Anthropic filing, hyperscaler capex pullback spook AI trade

The unease comes after a week in which the AI build-out's financing side and its return side were both questioned. Anthropic's public filing offered little visibility on forthcoming revenues, following a deceleration in sales from the second to the third quarter. At the same time, Big Tech earnings reports indicated that hyperscalers are pulling back on capital expenditures, which suggests they see a terminal level of required computing power at some point in the future.

The stock bull market originally driven by the AI boom remains intact, with the S&P 500 just a few percent off a record, and a rotation into non-AI names like Procter & Gamble and Berkshire Hathaway has stepped in to support the market. But AI-related shares are already in a bear market or teetering on one, and Friday's trading reflected that split: Intel fell 25% on lackluster revenue guidance, Micron dropped 5.5%, Nvidia slipped 4%, Amazon lost 2%, and Google fell another 1% after its worst trading day ever on Thursday, when it reported a drop in core advertising sales revenues.

Options markets are showing the shift in sentiment. Dennis Davitt, CIO and co-founder of Millbank Dartmoor Portsmouth, said tech stocks historically carry call skews, but he has seen that reverse in the last three days as more people buy downside insurance. He also pointed to a possible silver lining: options pricing in Meta's Muse agent shows less fear priced into Meta than into Amazon, which he said may reflect growing confidence in the commercial prospects of AI technology itself, even as investors get cold feet about the big tech companies associated with the trade. Paul Tudor Jones of Tudor Investment Corporation said earlier this month that the odds were 60-40 that markets are on a path toward a "tipping point," noting that AI-related issuance as a share of GDP is 50% more than railroads and triple that of highways and telecoms.