It’s been a Jekyll and Hyde week at the market. Wall Street’s enthusiasm for artificial intelligence stocks was short-lived. A promising start to the week gave way to a series of sharp selloffs after a string of disappointing tech company results. The Nasdaq was up more than 2% through Wednesday, but fell 1.4% on Thursday and nearly 3% on Friday. The tech stock weight was down 2% this week and 5.3% in October. The S&P 500 index followed a similar pattern, dropping nearly 2% on Friday and reaching a similar decline this week. The overall market index performed well during the month, with a decline of nearly 1%. The rotation from tech stocks to defensive stocks was most evident in the Dow Jones Industrial Average, which was down less than 1% for the week but actually rose 1.7% for the month. Semiconductor stocks rebounded sharply, but concerns about AI trading reignited, sending stocks plummeting. It didn’t help that expectations remained high that the US Federal Reserve would raise interest rates in December. On Wednesday, central bankers kept interest rates on hold, but Fed Chairman Kevin Warsh spoke harshly about inflation and suggested another rate hike was only a matter of time. The prospect of higher interest rates has further exacerbated investor concerns that technology companies are borrowing too much in the race to continue developing AI. Let’s take a closer look at three trends that drove the market last week. Monday’s reversal factor in semiconductor stocks started the week on a positive note. Anthropic’s IPO filing helped reignite enthusiasm for the AI group, while SK Hynix’s quarterly profit on Wednesday boosted confidence in solid memory demand. The iShares Semiconductor ETF (SOXX) is up about 9% in its first three trading sessions. But the bull market subsided as disappointing financial results from Big Tech companies reignited concerns about AI spending. Intel added to the pressure after giving a weak outlook Thursday night, with its stock plummeting more than 28% on Friday, its worst performance of the week. We have lowered our price target and revised our ratings. Jim Cramer said Friday that he can’t rationalize selling Intel after it’s experienced such a steep decline. Portfolio director Jeff Marks summed it up in the homestretch: “Intel’s data center story is still largely intact, but what we did wrong was that personal computer CPU demand plummeted due to high memory costs and some implementation issues.” Shifting AI priorities on Wall Street Microsoft, Alphabet, and Amazon earnings reinforced a shift in sentiment: Investors are increasingly prioritizing financial discipline and a focus on returns on AI investments over aggressive spending. Microsoft announced strong results Wednesday, with Azure revenue up 48% and capital spending lower than expected. Although the stock initially rebounded before returning profits, Jim praised management’s ability to deliver solid cloud growth while reining in spending. We increased our price target from $550 to $580 and maintained a Hold rating of 2. Microsoft stock was down just 0.5% over the week, but it was definitely a win considering the technology’s poor performance. Alphabet faced an even harsher reaction. Shares fell about 12% on Thursday, a day after Google’s parent company reported lower-than-expected earnings and revenue and negative free cash flow. Strong cloud growth wasn’t enough to offset disappointing advertising results and concerns about large AI investments. Alphabet was the second-worst performer this week, dropping 12.6%. While we were still encouraged by the company’s cloud business, we weren’t ready to buy the dip. Amazon also disappointed on Thursday night, with profit and sales below expectations, as weak retail and advertising performance overshadowed Amazon Web Services’ accelerated growth. The stock fell 1.4% on Friday, a significant drop considering it was down more than 6% at the session’s low. Investors scrutinized the company’s negative free cash flow and large capital spending plans for next year. AWS remains a bright spot, with revenue increasing at the fastest pace in nearly five years. Just after the opening bell rang on Friday, Jim said, “I think I’ll buy Amazon here.” Amazon fell 3% for the week. Pure technology The winners (with one loser), excluding Eli Lilly, surged more than 6% to a record high on Thursday after another bullish quarter, driven by strong demand for obesity and diabetes drugs. The stock extended its gains on Friday, rising more than 11%, its second best performance of the week. Health care was the best-performing sector this week as a flight from tech companies benefited defensive stocks. We raised our price target on Lilly’s stock from $1,300 to $1,500 and maintained a Hold rating of 2 following the stock’s impressive rally. Despite announcing a weaker-than-expected current outlook, FedEx shares rose on Thursday and Friday as investors focused on the company’s progress in improving efficiency and profitability under Chief Executive Officer Raj Subramaniam. Jim said Friday that he still thinks FedEx is a buy, but may not pursue it now. The stock price rose nearly 5% last week. FedEx Freight’s performance was even stronger, with shares soaring nearly 15% on Friday and nearly reaching that level for the week. In its first official financial report as a standalone company, Freight exceeded expectations. Less-than-truckload stocks were the best performers last week, as we encouraged comments on pricing and operational improvements. Although we continue to prefer FedEx over its former subsidiary, both reports strengthened our confidence in FedEx’s long-term strategy. Linde and Starbucks also had promising results. Linde posted record quarterly sales and profits, helped in part by semiconductor demand, while Starbucks reported better-than-expected profits and comparable sales growth as CEO Brian Nicol’s turnaround gained momentum. Jim said during Friday morning assembly that he was going to buy Starbucks. For the week, Starbucks rose nearly 3% and Linde rose 1%. GE Vernova struggled initially despite delivering a beat-and-raise quarter on Wednesday and announcing it would acquire grid equipment maker Trench Group for $9 billion. Investors appear concerned about the pace of growth in gas turbine orders next year, but we believe that reaction overlooks the underlying demand. GEV is not a pure AI stock, but is associated with data center construction. However, the opportunities for electrification look promising. The Trench Agreement confirms that. GE Vernova rose more than 5% last week, recouping nearly half of the week’s losses. We’ve moved on from last week’s winner to the third biggest loser. Boeing Co. fell more than 10% on Tuesday after management pushed back its goal of achieving $10 billion in annual free cash flow to 2029, overshadowing a record $745 billion order backlog. Although the recovery is taking longer than expected, we believe the guidance reset is a potential unwinding event. The company maintained its rating of “1,” equivalent to “buy,” but lowered its price target to $225. Boeing is down nearly 9% this week. (See here for a complete list of Jim Cramer Charitable Trust stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, you will receive trade alerts before Jim makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. 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