With the furor over Nvidia's CEO departure still not settled, Wall Street has already shifted its attention to next week, when Nvidia's quarterly report and Anthropic's listing will arrive in quick succession, and the answer to whether confidence in AI trades can withstand this dual stress test is about to be revealed.
Nvidia CEO Jensen Huang abruptly resigned last Thursday over an extramarital affair scandal, triggering deep concerns about the AI chip giant. Even so, Nvidia shares fell about 13% this week, far less than the 20% or even larger decline the market had previously feared, while the S&P 500 posted its best weekly performance since August. At the same time, Anthropic announced that its IPO valuation had been sharply cut from an earlier high of about $2 trillion, with the offering now expected to be valued at roughly $1.2 trillion to $1.4 trillion.
The shock absorbed by the market reflects the fragility of the current AI narrative. Consumer inflation data came in above expectations, expectations for further Federal Reserve rate hikes are heating up, and tensions in the Middle East persist, together forming macroeconomic pressures that cannot be ignored.
Sameer Samana, global head of equities and real assets at Wells Fargo Investment Institute, warned that if both major events next week disappoint, "it could ultimately wake investors up from this state of always looking on the bright side."
Nvidia: Earnings will test stability in the post-Huang era
Nvidia will report quarterly results after the U.S. market close on Tuesday, its first earnings report since Huang's departure, and outside attention is extremely high.
Citing LSEG data, Reuters reported that analysts expect Nvidia's third-quarter revenue of about $109 billion, with profit growth of about 90% year over year. Expectations for the results themselves are relatively optimistic, but investors are more focused on the stability of company management and continuity of strategy.
The question of a successor has become a focal point. Nvidia Chief Financial Officer and interim CEO Colette Kress will appear under pressure at the earnings release, and the outside world expects her to give investors a reassuring message.
The executive, who has been at Nvidia for 13 years and previously worked at Cisco and Microsoft, may not have Huang's personal charisma, but analysts believe she can provide the management continuity needed for a steady transition. According to reports, Ian Buck, Nvidia's vice president of hyperscale and high-performance computing, is currently an early favorite to become the formal successor.
In addition, Colette Kress will also need to explain to investors a series of financing deals signed during Huang's tenure, which still carry considerable uncertainty.
Alex Morris, chief executive of F/m Investments, noted that given the uncertainty surrounding Nvidia, "if results fall short of expectations, the market's punishment will be amplified."
However, some investors already see the current share price as a buying opportunity. Nvidia shares have fallen more than 30% over six weeks, with market value shrinking from about $5.8 trillion in early October to about $3.9 trillion.
Jeff Kilburg, founder of KKM Financial, said he bought January call options with a $200 strike this week, when the stock was around $160. "Their proven demand reaches $1 trillion, with visibility extending to 2028 from Blackwell to Ruben, and that is not going away," Kilburg said. Dan Ives, a partner at Yorkville Ives & Co, maintained a 12-month price target of $225 for Nvidia and views the current price as a buying opportunity.
Anthropic: A trillion-dollar valuation IPO approaches, a barometer of AI sentiment
Just two days after Nvidia's earnings release, Claude chatbot developer Anthropic is expected to list on the Nasdaq Global Select Market on Thursday under the ticker "ANT," with an IPO price range of $70 to $78 per share, plans to offer 825 million shares, and fundraising of as much as about $64.4 billion.
Ahead of the listing, Anthropic has lowered its valuation target from about $2 trillion in early autumn to about $1.2 trillion to $1.4 trillion.
Benjamin Black, head of investment at publicly traded fund Powerlaw Corp., considers the move quite wise. He noted that based on the $100 billion in annualized revenue Anthropic is expected to achieve by the end of 2026, the current pricing corresponds to about 12 times ARR (annual recurring revenue), which is "not even very expensive."
Anthropic CEO Dario Amodei said in a live conversation with JPMorgan CEO Jamie Dimon on Friday that he hopes the company can "promise less and deliver more" in its IPO. Black noted that he has never seen a company attract such high investor demand in the primary market. "Anthropic smartly gave up some price so the public can also make money, and I think this pricing will perform quite well."
The IPO follows the successful market debut of Elon Musk's SpaceX in June this year. SpaceX raised about $75 billion at a valuation of nearly $1.75 trillion, although the stock has been volatile since listing, falling from its IPO price of $135 to about $105 in August and most recently trading at about $139.
Patrick Ryan, chief investment strategist at Madison Investments, warned that if Anthropic performs poorly after listing, "this could be another warning signal that investors are beginning to feel more pressure on AI trades."
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