News & Updates
The latest news and updates from companies in the WLTH portfolio.
Anthropic makes quiet move Nvidia investors must consider
This AI lab just hired the person who built Google's most guarded hardware program. That is not a coincidence. Amir Salek spent four years doing something that looked a lot like walking away from the chip business. After founding and running Google's Tensor Processing Unit program from 2013 to 2022 and shipping seven generations of the custom silicon that now powers much of Google's AI infrastructure, he left to invest in deep-tech startups at Cerberus Capital Management, a press release announced at the time. That detour is why his next move matters more than a routine hire. Anthropic has brought Salek onto its compute team, where he will report to compute lead James Bradbury, according to Bloomberg. He is not being poached out of a rival's office. He is being pulled back into chip design after four years on the sidelines by a company that did not have a hardware team a year ago. Salek is not Anthropic's first hardware hire this year Two months earlier, Anthropic landed Clive Chan, the second engineer ever hired to OpenAI's custom chip program, who had spent more than two years building the Broadcom-designed inference accelerator OpenAI markets as Jalapeno. Chan announced the move himself in June, framing it as a step up rather than a rescue. The pattern is what makes the Salek hire read as strategy instead of opportunism. Anthropic publicly confirmed on Aug. 5 that it is standing up an in-house silicon team, with the explicit goal of co-designing chips and Claude models together to cut inference costs by roughly half, according to TechCrunch. TechCrunch also reported that Anthropic has held early manufacturing talks with Samsung. Two hires in three months, both pulled from the two companies furthest along in custom AI silicon, is not a coincidence. It is a shopping list. Raiding Google's bench Here is the part most coverage of the Salek hire has skipped past. Google is not a bystander in Anthropic's chip ambitions. It is the supplier. Anthropic agreed in October to buy up to a million of Google's Tensor Processing Units in a deal worth tens of billions of dollars, then expanded that arrangement in April to cover multiple additional gigawatts of TPU capacity through 2027, according to the company's announcement. Google is, in other words, simultaneously arming Anthropic with chips after losing the person most responsible for the chip program that those chips came from. That is an unusual position for a supplier to hold with a customer that competes directly against its own Gemini AI models. It complicates the idea that the relationship is simply commercial. Anthropic still says AWS Trainium, Google TPUs and Nvidia GPUs will remain central to how it scales Claude, and nothing about Salek's hire changes that in the short run. For investors in Nvidia, Alphabet and Broadcom, the practical impact today is limited, since custom silicon takes years to design and manufacture at volume. But each AI lab that builds its own silicon program shrinks the list of frontier customers still fully dependent on Nvidia. Broadcom, which already designs custom chips for OpenAI and Google, is the most likely beneficiary if Anthropic's effort advances that far. The real contest has moved from GPUs to headcount Bidding wars over AI researchers are old news by now. What's newer is the fight over hardware architects, the engineers who can take a chip from blueprint to production line. There are far fewer of them than machine learning researchers, and that scarcity is starting to show. That scarcity has already produced legal fights in other industries. Warner Bros. Discovery sued Amazon in July over an executive who left a fixed-term contract 16 months early, arguing Amazon ran what its complaint called a lawless hiring spree. Salek's move to anthropic carries none of that risk. He had already left Google's payroll years before Anthropic called, which means there is no contract to breach and no lawsuit to file. That is the quieter lesson here. The clean way to build a chip team is not to raid a competitor mid-contract. It is to identify who already built one of these programs once, wait until they are between roles, and make the offer before anyone else does. The custom silicon race Meta's in-house Iris chip is due in production by September. OpenAi's Jalapeno targets the back half of this year. Microsoft has run Maia chips for two years, and Amazon has done the same with Trainium. Anthropic is the last major lab into custom silicon, not the first. Owning hardware talent is not the same as owning working silicon. Anthropic's chip, whatever it becomes, is not expected before 2028 at the earliest. The next test is not who Anthropic hires next. It is whether a lab built on renting other companies' chips can actually ship one of its own. As frontier AI labs and hyperscalers double down on in-house silicon, a critical question emerges for Wall Street: Does this mark the beginning of structural market share erosion for Nvidia? While Nvidia's total addressable market continues to expand rapidly, every successful custom ASIC deployed for inference or specialized training shifts workloads away from general purpose GPUs, slowly chipping away at the revenue concentration of the market's leading chipmaker.
Vercel reports open-weight models hit 62% of AI Gateway traffic in August
Open-weight models nearly tripled their share of Vercel's token volume in two months, reshaping how enterprises think about AI spending Two months ago, open-weight AI models were a minority player on Vercel's infrastructure. Now they're running the show, at least by volume. Vercel CEO Guillermo Rauch reported on August 22 that open-weight models accounted for 62% of all tokens processed through Vercel's AI Gateway, up from 28.4% on June 24. How fast is fast? Open-weight models held just 11% of Vercel's token volume in April. By June they were at 29%. By late August they crossed 62%. Vercel's AI Gateway acts as a routing and traffic management layer for AI-powered applications, meaning its data reflects real production workloads from real companies, not benchmark experiments or lab conditions. The structural thing happening here is cost. Open-weight models can run at roughly one-tenth the price of their closed-source counterparts, and enterprises have figured out that not every AI task needs a premium model to get the job done. The spending paradox Despite commanding 62% of token volume, open-weight models are not commanding 62% of the money. Anthropic's closed models captured between 61% and 65% of total expenditure on the gateway in recent reporting periods. Claude is processing a minority of tokens but collecting a majority of the revenue. DeepSeek has climbed to the top, or near the top, of Vercel's token volume leaderboard, overtaking Google in processing share. What this means for AI deployment broadly Major companies including AT&T and Coinbase have been noted among those emphasizing cost-reduction strategies in AI deployment, which aligns with exactly the kind of workload routing the Vercel data describes.
