It was a Jekyll-and-Hyde kind of week in the market. Wall Street’s enthusiasm for artificial intelligence stocks proved short-lived. A promising week early on gave way to sharp back-to-back selling after a run of disappointing tech earnings. The Nasdaq had climbed more than 2% through Wednesday before losing 1.4% on Thursday and nearly 3% on Friday. The tech-heavy index lost 2% for the week and sank 5.3% for October. The S & P 500 followed a similar pattern, culminating in a nearly 2% decline Friday and a similar loss for the week. The broader market index fared better for the month, only losing nearly 1%. The rotation out of tech and into defensive stocks showed up the most in the Dow , which fell less than 1% for the week and actually gained 1.7% for the month. Semiconductor stocks staged a sharp rebound before renewed concerns about the AI trade sent shares tumbling. It didn’t help that expectations remained high for the Federal Reserve to raise interest rates in December. While central bankers held rates steady Wednesday, Fed Chairman Kevin Warsh talked tough on inflation, signalling it’s only a matter of time before another hike. The prospect of higher rates only exacerbated investor worries that tech companies may be borrowing too much in the race to keep building out AI. Here’s a closer look at the three developments that drove last week’s market. What reversed the chip stocks Monday started the week off strong. Anthropic’s IPO filing helped reignite enthusiasm for the AI group, while SK Hynix’s record quarterly profit on Wednesday reinforced confidence in strong memory demand. The iShares Semiconductor ETF (SOXX) surged roughly 9% over the first three trading sessions. But the rally fizzled as disappointing Big Tech earnings revived concerns about AI spending. Intel added to the pressure with a weak outlook Thursday evening that sent shares plunging more than 28% on Friday, making it our worst performer of the week. We cut our price target and placed our rating under review. Jim Cramer said Friday that he can’t rationalize selling Intel after such a big decline. Portfolio director Jeff Marks summed it up in the Homestretch: “The data center story at Intel is still mostly intact, but what we got wrong was the sharp drop in personal computer CPU demand due to the high cost of memory and some execution hiccups.” Wall Street’s AI priorities changed Earnings from Microsoft , Alphabet , and Amazon reinforced a shift in sentiment: Investors are increasingly prioritizing financial discipline and a line of sight to returns on AI investments over aggressive spending. Microsoft delivered strong results Wednesday, with Azure revenue growing 48% and capital spending coming in below expectations. Shares initially rallied before giving back their gains, but Jim praised management’s ability to deliver robust cloud growth while keeping spending in check. We raised our price target to $580 from $550 and maintained our hold-equivalent 2 rating . Microsoft shares only fell 0.5% for the week, certainly a win considering how bad tech performed. Alphabet faced a much harsher reaction. Shares plunged roughly 12% on Thursday, the day after the Google parent missed earnings and revenue expectations and reported negative free cash flow. Strong cloud growth wasn’t enough to offset disappointing advertising results and concerns about its massive AI investments. Alphabet was our second-worst performer of the week, down 12.6%. While still encouraged by its cloud business, we were not ready to buy the dip . Amazon also disappointed Thursday evening , missing earnings and revenue expectations as weaker retail and advertising results overshadowed accelerating growth at Amazon Web Services. Shares fell 1.4% on Friday, which was pretty considering it was down over 6% at session lows. Investors scrutinized the company’s negative free cash flow and next year’s big capital spending plans. AWS remains a bright spot, with revenue growing at its fastest pace in nearly five years. Just after Friday’s opening bell, Jim said, ” I think you buy Amazon here .” For the week, Amazon lost 3%. Winners (and one loser) away from pure tech Eli Lilly surged more than 6% to a record high Thursday after another beat-and-raise quarter fueled by strong demand for its obesity and diabetes drugs. The stock extended its gains on Friday, making it our second-best performer of the week, up more than 11%. Healthcare was the best sector for the week as the flight from tech benefited more defensive names. We raised our Lilly price target to $1,500 from $1,300 and maintained our hold-equivalent 2 rating after the stock’s impressive run. Despite issuing a softer-than-expected current outlook, FedEx shares rallied Thursday and Friday as investors focused on the company’s progress improving efficiency and profitability under CEO Raj Subramaniam. Jim said Friday he still sees FedEx as a buy but might not chase it right now. The stock gained nearly 5% last week. FedEx Freight performed even better, surging nearly 15% on Friday and nearly that for the week. In its first official earnings report as a standalone company, Freight topped expectations. Encouraging commentary on pricing and operational improvements made the less-than-truckload stock our best performer last week. We continue to prefer FedEx over its former subsidiary, but both reports reinforced our confidence in their long-term strategies. Linde and Starbucks also delivered encouraging results. Linde posted record quarterly sales and profits , supported partly by semiconductor demand, while Starbucks reported stronger-than-expected profits and comparable sales growth as CEO Brian Niccol’s turnaround gained traction. Jim called Starbucks a buy during Friday’s Morning Meeting. For the week, Starbucks rose nearly 3%, and Linde gained 1%. GE Vernova initially struggled despite delivering a beat-and-raise quarter Wednesday and announcing a $9 billion acquisition of grid equipment maker Trench Group. Investors appeared concerned about the pace of gas turbine order growth next year, but we believe the reaction overlooked strong underlying demand. GEV is not a pure-play AI stock but is tied to the data center build-out. But the electrification opportunity is looking promising. The Trench deal supports that. GE Vernova rose more than 5% last week, clawing back nearly half the prior week’s decline. Moving from the winners to our third-biggest loser last week. Boeing tumbled more than 10% Tuesday after management pushed back its timeline for reaching $10 billion in annual free cash flow to 2029, overshadowing a record $745 billion backlog. While the recovery is taking longer than expected, we view the guidance reset as a potential clearing event . We maintained our buy-equivalent 1 rating but lowered our price target to $225. For the week, Boeing lost nearly 9%. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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