay strong, and we might see this upside surprise where the spending really dominates the scene. And again, that would spill over for the rest of the world.

 

What I don’t see is a lot of reason to suspect that you’re going to get a big breakout next year to the upside or the downside from either Europe or China, relative to our baseline scenarios. It could happen, but I really think most of the story is going to be driven in the U.S.

 

Serena Tang: So, Seth, markets have been focused on the Fed, as it should. What is the likely path in 2026 and how are you thinking about central bank policy in general in other regions?

 

Seth Carpenter: Absolutely. The Fed is always of central importance to most people in markets. Our view – and the market’s view, I have to say, has been evolving here. Our view is that the Fed’s actually got a few more rate cuts to get through, and that by the time we get to the middle of next year, the middle of 2026, they’re going to have their policy rate down just a little bit above 3 percent. So roughly where the committee thinks neutral is.

 

Why do we think that? I think the slowing in the labor market that we talked about before, we think there’s something kind of durable there. And now that the government shutdown has ended and we’re going to start to get regular data prints again, we think the data are going to show that job creation has been below 50,000 per month on average, and maybe even a few of them are going to get to be negative over the next several months. In that situation, we think the Fed’s going to get more inclination to guard against further deterioration in the labor market by keeping cutting rates and making sure that the central bank is not putting any restraint on the economy.

 

That’s similar, I would say, to a lot of other developed markets’ central banks. But the tension for the ECB, for example, is that President Lagarde has said she thinks; she thinks the disinflationary process is over. She thinks sitting at 2 percent for the policy rate, which the ECB thinks of as neutral, then that’s the right place for them to be.

 

Our take though is that the data are going to push them in a different direction. We think there is clearly growth in Europe, but we think it’s tepid. And as a result, the disinflationary process has really still got some more room to run and that inflation will undershoot their 2 percent target, and as a result, the ECB is probably going to cut again. And in our view, down to about 1.5 percent.

 

Big difference is in Japan. Japan is the developed market central bank that’s hiking. Now, when does that happen? Our best guess is next month in December at the policy meeting. We’ve seen this shift towards reflation. It hasn’t been smooth, hasn’t been perfectly linear. But the BoJ looks like they’re set to raise rates again in December. But the path for inflation is going to be a bit rocky, and so, they’re probably on hold for most of 2026. But we do think eventually, maybe not till 2027, they get back to hiking again – so that Governor Ueda can get the policy rate back close to neutral before he steps down.

 

Serena Tang: So, one of the main investor debates is on AI. Whether it’s CapEx, productivity, the future of work. How is that factoring into your team’s view on growth and inflation for the next year?

 

Seth Carpenter: Yeah, I mean that is absolutely a key question that we get all the time from investors around the world. When I think about AI and how it’s affecting the economy, I think about the demand side of the economy, and that’s where you think about this CapEx spending – building data centers, buying semiconductors, that sort of thing. That’s demand in the economy. It’s using up current resources in the economy, and it’s got to be somewhat inflationary. It’s part of what has kept the U.S. economy buoyant and resilient this year – is that CapEx spending.

 

Now you also mentioned productivity, and for me, that’s on the supply side of the economy. That’s after the technology is in place. After firms have started to adopt the technology, they’re able to produce either the same amount with fewer workers, or they’re able to produce more with the same amount of workers. Either way, that’s what productivity means, and it’s on the supply side. It can mean faster growth and less inflation.

 

I think where we are for 2026, and it’s important that we focus it on the near term, is the demand side is much more important than the supply side. So, we think growth continues. It’s supported by this business investment spending. But we still think inflation ends 2026, notably above the Fed’s inflation target. And it’s going to make five, five and a half years that we’ve been above target. Productivity should kick in. And we’ve written down something close to a quarter percentage point of extra productivity growth for 2026, but not enough to really be super disinflationary. We think that builds over time, probably takes a couple of years.

 

And for example, if we think about some of the announcements about these data centers that are being built, where they’re really going to unleash the potential of AI, those aren’t going to be completed for a couple of years anyway. So, I think for now, AI is dominating the demand side of the economy. Over the next few years, it’s going to be a real boost to the supply side of the economy.

 

Serena Tang: So that makes a lot of sense to me, Seth. But can you put those into numbers?

 

Seth Carpenter: Sure, Serena totally. In numbers, that’s about 3 percent growth. A little bit more than that for global GDP growth on like a Q4-over-Q4 basis. But for the U.S. in particular, we’ve got about 1.75 percent. So that’s not appreciably different from what we’re looking for this year in 2025.