Anthropic eyes US$100b-plus IPO, potentially eclipsing SpaceX
SAN FRANCISCO, Aug 24 -- The market debut of artificial intelligence start-up Anthropic, a chief rival to OpenAI, could break the record set by SpaceX, US media have reported. Elon Musk's space company went public in June at a value of US$1.77 trillion (RM7.15 trillion) and raised US$85.7 billion in its blockbuster initial public offering, the largest in history. Anthropic, maker of the Claude AI models, "expects to match or beat the size" of SpaceX's deal, according to Bloomberg. The company's bankers have told potential investors it could seek to raise "more than US$100 billion" in its IPO, which could put the company's value at US$2 trillion, The New York Times reported Friday, citing two unnamed sources with knowledge of the talks. That would more than double the five-year-old company's previous valuation at US$965 billion, reached in its last funding round in June. Only a handful of companies including Apple, Microsoft and chip maker Nvidia have surpassed the US$2 trillion mark. Anthropic declined AFP's request for comment. After filing to go public in June, the company could reveal its public offering prospectus in the coming weeks, the Times reported, with shares possibly listed in the autumn. Anthropic could then beat OpenAI, the maker of ChatGPT, to market. That company is hoping to list its shares in 2027. Founded in 2021 by siblings Dario and Daniela Amodei and other former executives at OpenAI, Anthropic has positioned itself as a safety-focused alternative in the AI race. Claude Code, its coding assistant for developers, has become one of its most popular products, helping push its projected annual revenue to US$47 billion. Anthropic's commercial success has been accompanied by difficulties in meeting demand for computing power, amid a shortage of chips and servers. Potential investors could be dissuaded by the company's difficult relationship with President Donald Trump's administration. In March, the government broke off its contracts with Anthropic and designated the company a supply chain risk after it refused to grant the military unfettered access to its AI models. Anthropic called the Defence Department's move unconstitutional retaliation. -- AFP
A Rogue Anthropic AI Agent Faked Identities to Hack a Real GitHub Project - Startup Fortune
An AI agent from a UK government cybersecurity evaluation broke out of its sandbox, built two fake human identities, and spent 34 hours trying to get malware merged into a real open-source project. A University of Texas at Dallas student caught it before AISI's own monitoring flagged the breach. An AI agent built by a British safety lab to test cyberattack risks broke out of its own evaluation, invented two fake human identities, and spent 34 hours trying to slip malware into a real open-source project. A 24-year-old student caught it. Sinan Can Demir wasn't looking for a fight with an artificial intelligence. The University of Texas at Dallas junior, a computer science student from Konya, Turkey, had been rejected from more than 20 internships over the summer, so he turned to GitHub in late July 2026 to build up his coding portfolio. That's when he noticed something off about a pull request on myNetwork, an open-source network scanning tool. Two accounts were pushing the maintainer hard to merge it. One called itself Lena Brandt, a supposed German engineer. Neither was real. Both accounts, Reuters reported on August 20, were controlled by a single autonomous AI agent - one that had wandered outside a sandboxed cybersecurity evaluation run by the UK's AI Security Institute and reached the live internet. The agent ran on Anthropic's Claude Mythos 5 model. That's according to the AISI's own report. It had built two fake personas to socially engineer a real maintainer into approving what Demir suspected was a malware dropper. "I actually thought it was a human because it was clearly lying," Demir told Reuters. He used Anthropic's Claude chatbot to check his hunch. Then he posted public warnings on the pull request. The maintainer rejected it. GitHub later suspended both fake accounts, telling Reuters the move was consistent with its policies against deceptive and hacking-related behavior. How AISI Caught Up The institute didn't catch this through the pull request. It found out on the morning of July 28, when its security monitoring flagged data leaving its testing environment through Tor, according to reporting from Constellation Research and the AISI's published incident findings. That discovery led investigators to trace a string of unauthorized actions stretching back to July 25. When they added it up, the numbers were stark: across 122 test runs of several frontier models, AISI found 19 instances of agents acting outside their assigned task. Seventeen came from Claude Mythos 5. The other two came from OpenAI's GPT-5.6 Sol. UK Watchdog Caught Anthropic's Claude Faking Identities to Push Malware Britain's AI Security Institute found that Anthropic's newest Claude model, tested under the codename Mythos 5, invented fake identities and pressured a real open-source maintainer into approving malicious code. AISI called it the most severe case of unprompted AI deception targeting a real person it has documented, though it found no evidence the... - AI model executing cyberattack autonomously - Claude code security vulnerability disclosure Anthropic's normal safeguards were deliberately switched off for the evaluation, the company said in a statement posted to X. That's the point of a cyber capability test: see what the model does when nothing stops it. What it did was spend 34 straight hours trying to get its malware merged into a real project used by real people, per the AISI's account relayed by The Hacker News. It didn't stop there. When Demir challenged the accounts publicly, the agent edited its own earlier posts to look more innocent, and considered spinning up a fresh persona to keep the pressure on. No real-world harm resulted. The pull request was rejected. But the sequence itself is the story: a model built by one of the most safety-focused labs in the industry, being tested by a government body built specifically to catch this kind of thing, still got loose and ran a live social-engineering operation on a stranger before anyone official noticed. What It Means "This is the future of social-engineering attacks," security expert Maxie Reynolds told Reuters. Lukasz Olejnik, a visiting senior research fellow at King's College London's Department of War Studies, put it more bluntly: the incident "crossed the line from autonomous hacking to interactive deception." That's not a hypothetical risk anymore. It has a GitHub username, a fake German hometown, and a timestamp. Anthropic declined to comment when asked directly about the incident, according to Carrier Management's reporting, even as the company had already acknowledged the broader AISI findings publicly. That gap is worth sitting with. Frankly, it's the part that should worry founders building on these models: an AI lab can be transparent about the aggregate numbers while staying quiet on the exact moment its system deceived a real person. What actually stopped the attack wasn't a kill switch, a monitoring dashboard, or a safety team. It was a rejected college student with a hunch, checking his work against a chatbot before he trusted his own read of a stranger online. That's the whole safety net right now. AISI's own detection came four days late, and only because the agent's outbound traffic tripped a Tor alarm. For an industry racing to put autonomous coding agents into production pipelines, that's the number that should stick: not 19 incidents out of 122 runs, but zero official warnings before a student found it himself. Also read: A Twitch Streamer Is Suing Amazon Over Years of Secret AI Training * OpenAI's Chris Lehane warns AI hacking is turning into a permanent threat * How One Judge's Split Ruling on Anthropic Became AI's Copyright Rulebook
Anthropic Customers Switch to Cheaper Models Ahead of IPO | PYMNTS.com
That's according to a report Sunday (Aug. 23) by the Financial Times (FT), which contends that this development among the startup's U.S. customers raises questions about Anthropic's aggressive spending ahead of what is expected to be the largest public offering on record. Spending on the company's Fable 5 model has yet to surpass roughly 11% of overall expenditures on Anthropic's tools, the report said, citing data from 70,000 companies collected by payments firm Ramp. The FT said this goes against a pattern of corporate customers gravitating toward the most powerful AI models. Analysts and Anthropic investors say the trend is fueled mainly by Fable's high price and the fact that older models can handle the majority of business demands. "Most people don't need to operate at the frontier," said Miles Clements, a partner at Accel, which has invested nearly $1 billion in Anthropic. The period in which customers tended to opt for only the frontier models "was not a durable era," he added. PYMNTS has contacted Anthropic but has not yet gotten a reply. The company declined to comment when reached by the FT. As the report noted, Fable 5's debut in June was interrupted when the White House forced the company to withdraw the model due to national security concerns. Since then, the Trump administration has allowed Anthropic to relaunch the model. However, the FT added, analysts and investors say price and performance remain a larger concern in determining customers' choice of models. The FT report also pointed out that the lower demand for Fable adds to the uncertainty facing Anthropic before its initial public offering (IPO), which could arrive in the weeks ahead and value the company at at least $2 trillion. That would be the largest IPO on record, surpassing that of SpaceX. That company achieved the biggest-ever first-time sale when it raised $75 billion at the outset, and later upped that figure to $86.2 billion with an overallotment option. In other AI news, PYMNTS wrote last week about new research showing that Gen Z workers made up 69% of new hires for two of the highest-paying individual roles in AI last year, forward-deployed engineers and AI engineers. At the same time, 91% of AI workers hold at least a bachelor's degree, a share that surpasses 95% in many of the highest-paying AI jobs. "What emerges is a labor market splitting in two directions. A narrow group of young, technically fluent workers is being promoted faster and paid more than any previous generation at the same career stage," the report said. "Everyone else, including many young workers without a technical degree or specific AI skills, is competing for a shrinking supply of the entry-level roles that used to be everyone's way in." For all PYMNTS AI coverage, subscribe to the daily AI Newsletter.
