"It was the epoch of belief, it was the epoch of incredulity," Charles Dickens wrote, "the season of both "hope" and "despair." He was writing about the French Revolution. He could have been writing about this week's action in the U.S. equity market.
The belief and hope came on Monday, when Anthropic shared information ahead of its IPO in an S-1 filing, a document that surely ranks as one of the most fascinating ever put forth by corporate America. Tech entrepreneur Peter Diamandis accurately sums up the Lovecraftian scale of the risks and opportunities it limns: "Every religion in history has promised miracles and warned of the apocalypse. Anthropic is the first to file both with the SEC."
While the word "apocalypse" doesn't actually show up in the 92-page section on "Risk Factors," Anthropic does grant that many people, including some of its own staff, have said artificial intelligence "could pose catastrophic or existential risks to humanity," which isn't a phrase you'll find in Build-A-Bear's S-1.
More relevant is that Anthropic has grown revenue incredibly quickly -- to $16.3 billion in the first half of 2026 -- and generated an adjusted operating profit of $1.6 billion (as compared with a $3 billion adjusted operating loss in the second half of 2025). That shows the company is already building a path to profitability, an incredibly important sign given its (and rival OpenAI's) central position as a demand driver for the entire AI infrastructure buildout.
And obviously, the company sees this as just the start, writing that it believes that exponential process in machine cognition "is likely to continue, eventually reaching the level of what we have called 'a country of geniuses in a data center' -- millions of virtual agents with the ability to revolutionize every area of human endeavor." Then Anthropic goes even further: "Our aim is to help humankind chart a safe course through this technological evolution, open new frontiers of discovery, and bring forth an age of miracles."
We could mock this grand vision. We won't. Not only does it seem to be sincerely held by Dario Amodei and the company's other founders, but Anthropic has already shown its capacity to make incredible progress with its technology.
But it does leave investors in an impossible situation. Do they trust Anthropic to deliver literal miracles? Or do they become conscientious objectors, and risk missing out on what Anthropic aptly says would represent "one of the greatest economic opportunities in history"?
Sticking with the AI beneficiaries, such as semiconductor manufacturers and data-center builders, would be easier if not for days like Thursday and Friday, when incredulity and disbelief gripped the financial world. After Wednesday's close, Alphabet reported earnings that showed phenomenal growth in its cloud business, but also missed profit expectations due to poor results in the search business.
Then Amazon.com, too, missed estimates, with slow growth in its retail and advertising businesses dragging down its profit haul. Intel didn't help matters when it cut forecasts due to weakness in the personal-computer market -- leading to a 28% plunge in the stock on Friday. If these hyperscalers' core businesses are slowing, and if AI isn't helping them juice their profits, it suggests that their spending on the AI buildout could cool down.
Mix it all together, and you get a very volatile flat week for the iShares Semiconductor exchange-traded fund. The Nasdaq Composite rose 2.3% through hump day, then plunged to register a 1.4% loss on the week. The Dow Jones Industrial Average was much more restrained, ending the week with a 0.3% loss, and the S&P 500 was down just 0.2%.
Even more interestingly, the Invesco S&P 500 Equal Weight ETF was up 0.8%, and the Russell 2000 rose 3.7%. This shows that there is a world beyond AI, and it's actually pretty sunny. Gross domestic product rose 3.4% in the third quarter, and on Wednesday, the Federal Reserve turned down the opportunity to raise its benchmark interest rate. With over half of the S&P 500 reporting earnings, 82% of companies have beaten earnings expectations, per Bloomberg data.
"Look at your portfolio, and make sure you're not significantly overweight tech," advises Megan Horneman, chief investment officer at Verdence Capital Advisors. "The AI idea is here to stay, but I do think we're in the later innings of the euphoria around some of these tech stocks. So you have to be very careful."
She advises looking for diversification in small-caps, international developed equities, and value stocks. That's been a smart call so far. The S&P 500 Value index outperformed the S&P 500 Growth index by about 10% in October -- its largest outperformance since on record.
Whether you follow her lead, or instead opt to buy dips in AI-focused names like Alphabet and Nvidia, comes down to a simple question. Do you believe in miracles?
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