 

But the number really, kind of, masks the evolution over time. We think the front part of the year is going to be much weaker. And only once we get into the second half of next year will things start to pick up. That said, compared to where we were when we did the midyear outlook, it’s actually a notable upgrade. We’ve taken real signal from the fact that business spending, household spending have both been stronger than we think. And we’ve tried to add in just a little bit more in terms of productivity growth from AI. Layer on top of that, the Fed who’s been clearly willing to start to ease interest rates sooner than we thought at the time of the mid-year outlook – all comes together for a little bit better outlook for growth for 2026 in the U.S.

 

Serena Tang: Seth thanks so much for taking the time to talk.

 

Seth Carpenter: Serena, it is always my pleasure to get to talk to you.

 

Serena Tang: And thanks for listening. Please be sure to tune into the second half of our conversation tomorrow to hear how we’re thinking about investment strategy in the year ahead. If you enjoy Thoughts on the Market, please leave us a review wherever you listen and share the podcast with a friend or colleague today. 

More than $1tn (£760bn) has been wiped off the value of the cryptocurrency market in the past six weeks amid fears of a tech bubble and fading expectations for a US rate cut next month.

Tracking more than 18,500 coins, the value of the crypto market has fallen by a quarter since a high in early October, according to the data company CoinGecko.

Bitcoin has fallen by 27% over the same period to $91,212, its lowest level since April.

Investors around the world are on edge as fears mount over an artificial intelligence bubble in the stock market, with even the boss of Google’s parent company warning that “no company” will be immune if the bubble bursts.

.

The UK’s blue-chip FTSE 100 index fell 1.3% on Tuesday, its fourth day in the red in a row and the worst day since April. The Stoxx Europe 600, which tracks the biggest companies on the continent, fell 1.8%. Wall Street was also trading lower, with the Dow Jones, Nasdaq and S&P 500 all down about 1% on Tuesday.

It followed steeper falls in Asia, where in the Japan the Nikkei 225 index shed 3.2%. Hong Kong’s Hang Seng index dropped 1.7%.

Sundar Pichai, the head of Google’s parent company, Alphabet, said in an interview with the BBC that there was “irrationality” in the current AI boom. He warned that in the event that the AI bubble bursts, “no company is going to be immune, including us”.

Meanwhile JP Morgan Chase vice chairman, Daniel Pinto, said that booming AI valuations are due for a reassessment. “There is probably a correction there,” he said at the Bloomberg Africa Business Summit in Johannesburg on Tuesday. “That correction will also create a correction in the rest of the segment, the S&P and in the industry.”

The chief executive of Klarna, Sebastian Siemiatkowski, also sounded the alarm this week, warning that huge sums being poured into computing infrastructure made him “nervous”.

He told the Financial Times: “I think [OpenAI] can be very successful as a company but at the same time I’m very nervous about the size of these investments in these datacentres. That’s the particular thing that I am concerned about.”

The Klarna co-founder added that the rising valuation of AI companies, including the chipmaker Nvidia, was also a source of concern. Nvidia became the first company to hit a market value of $4tn this year, later followed by Apple and Microsoft.

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“That makes me nervous, because of the amount of wealth that is currently automatically allocated into this trend, without some more thoughtful thinking,” Siemiatkowski said.

“You can say, ‘I disagree with the fact that Nvidia is worth that much and I don’t care, some rich people are going to lose some money.’ But the truth is, because of the index funds and how this works, your pension right now is going into that theory that it is a good investment.”

An AI bubble is now seen as one of the most serious risks in the stock market, and a survey by the Bank of America found that 45% of its polled fund managers believe it is the biggest tail risk.

The price of gold, which is traditionally seen as a safe haven asset, is also falling. The spot price fell by 0.3% to $4,033.29 an ounce on Tuesday morning, after earlier hitting its lowest level in a week.

The drop comes amid fading expectations that the US Federal Reserve will cut interest rates next month. Higher interest rates make gold relatively less appealing as the metal does not pay a yield.

However, Giovanni Staunovo, an analyst at the Swiss investment bank UBS, said the gold price was likely to fall further but would soon recover.