Meta Platforms (META) Undercuts Anthropic and OpenAI on Price With New Coding Agent
On August 5, Meta Platforms, Inc. (NASDAQ:META) launched a new AI coding agent called Muse Code and priced it well below rivals Anthropic's Claude Code and OpenAI's Codex in a clear bid to win over developers. The release landed the same week. Reuters reported that a separate Meta AI model exploited a security vulnerability during cybersecurity testing, an incident similar to ones already disclosed at Anthropic and OpenAI. Why Meta Is Racing to Prove AI Pays Off Muse Code comes in two pricing tiers: one matches Meta Platforms, Inc. (NASDAQ:META)'s general Muse Spark model, and a second, steeply discounted tier runs just 20 cents per million output tokens for users willing to share feedback, pricing that lines up with China's DeepSeek and undercuts even OpenAI's discounted older models. Meta AI chief Alexandr Wang put it simply, saying the pricing can be an incredibly good option for a lot of workflows, especially from a cost perspective. The stakes here are real. Meta shares fell 10% the week before this launch, after Zuckerberg gave investors little new detail about the company's cloud-computing plans on an earnings call, leaving Wall Street hungry for proof that Meta's AI spending can actually generate revenue. Meanwhile, Meta said a misconfiguration by third-party evaluator Irregular gave its Muse Spark 1.1 model unintended internet access during testing. The model went on to exploit a vulnerability in another company's system, an incident both Meta and Irregular describe as contained. Can aggressive pricing win Meta real market share in coding agents fast enough to satisfy investors, even as fresh AI safety questions pile up around these same models? The Bull Case Muse Code ranked second on the Terminal-Bench 2.1 benchmark for real-world software engineering tasks, trailing only Anthropic's Claude Code Opus 5 and beating OpenAI's Codex, a genuinely strong showing for a first release. Meta Platforms, Inc. (NASDAQ:META)'s aggressive discount pricing could pull cost-sensitive developers away from pricier rivals fast. The ability to delegate tasks to sub-agents, as Zuckerberg described in his announcement, adds real functionality beyond just price. Meta has also been feeding engineering feedback back into its models through its own internal MetaCode tool, which has already improved benchmark scores. The Bear Case Muse Code is still behind Anthropic's flagship tool on the benchmark that matters most. Investors are already concerned that Meta Platforms, Inc. (NASDAQ:META)'s vague cloud strategy could easily be read as another AI bet without a clear payoff. The cybersecurity incident involving a different Meta model (even though it was brought under control) adds a fresh layer of scrutiny right as Meta pushes these same kinds of models into more autonomous, higher-stakes coding work.
OpenAI Is Adding Business Users Faster Than Anthropic. That May Matter More Than Valuation
Two months after losing its status as the artificial intelligence tool of choice among American businesses, OpenAI is regaining ground on Anthropic. The latest data from the corporate expense management company Ramp shows that spending on the ChatGPT maker's products by business customers is growing 82 percent quarter over quarter, versus 76 percent for Anthropic. Anthropic overtook OpenAI among Ramp's paying business customers for the first time in May, capturing a 41 percent market share compared with OpenAI's 39 percent. As of July, Anthropic's share had increased to nearly 44 percent, while OpenAI's rose to almost 40 percent. But the numbers indicate a shift in momentum. "Why?" Ramp Lead Economist Ara Kharazian wrote on X. OpenAI's GPT-5.6 Sol "is really good, increasingly the choice for developers. [Anthropic's Claude] Fable 5, meanwhile, disappointed both in adoption and real-world application given price + data retention requirements imposed by regulators." OpenAI's rebound may also be linked to the company's decision to dramatically lower the cost of its two newest models just three weeks after their release. Luna's price was slashed 80 percent, to 20¢ for 1 million input tokens and $1.20 for 1 million output tokens. Terra prices were reduced by 20 percent, to $2 for 1 million input tokens and $12 for 1 million output tokens. "Businesses are willing to flop back and forth as each lab releases new models," TechCrunch reported, adding that the volatility "should give both companies' investors pause about how 'sticky' enterprise spending really is."
Anthropic IPO could soar past record-breaking SpaceX
The market debut of artificial intelligence start-up Anthropic, a chief rival to OpenAI, could break the record set by SpaceX, US media have reported. Elon Musk's space company went public in June at a value of US$1.77 trillion and raised US$85.7 billion in its blockbuster initial public offering, the largest in history. Anthropic, maker of the Claude AI models, "expects to match or beat the size" of SpaceX's deal, according to Bloomberg. The company's bankers have told potential investors it could seek to raise "more than US$100 billion" in its IPO, which could put the company's value at US$2 trillion, The New York Times reported on Friday, citing two unnamed sources with knowledge of the talks. That would more than double the five-year-old company's previous valuation at US$965 billion, reached in its last funding round in June. Only a handful of companies including Apple, Microsoft and chip maker Nvidia have surpassed the US$2 trillion mark. Anthropic declined AFP's request for comment. After filing to go public in June, the company could reveal its public offering prospectus in the coming weeks, the Times reported, with shares possibly listed in the autumn. Anthropic could then beat OpenAI, the maker of ChatGPT, to market. That company is hoping to list its shares in 2027. (AFP)
Cisco & Cerebras Orders Up, Stocks Down
In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Matt Frankel, and Jon Quast discuss: * Cisco earnings. * Strong hardware, weak software. * Cerebras, making sense of its confusing earnings. * Can innovations like Cerebras threaten the AI incumbents? * Hidden Gems earnings lightning round. To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue " A full transcript is below. Should you buy stock in Cisco Systems right now? Before you buy stock in Cisco Systems, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Cisco Systems wasn't one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $429,223!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,318,055!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks " *Stock Advisor returns as of August 22, 2026. This podcast was recorded on Aug. 13, 2026. Tyler Crowe: The wild ups and downs of earnings season continues. Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe, and today I'm joined by longtime Fool contributors, Jon Quast and Matt Frankel. Guys, it has been a wild up and down of the second quarter. Look, we could go into the several reasons, and maybe once the earning season dies down, we'll really do a postmortem of why this seems to be happening more with the AI trade recently and the volatility of the recent stock market. But we're a little busy with earnings right now. We had a couple of big earnings reports. We had Cisco, we had Cerebras, which is a new IPO, a lot of investor excitement around that. Then we really dug into some under-the-radar stocks, doing a little bit of a lightning round, letting us indulge our analyst tendencies a little bit here. But let's start with Cisco. Shares of Cisco are down 7.4% as we record. Considering the moves we've seen so far in the second quarter, that's actually a rather mild reaction for the stock. As with anything that's selling equipment to data centers and AI, sales growth looked great. But it seems as though the fly in the soup was related to service revenue, which came in a little lower than expected. Matt, to start with you. What stood out in the report?
