The AI trade faces big tests next week, starting with Nvidia earnings and capped by Anthropic IPO
The artificial intelligence trade is about to face its next big test in the week ahead, with Nvidia earnings and Anthropic ‘s IPO on the docket. Stocks held up surprisingly well this week, especially considering Nvidia co-founder and CEO Jensen Huang’s exit — following affairs with an alleged Chinese spy and two company employees — led some to worry that Wall Street’s AI heavyweight was about to dive 20% or more . Instead, the chipmaker ended the week down by about 13%, while the major averages themselves scored their best week since August . The S & P 500 technology sector is higher by more than 2%, snapping a five-week slump. Far from abandoning the AI trade, investors instead rotated into other tech stocks, such as Apple , Advanced Micro Devices and Broadcom that bulls took as a sign of health in the market — one where gains are dispersing elsewhere. “The Nvidia story is now idiosyncratic,” said Mark Hackett, chief market strategist at Nationwide Investment Management Group. “There’s a lot of nervousness priced in right now, and the good news is, the market has proven its ability to withstand idiosyncratic but painful moves in tech.” With traders hopeful the stock market has set the stage for a short-term bounce, there are two catalysts next week that could either revive or snuff out the AI recovery. Tuning into Nvidia Nvidia’s earnings Tuesday after the market closes will be watched closely. Results are widely expected to meet high expectations. Investors will listen closely for any clarity on the company’s succession plans now that Huang has left and been replaced by chief financial officer and interim CEO Colette Kress. The 13-year veteran of Nvidia, who served earlier stints at Cisco and Microsoft, may lack the showmanship and panache of her predecessor, but can soothe investors looking for a steady hand to steer the ship until a successor is named. Ian Buck, Nvidia’s vice president of hyperscale and high-performance computing, is emerging as an early favorite. More importantly, traders are closely watching for opportunities to get in on Nvidia, after its more than 30% decline in six weeks, which obliterated roughly $2 trillion from its market value. Other investors are still wary there’s more to come. Jeff Kilburg, founder of KKM Financial, said the opportunity now is to buy and own Nvidia. To define his risk, he said he bought January $200 calls this week. The stock was last at about $160. “There’s a ton of uncertainty, and I’m not trying to pretend like I know anything,” Kilburg said. “But what I do know is that the line of sight is that they have a trillion dollars in demand verified, and that trillion dollars in demand, which takes them through 2028 between Blackwell and Ruben, that’s not going away.” “I have confidence that the company is going to find a way through,” Kilburg added. Dan Ives, partner at Yorkville Ives & Co, has a 12-month price target of $225 on Nvidia without Huang as CEO. Given where Nvidia is trading, he considers it a buying opportunity. AI temperature check Anthropic could also give investors a temperature check, if its debut next week is met enthusiastically by traders. The stock is expected to start trading Thursday on the Nasdaq Global Select Market after pricing its IPO Wednesday in an expected range of $70 to $78 per share. It’s supposed to start trading under the ticker “ANT.” If Anthropic debuts as expected next week, the AI laboratory will do so after lowering its estimated valuation to about $1.2 trillion from $2 trillion earlier in the fall, a wise move for the company, according to Benjamin Black, investment chief at Powerlaw Corp., a publicly traded, closed-end investment fund. The money manager said Anthropic is “not even really that expensive,” given that the company is supposed to reach a $100 billion annualized revenue run rate by the end of 2026, meaning the price would pencil out at roughly 12 times ARR. “I have never seen a company that had more demand from investors to get into than than Anthropic in the private market,” Black said. “Anthropic’s smart to give up some price to make it easy for the public to make some money here,” he continued. “I think at that price, it’s going to do quite well.” Week ahead calendar All times ET. Monday, Nov. 16 8:30 a.m. Empire State Index (November) Earnings: Tyson Foods Tuesday, Nov. 17 8:15 a.m. ADP Weekly Employment change (10/31) 8:30 a.m. Export Price Index (October) 8:30 a.m. Import Price Index (October) 8:30 a.m. Retail Sales (October) 9:15 a.m. Capacity Utilization (October) 9:15 a.m. Industrial Production (October) 10:00 a.m. Business Inventories (September) 10:00 a.m. NAHB Housing Market Index (November) Earnings: Nvidia , The Home Depot , The Walt Disney Company Wednesday, Nov. 18 8:30 a.m. Housing Starts (October) 10:00 a.m. Pending Home Sales (October) 2:00 p.m. FOMC Minutes Earnings: Everpure , Palo Alto Networks , The TJX Cos. , Target , Lowe’s Companies , The Progressive Corp. Thursday, Nov. 19 8:30 a.m. Initial Claims (11/14) 8:30 a.m. Philadelphia Fed Index (November) 10:00 a.m. Leading Indicators (October) Earnings: Keysight Technologies , Ross Stores , Intuit , Walmart Friday, Nov. 20 10:00 a.m. Michigan Sentiment final (November)