“I would expect gold prices to bottom out soon, as I still see the Fed cutting rates several times over the coming quarters, and central banks’ diversification into gold remains strong,” he said.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for the Dominican Republic[1] on November 12, 2025. The authorities need more time to consider the publication of the Staff Report prepared for this consultation.[2]

The Dominican Republic’s (DR) growth slowed in late 2024 and the first half of 2025 largely due to increased uncertainty and tighter financial conditions. There are preliminary signs that economic activity is reviving, with credit, exports, and tourism growth all picking up in recent months, underpinned by supportive monetary and fiscal policies. Inflation remains close to target and is expected to average 3.7 percent in 2025. External balances are in line with fundamentals and desirable policies. The current account deficit is expected to narrow further this year to 2.5 percent of GDP, on the back of robust exports and remittances, and is fully financed by foreign direct investment (FDI).

Growth is expected to accelerate to 4.5 percent in 2026 then converge to its long-term trend of 5 percent, while inflation is forecast to remain around the 4 percent ± 1p.p target. The current account deficit is expected to remain around 2½ percent and continue to be fully financed by FDI. The government’s deficit and debt are projected to gradually decline, in part due to the expected reduction of electricity sector losses and improved targeting of energy subsidies. This will also help to create space for planned increases in public investment.

The balance of risks is tilted to the downside, but the DR is well-positioned to weather them. External risks from global financial conditions and heightened uncertainty remain, as does the DR’s vulnerability to natural disasters. But the DR has strong economic fundamentals and policy space to respond should these risks materialize. On the upside, the DR could benefit from trade diversion and FDI inflows stemming from changes in global trade policies. Domestically, delays in implementing the authorities’ reform and public investment plans could pose a downside risk to growth, while robust implementation would create upside “risks” to growth.

 

Executive Board Assessment[3]

Executive Directors commended the Dominican Republic’s sustained efforts to strengthen policies and institutions and advance business‑friendly reforms, driving the strong macroeconomic performance over the past two decades. Directors welcomed that growth is expected to accelerate and inflation remain well‑anchored. They agreed that while downside risks persist, the country is well positioned to absorb shocks, given its strong fundamentals and policy space. Notwithstanding the strong fundamentals, Directors encouraged the authorities to continue with their prudent policies and steadfast implementation of the reform agenda to accelerate growth and enhance resilience.

Directors encouraged the authorities to maintain prudent fiscal policies and support increased public investment, in line with the medium‑term fiscal framework and Fiscal Responsibility Law. They welcomed the planned consolidation, focused on revenue mobilization and improving spending efficiency, including by removing generalized subsidies while safeguarding necessary social spending. A well‑communicated medium‑term revenue strategy could help lay the groundwork for broader fiscal reform. Directors noted that full implementation of the Electricity Pact is essential to limit fiscal risks and ensure resilience.

Directors concurred that the monetary policy stance is broadly appropriate. They underscored that strengthening the monetary transmission mechanism would help to reinforce the effectiveness of the inflation targeting framework. Accordingly, Directors encouraged efforts to advance a comprehensive and clearly communicated strategy to gradually wind down exceptional liquidity measures. Furthering domestic financial markets development would also support policy transmission. Directors highlighted the need for continued exchange rate flexibility, with interventions focused on smoothing large shocks and rebuilding buffers to bolster external stability.

Directors noted that the banking system remains healthy and systemic risks are limited. They commended the progress on enhancing the financial sector supervisory and regulatory framework. The adoption of Basel II and III standards, development of a macroprudential policy toolkit, and strengthening of the AML/CFT framework remain key priorities.

Directors welcomed the ambitious structural reform agenda, aimed at boosting the country’s potential growth and achieving high‑income status as envisioned in the Meta2036 Plan. They noted that efforts to further improve governance, advance labor and social security reforms, and efficiently invest in infrastructure, education, and health are essential to achieve these goals. Noting the progress made, Directors concurred that the Dominican Republic’s high vulnerability to natural disasters requires a comprehensive approach to mitigating risks and building resilience. Important measures include enhancing the disaster risk management frameworks and deepening natural disaster considerations in fiscal policy.