Cisco & Cerebras Orders Up, Stocks Down
In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Matt Frankel, and Jon Quast discuss: * Cisco earnings. * Strong hardware, weak software. * Cerebras, making sense of its confusing earnings. * Can innovations like Cerebras threaten the AI incumbents? * Hidden Gems earnings lightning round. To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue " A full transcript is below. Should you buy stock in Cisco Systems right now? Before you buy stock in Cisco Systems, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Cisco Systems wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $429,223!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,318,055!* Now, it's worth noting Stock Advisor's total average return is 965% -- a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks " *Stock Advisor returns as of August 22, 2026. This podcast was recorded on Aug. 13, 2026. Tyler Crowe: The wild ups and downs of earnings season continues. Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe, and today I'm joined by longtime Fool contributors, Jon Quast and Matt Frankel. Guys, it has been a wild up and down of the second quarter. Look, we could go into the several reasons, and maybe once the earning season dies down, we'll really do a postmortem of why this seems to be happening more with the AI trade recently and the volatility of the recent stock market. But we're a little busy with earnings right now. We had a couple of big earnings reports. We had Cisco, we had Cerebras, which is a new IPO, a lot of investor excitement around that. Then we really dug into some under-the-radar stocks, doing a little bit of a lightning round, letting us indulge our analyst tendencies a little bit here. But let's start with Cisco. Shares of Cisco are down 7.4% as we record. Considering the moves we've seen so far in the second quarter, that's actually a rather mild reaction for the stock. As with anything that's selling equipment to data centers and AI, sales growth looked great. But it seems as though the fly in the soup was related to service revenue, which came in a little lower than expected. Matt, to start with you. What stood out in the report? Matt Frankel: About 85% of the companies in the S&P 500 have beat earnings expectations this quarter. It begs the question, why do we have earnings expectations at this point? But an earnings beat alone isn't enough to move the needle, it seems, this quarter. Even a beaten raise is not enough to move the needle here. Cisco itself has now beaten earnings estimates for the past five quarters in a row, so it's just expected at this point. The AI story was impressive. The latest guidance, which was already revised upward several times, was calling for about nine billion dollars in AI orders this year, and Cisco produced 9.3 billion. But honestly, that's not as impressive of a beat as we've seen Cisco make in recent quarters. Remember their original guidance was for $5 billion. They beat that through three quarters. That was an impressive beat. Maybe the market's starting to think that the growth is appropriately priced in. Future revenue growth could be a lot stronger than the numbers suggest. Cisco's product orders in Q4 grew by 35% year over year compared with just an 18% revenue growth rate. That implies we might see an acceleration coming up. Notably, though, management didn't provide new guidance for that AI order number. I was certainly looking for that for the 2027 fiscal year, and I have to believe many investors were, as well. Even after today's reaction, Cisco is trading for about 40 times earnings, and it's still within a few percentage points if it's all time high. It seems the beaten raise it just simply didn't live up to expectations, but all in all, a very solid quarter. Jon Quast: What decade is it? Cisco, this is incredible revenue growth, and it's not just revenue growth that stood out for me, Tyler. It's also the earnings growth. We did have the 12% top line growth for the whole year. But you look at the earnings per share growth. That's profit minus the share account divided over the share account, 31% growth for earnings per share. That is a good sign when earnings per share are growing faster than revenue. Then, for the upcoming year also expecting maybe 16% revenue growth, so a slight acceleration into the coming year, but then also that earnings per share growth, once again, projecting better than 20% growth for the earnings in the upcoming year. Yes, Matt is right. It is trading at a premium valuation at 37 times earnings. That said, the top-line growth is great. The profit growth is even better, and the strong demand that it is seeing certainly helps with that profitability. That's what stood out to me. Tyler Crowe: For what it's worth, forward estimates have it at about a price-to-earnings of about 26. But as Matt said, everyone's beating expectations all the time, so maybe that's even sandbagging it a little bit here, doing the dog-and-pony show of earnings expectations and all that stuff. Now, look, the stock is down, so I did try to dig and be like, well, why is that? Everything you guys mentioned all seems pretty good. Something that stood out was the remaining performance obligations. RPOs, if you want to use cool kid jargon, it grew about 7% in the most recent quarter. Compared to other AI hardware and software companies, that is rather light. As much as there is demand, and it is incredibly fierce demand. At the same time, competition in this industry is getting stronger, as well as new technologies are coming out that could somewhat displace a little bit of what Cisco may be doing. My question to you guys was seeing those RPO numbers maybe being a little bit more tepid. Is this a case where Cisco may be losing shares to the Arista Networks or someone else in this industry that I might not be considering. Jon Quast: Well, I think we need to be very careful looking at the percentage numbers when it comes to Cisco, especially in comparison to other companies that are reporting percentages. You think about Cisco, and the reason I did jokingly say, what decade is this is that this is a legacy business. This company has been around a while, already generates more than $60 billion in annual revenue. This is a very large business, and many of Cisco's customers are more of these legacy customers. There is a component here that you're remaining performance obligations, if they're being driven by AI, that's going to be somewhat lost in the overall mix of the business because it has so many legacy customers. Whereas maybe a more pure-play competitor isn't going to experience that, so the percentage numbers are going to look a lot different. I think we need to be careful from drawing too many conclusions with that. If we can just zoom out, I think from a Hidden Gems Investing perspective, we are looking for not necessarily a hidden company, but something hidden in the business analytics that maybe people are overlooking for this reason or the other, that we're looking for something hidden that contribute to a stock performing well over time, I want to give Dell as an example here. Just a couple of years ago, Dell's AI server numbers were just a very small percentage of the business, but they were really starting to uptick really rapidly. You could start seeing that, hey, Dell is this huge legacy business, but all of a sudden becoming an AI player. Now that stock is up nearly 800% in just three years, but some of the signs were there earlier for those who were going to dig beneath the surface. I think that, that generally speaking, can be the case. When you see a legacy business that's all of a sudden benefiting from some booming industry, it might be getting lost. Those numbers, that narrative might be getting lost in the mix. Taking some time, digging deeper beneath the surface can sometimes yield something really important from a Hidden Gems perspective. I'd say for Cisco, don't dismiss it. We are looking at AI infrastructure orders up nearly 400% year over year, and it's fiscal 2026, looking for nearly 90% growth in those AI infrastructure orders in the coming year. That is hidden beneath the surface, and it's worth paying attention to. Matt Frankel: To unpack your question a little bit more, Tyler, Cisco was losing to Arista at first when the AI boom