Wall Street struggled to find its footing last week as fresh concerns over financing the artificial intelligence boom overshadowed strong results. An early recovery for AI stocks hit a wall on Thursday after Metaplatforms reported negative free cash flow for the first time since its initial public offering in 2012. On Friday, the selling spread to more defensive areas of the market, with the Dow Jones Industrial Average falling more than 1% as oil prices soared on concerns about a renewed U.S. attack on Iran. The Nasdaq posted only a small loss as investors returned to depressed semiconductor stocks and bought up cyber stocks. The S&P 500 was slightly lower on Friday. For the week, the Dow Jones Industrial Average rose 0.4%, a big win. The S&P 500 fell 0.5% and the Nasdaq fell 0.7%. Here, we take a closer look at three trends that drove market action last week. AI Financing Concerns Deepen AI trading remained volatile last week as investors weighed strong demand against growing concerns about how companies will finance large-scale infrastructure projects. AI stocks rallied earlier in the week, particularly following the spike in SpaceX sales reported on Tuesday night. Thursday was terrible. In addition to cash flow concerns, Meta’s strong earnings from Wednesday evening were overshadowed by a disclosure that its long-term plans could require hundreds of billions of dollars in additional funding. Coreweave, the focus of concerns over debt-driven AI spending, fell 10% on Thursday as investors continued to scrutinize the company’s borrowing costs. Neocloud fell more than 10% for the week after ending the previous week down more than 25%. Nvidia CEO Jensen Huang acknowledged the financing challenges, saying on Thursday that “the demand for capital far exceeds the availability of capital.” The issue is not the demand for AI, but whether companies can secure enough capital to meet rising borrowing costs. Nvidia fell about 1.5% last week. We took advantage of Thursday’s selloff to buy 10 shares of GE Vernova, our first AI-related purchase in five weeks, and raised our rating on the stock to “1”, the equivalent of “buy”, due to our confidence in long-term power demand. But we also reduced our exposure to broad AI trading. “With the collapse of the data center, we need to circle the wagons,” Jim Cramer said. “You can’t have too much of what we have. You can pick and choose like you did with GEV, but nothing aggressive. And every tag end has to be like Broadcom.” He continued, “Circling means we want to be bigger in better areas.” To that end, we exited Broadcom on Friday for an average gain of about 128%. I also trimmed CrowdStrike, not because of concerns about fundamentals, but to right-size my position, and realized a gain of about 187%. Last week’s two biggest winners were CrowdStrike and Palo Alto Networks. Both rose more than 11% as news of security flaws in the PHP programming language sparked a global security battle. CrowdStrike CEO George Kurtz told CNBC on Friday that CrowdStrike observed AI-powered attacks that doubled every month from July to September. Jim has always said that in the new world of AI, cyber is needed more than ever. Unraveling Meta’s turbulent week Meta posted a strong third quarter on Wednesday night, but is concerned about negative free cash flow and AI spending, and needs to shore up strong guidance and a promising roadmap for its viral Muse AI agent. Making Meta’s 7% decline on Thursday even more painful, Meta was up in after-hours trading Wednesday night on positive signs for Muse. A slowing outlook for capital spending was initially seen as a bright spot on earnings night, but regulatory filings from Meta quickly raised new concerns about its funding needs. The company warned that its long-term plan could require raising “hundreds of billions of dollars over several years starting as early as the fall of 2026.” The filing sheds further light on Meta’s plans to create a new class of non-voting stock, Class C, in January to help finance investments and acquisitions without diluting CEO Mark Zuckerberg’s voting rights. The new share class essentially facilitates a 2-for-1 stock split, with holders receiving one Class C share for every Class A share they own. While we are encouraged by early Muse traction and Meta’s strong core digital advertising business, we want more clarity on how these investments will be funded and monetized. The company maintained Meta’s stock rating of “Hold Equivalent 2” and price target of $800. Meta stock has fallen more than 9% this week. Portfolio bright spots Last week’s rotation of AI stocks benefited several defensive portfolio holdings and reinforced the importance of diversification. Kimberly-Clark rose 4.3% as investors sought safety in everyday staples. Home Depot rose 3.3%, benefiting from the 10-year Treasury yield falling below 5%, which could lead to a rebound in housing activity and home improvement spending. Johnson & Johnson soared 3.2%, recouping all post-earnings losses as investors moved into the health care sector. There were also encouraging developments for Apple and Qnity Electronics. Apple’s new foldable iPhone Duo is off to a strong start, with delivery expectations exceeding three months. Supply constraints are contributing to delays, but strong demand suggests the device could become a new growth engine. Duo became available in stores for customers on Friday. Apple stock rose about 1.2% for the week. The iPhone maker also expanded its partnership with Qnity, which will produce advanced film for the 18 Pro’s new camera system. While the deepening of our relationship is encouraging, our investment thesis remains focused on Qnity’s rapidly growing data center business. Kuniti stock fell more than 4.5% for the week in the wake of recent data center trade troubles, but far less than GE Vernova’s more than 11% weekly decline. Take a video tour of Qnity Labs outside Boston. (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. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. 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