 

 

 

Dominican Republic: Selected Economic Indicators
Population (millions, 2024)                                                     10.8		GDP per capita (2024, U.S. dollars)                        11,542
Quota                                   477.4 millions SDRs / 0.10% of total		Poverty (2023, share of population)                          23.0
Main exports                                            tourism, gold, tobacco		Extreme poverty (2023, share of population)             3.2
Key export markets                                   U.S., Switzerland, Haiti		Adult literacy rate (2021, percent)                             95.5
						Projection
	2020	2021	2022	2023	2024	2025	2026
Output	(Annual percentage change, unless otherwise stated)
Real GDP	-7.9	14.0	5.2	2.2	5.0	3.0	4.5
Nominal GDP (RD$ billion)	4,440	5,427	6,257	6,765	7,403	7,977	8,701
Nominal GDP (US$ billion)	78.6	95.1	113.8	120.8	124.6	…	…
Output gap (in percent of potential output)	-6.7	-1.9	-0.8	-1.8	-0.8	-1.7	-0.9
Prices
Consumer price inflation (end of period)	5.6	8.5	7.8	3.6	3.3	3.7	4.0
Exchange Rate
Exchange rate (RD$/US$ – period average) 1/	56.5	57.1	55.0	56.0	59.4	…	…
Exchange rate (RD$/US$ – eop) 1/	58.2	57.3	56.2	58.0	61.1	…	…
Real effective exchange rate (eop, – depreciation) 1/	-8.1	6.5	6.3	-1.9	-0.4	-1.7	0.0
Government Finances	(In percent of GDP)
Consolidated public sector debt 2/	71.4	61.8	58.8	59.7	58.1	59.2	58.2
Consolidated public sector overall balance 2/	-9.0	-3.7	-3.6	-4.1	-3.9	-4.5	-3.8
Consolidated public sector primary balance	-4.3	0.7	0.6	0.8	1.1	0.5	1.0
Non-Financial Public Sector (NFPS) balance	-7.6	-2.5	-2.7	-3.1	-3.2	-3.9	-3.2
Central government balance	-7.9	-2.9	-3.2	-3.3	-3.1	-3.4	-3.2
Revenues and grants	14.2	15.5	15.3	15.8	16.4	16.0	15.5
Primary spending	18.9	15.3	15.7	16.0	16.1	15.8	15.1
Interest expenditure	3.3	3.1	2.8	3.2	3.4	3.6	3.7
Rest of NFPS	0.3	0.4	0.6	0.2	-0.1	-0.5	0.0
Financial Sector	(Annual percentage change, unless otherwise stated)
Broad money (M3)	21.2	13.4	6.3	14.4	11.3	10.3	9.5
Credit to the private sector	5.3	11.6	16.6	19.7	13.5	12.3	12.6
Net domestic assets of the banking system	2.5	11.2	9.9	13.5	19.0	9.2	10.2
Policy interest rate (in percent) 1/	3.0	3.5	8.5	7.0	6.0	…	…
Average bank deposit rate (1-year; in percent) 1/	3.1	2.3	9.9	8.6	9.8	…	…
Average bank lending rate (1-year; in percent) 1/	9.9	9.2	13.5	13.6	15.1	…	…
Balance of Payments	(In percent of GDP)
Current account	-1.7	-2.8	-5.8	-3.7	-3.3	-2.5	-2.5
Goods, net	-8.7	-12.4	-15.1	-13.1	-12.8	-12.0	-11.4
Services, net	1.8	3.9	4.8	6.0	6.7	6.6	6.4
Income, net	5.2	5.7	4.5	3.5	2.7	2.9	2.6
Capital account	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Financial account 3/	5.3	5.7	6.7	5.2	2.4	3.3	2.8
Foreign direct investment, net	3.3	3.4	3.6	3.6	3.6	3.5	3.5
Portfolio investment, net	7.1	2.2	2.9	2.0	1.8	3.0	1.1
Financial derivatives, net	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other investment, net	-5.1	0.1	0.2	-0.4	-3.1	-3.2	-1.8
Change in reserves (-increase)	-2.5	-2.4	-1.3	-0.9	1.7	-0.8	-0.4
GIR (in millions of US dollars)	10,752	13,033	14,408	15,464	13,388	14,448	14,973
Total external debt (in percent of GDP)	56.6	47.8	39.9	43.2	43.7	45.7	45.2
of which: Consolidated public sector	40.4	35.3	33.2	34.2	34.6	36.0	35.3
Sources: National authorities; World Bank; and IMF staff calculations. 1/ Latest available. 2/ The consolidated public sector includes the budgetary central government (CG); the rest of the Non-Financial Public Sector, i.e., extra-budgetary central government institutions (decentralized and autonomous institutions), social security funds, local governments and non-financial public companies; and the quasi-fiscal central bank debt. 3/ Excluding reserves.

 

[1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] Under the IMF’s Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The authorities have not yet communicated their decision on the publication of the staff report.

[3] At the conclusion of the discussion, the Managing Director, as Chair of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.

 

 

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