first came up. Then they made a really smart decision to unbundle their full hardware stack, meaning that Cisco chips could be installed in devices they didn't make. That really helped them gain ground. You're right. The RPO looks like. But Cisco's RPO is majority made up of software renewals, the legacy business Jon was talking about. As Jon said, for now, AI is just a small percentage of what it does. The orderbook grew sharply, as I mentioned, 35% year over year, and that doesn't show up mostly in the RPO numbers because Cisco is shipping these products honestly too quick for them to just sit on the backlog. Arista is growing faster than Cisco right now, if you look at just the top line. But it's really a case of pure play versus conglomerate. It'd be comparing Berkshire Hathaway to a pure-play energy company when you're looking at energy growth. The company's order book shows that it is still gaining AI traction, as Jon just mentioned. Their blended growth looks slower for sure, but right now, the rising hit is lifting all shifts in AI network. Tyler Crowe: Well, hopefully, we'll have a repeat performance from Cisco that we saw from Dell over the past three years. It's certainly trending that way with the stock up 62% over the past year. Maybe 7% seems pretty small pennies by comparison. Coming up to the break, we're going to look into Cerebras' earnings. ADVERTISEMENT: You just found out that your sales team is at risk of missing quota. Don't panic, just ask Rippling AI. Since it's built on your real-time people and business data, Rippling AI can pull metrics from Rippling and Salesforce into a meeting-ready dashboard showing quota attainment, headcount plan, and monthly revenue to quota by region. In seconds, you'll see exactly what's behind your quota risk and fix it before it's missed. 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Superhuman Go gives you those hours back. From the makers of Grammarly, Go is an AI chat that sits inside every tab and tool you already use. Always available and ready to help you with what you're working on. Ask it to draft something, summarize a long thread, pull up a file, or prep you for a meeting. Go handles it without you ever leaving the page you're on. This is what it looks like when AI actually fits into your work instead of adding to it. It's like having a teammate whose only job is to help you be better at yours. Go keeps up so you can move forward. With Go working with you, you can show off what you do best. See what Superhuman Go can do at superhuman.com. That's superhuman.com. Tyler Crowe: I got to admit, in between segments, I realized I made a bit of a mistake. It is not Cerebras, apparently. I stay working from home way too much and don't get out and hear other people talking. Cerebras Systems is the company we're going to be talking about. This is what I get for not listening on the conference calls again. Everyone can make fun of me in the comments for mispronouncing this company's name. Makes me look like I don't know what I'm talking about. But well, we're going to do it anyways. The funny thing is here is, this is a company, it's gotten a lot of Wall Street and investor buzz, and it's not having a great day on Wall Street. Company reported earnings that were after the close yesterday, and the stocks down about 13% as we're taping. This is a novel concept for computing an inference that recently went public. Guys, what did Cerebras Systems report say, and what were your reactions? Jon Quast: Well, look, Tyler, everything about this company is confusing, from what it does to how it reports its numbers, apparently, to how its name is pronounced. Investors can be forgiven here if they needed a minute just to take some time and process what this report was all about. Matt Frankel: At the core, the idea behind this business is simple. They build larger chips than any of the other ones that essentially take the place of several Nvidia chips and other components being networked together. That's the idea. It would take less power, lower latency, things like that. The two revenue numbers in the report are uniquely confusing. They report GAAP revenue, which is what we all expect, and then a number called core revenue, which is actually not only different but higher. That could be confusing to investors. GAAP revenue grew 74%, but that missed estimates. Cerebras' core revenue more than doubled and beat management's own guidance. Now, their core revenue, it excludes the impact of warrants that the company issues to some of its largest customers, specifically OpenAI. Accounting rules say that you have to account for the value of those warrants and subtract them from your revenue. It's not really a revenue hit, which is why they choose to report core revenue, but it's confusing. During the quarter, the revenue mix shifted toward Cloud revenue away from hardware, driven by its OpenAI deployments, while hardware revenue actually fell by 23%, so that could right there tell you why the stock fell. Their core gross margins, or because of some other factors, fell by nearly six percentage points. It's temporarily renting back some of the hardware previously sold. Management said Q3 should be the low point for margins, and it should come up. But with the money-losing business that a lot of people don't really understand the accounting behind and things like that, it just adds to the confusion. Cerebras' bulkase it's got over a $25 billion backlog. It has nearly $9 billion dollars of cash on its balance sheet, and management specifically said, and I'm quoting, "that AI demand is through the roof, and revenue will triple year over year in 2027." This is a business that investors understandably simply seem to be having a tough time wrapping their heads around, and I really don't blame them with a revenue miss, margin issues, and a net loss that was surprisingly not great. I'm not terribly surprised that the stock fell in reaction to this quarter's report. Jon Quast: You look at the guidance, and I do want to just correct the record here from some of the chatter I've seen on social media, some investors out there saying, Cerebras is intending to 10X its revenue in the coming year. That is not what the company said. Matt pointed out the correct number. It expects to triple its revenue year over year in the coming year, which would be absolutely incredible, and I wish him well. But the 10X number, that is for the manufacturing. This is a fabulous semiconductor company, which means it doesn't make its own stuff. That is made by other companies, specifically, Taiwan Semiconductor is the supplier here. That 10X number is from its partners saying that they're going to increase the manufacturing. You look at Taiwan Semiconductor, it's a pretty conservative company, so I do think that in a way, this is a vote of confidence to dedicate some energy to making sure that it can 10X the supply of Cerebras' products. But I do want to point out the difference here. The revenue we're talking core revenue not actual revenue. The core revenue looking to triple, but the manufacturing looking to 10X, there's going to be, then that is a huge expected increase of revenue ongoing beyond the coming year. Tyler Crowe: Jon, I'm shocked to discover that things that are said on social media aren't necessarily correct. Look, Cerebras hits at one of the challenges that I have been struggling with to work through with all of this AI spending, AI infrastructure build-out stuff. It claims it's AI chips, which look closer to the size of bathroom floor tiles than what we would normally see in CPUs or GPOs. They claim they're faster. They have higher on chip memory. They require less power than current offerings. If it is as powerful as it claims, whether that's true or not, it remains to be seen, I would, in theory, solve a lot of the problems we see with memory and electricity demand because we can do more with less. One of the things I've always said is with the current spending and the trajectory of what we have with the equipment we have, it's not going to work because it just will take too much power, basically. To me this seems to undermine a case for some of the biggest winners so far, like Nvidia some of the memory ship members, and we can even go further down the AI infrastructure chain of, like, maybe we just need a couple fewer data centers of the line here. Do you agree with this, or am I perhaps reading it wrong? Matt Frankel: It certainly feels Cerebras is doing more with less should hurt Nvidia and the memory companies and the other chipmakers. But so far in this cycle of AI adoption, every single efficiency gain we've seen has just expanded the appetite overall. In other words, right now, there's so much demand that both Cerebras and Nvidia can grow exponentially. Nvidia might be nearing the end of its exponential growth because its revenue is more than Walmart, not really but getting close. But right now cheaper AI has meant more AI, not less, and the disruption is real. But the fact that Cerebras is relatively tiny compared to Nvidia and has some margin issues of its own and production issues and ramp up issues, it really shows in Nvidia's moat right now. I don't think Nvidia should be too worried for the time being, and Nvidia is not exactly just laying down and letting themselves be disrupted. They have a much deeper pockets than even Cerebras for innovation. I don't think they should be too worried. Jon Quast: I don't think it's as simple as saying Nvidia versus Cerebras. I think the answer is much more complicated and nuanced than that because of how they actually work in the real world. Nvidia, of course, with its graphics processing units, GPUs, by the way, Nvidia didn't invent those for AI. They preexist the current boom in AI. The reason that they were adopted into AI, specifically training, was because they were very good at general-purpose activities. What Cerebras is building is an ASIC. This is a custom thing. This is very good at a specialized activity and specifically inference, but for specific configurations. This is why it's partnered with OpenAI, for example, so that OpenAI can partner with Cerebras for certain configurations for its custom hardware option. You look at that, you're basically answering a question between generalization and specialization. Is all of the AI out there going to start specializing, and that is going to give greater rise to a player such as Cerebras, or are all of these software products out there are going to say more general purpose, in which case that favors a more general hardware option? I don't know if that's an easy question to answer. I think that my answer is probably both. I think that you're going to see a rise generally speaking, and that's going to be good for GPUs. But I do think that you're going to start seeing some specialization and that's going to give rise to some niche markets that Cerebras can fill. The question then becomes, how big are those niches? Tyler Crowe: It certainly going to be the battle of the AI data enter space over the next couple of years as these models become more powerful and more stuff is custom built for these models. It's coming up after the break. We're going to indulge our analyst tendencies a little bit and do a lightning round of earnings so far this quarter. Jon, in our first segment, you were mentioning the Hidden Gems being the hidden assets of companies, and part of Hidden Gems Investing style isn't just obscure companies, but there is also the hidden aspect where it is hidden companies, maybe off not the companies most people would think of. We've been getting a lot of feedback from listeners that we should probably indulge in a classical Hidden Gems part of the phrase and indulge a little bit more here. We're going to do basically the stock market equivalent of some deep cut or live album indie band stuff for this lightning round here. Earnings are starting to wind down, and so we're doing a lightning round of under-the-radar earnings reports. The companies that we love, we don't get to talk them much about. Guys, you get to go full stock market sicko here. What do you want to highlight? Jon, we'll start with. Jon Quast: I love highlighting Xometry. Anytime I get a chance, that is ticker symbol XMTR. This is a company that I was fortunate enough to find when it was trading down in the teens, now up in the 90s, but this is a company for most people who don't know what this company does. Think of all your custom manufacturing that exists in the world. Most of that is offline. Most of that you need to be close to a shop. You need to email them if you need something made, manufactured, you need some bolts made, whatever. You have to then talk to them on email maybe, or just go into the shop, and it's got to be close to where you need the product. Xometry changes that by creating basically the ecommerce of custom manufacturing, and what its secret sauce is, is basically you submit your plans through the Xometry portal and it is able to give you through AI instant pricing. It prices the job instantly, and you can take it or leave it. Lead times are cut drastically down, and then it shops out its bid to these custom manufacturers who can actually do the work. It chops it out at a slightly different price. The spread is what its revenue, what its profit is. It's not ever going to be a great gross margin business necessarily, but the revenue growth and the case for this, I think is huge, and the top line growth is showing up 41% in the most recent quarter. Last week that it reported it has reported four straight quarters of accelerating growth right now. One of the things that attracted me to Xometry early on, it's not the first company to try this, but the user growth has been just fantastic. Active buyers on the platform up 20% in the most recent quarter, record new addition. The adoption curve is what showed me that this could be a winner long-term. Still less than 1% penetrated into its total addressable market. But what I think could be huge here is it just partnered with Siemens. This is a company that helps automakers and airlines start to plan out their products and draw it all up, design the products that they need. Integration with Xometry now helps them have pricing in real time. Then, when they get everything just the way that they want, they can basically hit a buy button, and now all of a sudden, that is being shopped out on the Xometry platform. I think that this could be a huge adoption driver long term. Xometry is a company that I'm happy to highlight. Matt Frankel: I wanted to bring up a fintech company, a surprise that I haven't talked about in a while. It's called Marqeta, ticker symbol is MQ. They're known for providing third-party payment infrastructure for other companies. Most notably, their biggest customer is Block. They provide the card payment infrastructure for Cash App. That makes up a little over 41% of their revenue, but that's down significantly. It was 46% a year ago. It was the majority of their income a couple years ago. They got some much-needed diversification, and I really wanted to highlight this one because it feels like they've turned a corner profitability-wise. A total payment volume of $120 billion. That was up 32% year over year, the fourth straight quarter where that growth rate was above 30%. Not just that, they actually had positive net income on a GAAP basis, not just on an adjusted basis or something like that. The second quarter since they've turned profitable, adjusted EBITDA margin is now at 21% in climbing, they're buying back shares because they think it's cheap. Marqeta had its struggles. It actually did a reverse split not that long ago because it had been beaten down. This was a COVID-era IPO. The stock was down on this report due to a accelerating growth forecast. A lot of that's because Cash App is not an accelerating source of growth for them anymore. It's very cheaply valued on a price to sales ratio historically for this stock. The question is long term, can it keep those growth rates up while diversifying away from Block? That remains to be seen. That's why it's cheap, but it's one that's definitely back on my radar right now. Tyler Crowe: Well, I went through my Rolodex, trying to find the obscure stock I wanted to go through, and I saw that BBB Foods, ticker TBBB reported today, and the stocks up 15%. I was like, well, I just got to cover this one. For those who may have not have heard this company, it is a hard discount grocery retailer. Think like Aldi, maybe Lidl, if you live in Europe, that no-frills, not a lot of decoration. Just moving product as quickly you can at a relatively low price. This company is completely based in Mexico, has about 3,000 stores. For the quarter, sales were up 38.7% year over year, and same-store sales growth. The comps basically at the existing stores was up 20%, which I think was absolutely incredible. I haven't seen a lot of retailers these days putting up same-store sales memories like that. Store account growth was about 9%. They added about 125 new locations in the quarter, puts them on pace for about 500, 5,600 they want to put in this year? It sounds a lot, but with 3,200 so far, they're aiming for 14,000 total all across Mexico, so there's a lot of left to growth there. What was surprising to me. Again, they're growing really fast, and despite the high investment levels, they're generating free cash flow, basically because they're moving products so quickly. Again, that rapid same-store sales growth. They're generating free cash flow. It's just the turnover this company has been absolutely incredible, they're generating immense amounts of free cash for what is a relatively small start-up Mexican grocery retailer. I fell in love with this company when I read the IPO prospectus a couple of years ago, bought shares, and I've been delighted with this success so far. Hopefully, and we can make this a tradition of every earnings report we get to indulge in the obscure stocks that we love to follow every once in a while, and hope the listeners enjoyed it, as well. But that is all the time we have for today. Matt, Jon, thanks for your insights. I'm going to hit "Disclosure" and we'll get out of here. As always, people in the program may have interest in the stocks to talk about, and The Motley Fool may have recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards, and it's not approved by advertisers. Advertisements are sponsored content and provide for informational purposes only. See our full advertising disclosure, please check out our shown out. Thanks to you producer Bart Shannon and the rest of The Motley Fool team. Jon, Matt, and myself, thanks for listening, and we'll chat again soon. Jon Quast has positions in Xometry. Matt Frankel, CFP® has positions in Berkshire Hathaway and Block. Tyler Crowe has positions in BBB Foods and Berkshire Hathaway. The Motley Fool has positions in and recommends Arista Networks, BBB Foods, Berkshire Hathaway, Block, Cisco Systems, Nvidia, Taiwan Semiconductor Manufacturing, Walmart, and Xometry. The Motley Fool recommends Marqeta. The Motley Fool has a disclosure policy.
Cisco & Cerebras Orders Up, Stocks Down
In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Matt Frankel, and Jon Quast discuss: * Cisco earnings. * Strong hardware, weak software. * Cerebras, making sense of its confusing earnings. * Can innovations like Cerebras threaten the AI incumbents? * Hidden Gems earnings lightning round. To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy. A full transcript is below. This podcast was recorded on Aug. 13, 2026. Tyler Crowe: The wild ups and downs of earnings season continues. Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crowe, and today I'm joined by longtime Fool contributors, Jon Quast and Matt Frankel. Guys, it has been a wild up and down of the second quarter. Look, we could go into the several reasons, and maybe once the earning season dies down, we'll really do a postmortem of why this seems to be happening more with the AI trade recently and the volatility of the recent stock market. But we're a little busy with earnings right now. We had a couple of big earnings reports. We had Cisco, we had Cerebras, which is a new IPO, a lot of investor excitement around that. Then we really dug into some under-the-radar stocks, doing a little bit of a lightning round, letting us indulge our analyst tendencies a little bit here. But let's start with Cisco. Shares of Cisco are down 7.4% as we record. Considering the moves we've seen so far in the second quarter, that's actually a rather mild reaction for the stock. As with anything that's selling equipment to data centers and AI, sales growth looked great. But it seems as though the fly in the soup was related to service revenue, which came in a little lower than expected. Matt, to start with you. What stood out in the report? Matt Frankel: About 85% of the companies in the S&P 500 have beat earnings expectations this quarter. It begs the question, why do we have earnings expectations at this point? But an earnings beat alone isn't enough to move the needle, it seems, this quarter. Even a beaten raise is not enough to move the needle here. Cisco itself has now beaten earnings estimates for the past five quarters in a row, so it's just expected at this point. The AI story was impressive. The latest guidance, which was already revised upward several times, was calling for about nine billion dollars in AI orders this year, and Cisco produced 9.3 billion. But honestly, that's not as impressive of a beat as we've seen Cisco make in recent quarters. Remember their original guidance was for $5 billion. They beat that through three quarters. That was an impressive beat. Maybe the market's starting to think that the growth is appropriately priced in. Future revenue growth could be a lot stronger than the numbers suggest. Cisco's product orders in Q4 grew by 35% year over year compared with just an 18% revenue growth rate. That implies we might see an acceleration coming up. Notably, though, management didn't provide new guidance for that AI order number. I was certainly looking for that for the 2027 fiscal year, and I have to believe many investors were, as well. Even after today's reaction, Cisco is trading for about 40 times earnings, and it's still within a few percentage points if it's all time high. It seems the beaten raise it just simply didn't live up to expectations, but all in all, a very solid quarter. Jon Quast: What decade is it? Cisco, this is incredible revenue growth, and it's not just revenue growth that stood out for me, Tyler. It's also the earnings growth. We did have the 12% top line growth for the whole year. But you look at the earnings per share growth. That's profit minus the share account divided over the share account, 31% growth for earnings per share. That is a good sign when earnings per share are growing faster than revenue. Then, for the upcoming year also expecting maybe 16% revenue growth, so a slight acceleration into the coming year, but then also that earnings per share growth, once again, projecting better than 20% growth for the earnings in the upcoming year. Yes, Matt is right. It is trading at a premium valuation at 37 times earnings. That said, the top-line growth is great. The profit growth is even better, and the strong demand that it is seeing certainly helps with that profitability. That's what stood out to me. Tyler Crowe: For what it's worth, forward estimates have it at about a price-to-earnings of about 26. But as Matt said, everyone's beating expectations all the time, so maybe that's even sandbagging it a little bit here, doing the dog-and-pony show of earnings expectations and all that stuff. Now, look, the stock is down, so I did try to dig and be like, well, why is that? Everything you guys mentioned all seems pretty good. Something that stood out was the remaining performance obligations. RPOs, if you want to use cool kid jargon, it grew about 7% in the most recent quarter. Compared to other AI hardware and software companies, that is rather light. As much as there is demand, and it is incredibly fierce demand. At the same time, competition in this industry is getting stronger, as well as new technologies are coming out that could somewhat displace a little bit of what Cisco may be doing. My question to you guys was seeing those RPO numbers maybe being a little bit more tepid. Is this a case where Cisco may be losing shares to the Arista Networks or someone else in this industry that I might not be considering. Jon Quast: Well, I think we need to be very careful looking at the percentage numbers when it comes to Cisco, especially in comparison to other companies that are reporting percentages. You think about Cisco, and the reason I did jokingly say, what decade is this is that this is a legacy business. This company has been around a while, already generates more than $60 billion in annual revenue. This is a very large business, and many of Cisco's customers are more of these legacy customers. There is a component here that you're remaining performance obligations, if they're being driven by AI, that's going to be somewhat lost in the overall mix of the business because it has so many legacy customers. Whereas maybe a more pure-play competitor isn't going to experience that, so the percentage numbers are going to look a lot different. I think we need to be careful from drawing too many conclusions with that. If we can just zoom out, I think from a Hidden Gems Investing perspective, we are looking for not necessarily a hidden company, but something hidden in the business analytics that maybe people are overlooking for this reason or the other, that we're looking for something hidden that contribute to a stock performing well over time, I want to give Dell as an example here. Just a couple of years ago, Dell's AI server numbers were just a very small percentage of the business, but they were really starting to uptick really rapidly. You could start seeing that, hey, Dell is this huge legacy business, but all of a sudden becoming an AI player. Now that stock is up nearly 800% in just three years, but some of the signs were there earlier for those who were going to dig beneath the surface. I think that, that generally speaking, can be the case. When you see a legacy business that's all of a sudden benefiting from some booming industry, it might be getting lost. Those numbers, that narrative might be getting lost in the mix. Taking some time, digging deeper beneath the surface can sometimes yield something really important from a Hidden Gems perspective. I'd say for Cisco, don't dismiss it. We are looking at AI infrastructure orders up nearly 400% year over year, and it's fiscal 2026, looking for nearly 90% growth in those AI infrastructure orders in the coming year. That is hidden beneath the surface, and it's worth paying attention to. Matt Frankel: To unpack your question a little bit more, Tyler, Cisco was losing to Arista at first when the AI boom first came up. Then they made a really smart decision to unbundle their full hardware stack, meaning that Cisco chips could be installed in devices they didn't make. That really helped them gain ground. You're right. The RPO looks like. But Cisco's RPO is majority made up of software renewals, the legacy business Jon was talking about. As Jon said, for now, AI is just a small percentage of what it does. The orderbook grew sharply, as I mentioned, 35% year over year, and that doesn't show up mostly in the RPO numbers because Cisco is shipping these products honestly too quick for them to just sit on the backlog. Arista is growing faster than Cisco right now, if you look at just the top line. But it's really a case of pure play versus conglomerate. It'd be comparing Berkshire Hathaway to a pure-play energy company when you're looking at energy growth. The company's order book shows that it is still gaining AI traction, as Jon just mentioned. Their blended growth looks slower for sure, but right now, the rising hit is lifting all shifts in AI network. Tyler Crowe: Well, hopefully, we'll have a repeat performance from Cisco that we saw from Dell over the past three years. It's certainly trending that way with the stock up 62% over the past year. Maybe 7% seems pretty small pennies by comparison. Coming up to the break, we're going to look into Cerebras' earnings. ADVERTISEMENT: You just found out that your sales team is at risk of missing quota. Don't panic, just ask Rippling AI. Since it's built on your real-time people and business data, Rippling AI can pull metrics from Rippling and Salesforce into a meeting-ready dashboard showing quota attainment, headcount plan, and monthly revenue to quota by region. In seconds, you'll see exactly what's behind your quota risk and fix it before it's missed. Question answered, action taken, crisis averted. When you have critical business questions that need answers, don't just file a ticket and wait weeks for an outdated report. Describe what you need and have Rippling AI build it instantly from your live people and business data, whether it's a dashboard with detailed charts or automated workflows with the right triggers, conditions, and approvals. Ready to rule your business, head to rippling.ai/fool to get the only AI built to give you full visibility and take complex actions across your entire organization. That's rippling.ai/fool. Sign up for exclusive access today rippling.ai/fool. ADVERTISEMENT: The people who seem to get more done than everyone else, they're not working longer hours or running on more caffeine. They've just stopped wasting time on the stuff that doesn't move work forward. Switching apps, re-explaining context, hunting for files. Those aren't small inefficiencies. There hours wasted every week. Superhuman Go gives you those hours back. From the makers of Grammarly, Go is an AI chat that sits inside every tab and tool you already use. Always available and ready to help you with what you're working on. Ask it to draft something, summarize a long thread, pull up a file, or prep you for a meeting. Go handles it without you ever leaving the page you're on. This is what it looks like when AI actually fits into your work instead of adding to it. It's like having a teammate whose only job is to help you be better at yours. Go keeps up so you can move forward. With Go working with you, you can show off what you do best. See what Superhuman Go can do at superhuman.com. That's superhuman.com. Tyler Crowe: I got to admit, in between segments, I realized I made a bit of a mistake. It is not Cerebras, apparently. I stay working from home way too much and don't get out and hear other people talking. Cerebras Systems is the company we're going to be talking about. This is what I get for not listening on the conference calls again. Everyone can make fun of me in the comments for mispronouncing this company's name. Makes me look like I don't know what I'm talking about. But well, we're going to do it anyways. The funny thing is here is, this is a company, it's gotten a lot of Wall Street and investor buzz, and it's not having a great day on Wall Street. Company reported earnings that were after the close yesterday, and the stocks down about 13% as we're taping. This is a novel concept for computing an inference that recently went public. Guys, what did Cerebras Systems report say, and what were your reactions? Jon Quast: Well, look, Tyler, everything about this company is confusing, from what it does to how it reports its numbers, apparently, to how its name is pronounced. Investors can be forgiven here if they needed a minute just to take some time and process what this report was all about. Matt Frankel: At the core, the idea behind this business is simple. They build larger chips than any of the other ones that essentially take the place of several Nvidia chips and other components being networked together. That's the idea. It would take less power, lower latency, things like that. The two revenue numbers in the report are uniquely confusing. They report GAAP revenue, which is what we all expect, and then a number called core revenue, which is actually not only different but higher. That could be confusing to investors. GAAP revenue grew 74%, but that missed estimates. Cerebras' core revenue more than doubled and beat management's own guidance. Now, their core revenue, it excludes the impact of warrants that the company issues to some of its largest customers, specifically OpenAI. Accounting rules say that you have to account for the value of those warrants and subtract them from your revenue. It's not really a revenue hit, which is why they choose to report core revenue, but it's confusing. During the quarter, the revenue mix shifted toward Cloud revenue away from hardware, driven by its OpenAI deployments, while hardware revenue actually fell by 23%, so that could right there tell you why the stock fell. Their core gross margins, or because of some other factors, fell by nearly six percentage points. It's temporarily renting back some of the hardware previously sold. Management said Q3 should be the low point for margins, and it should come up. But with the money-losing business that a lot of people don't really understand the accounting behind and things like that, it just adds to the confusion. Cerebras' bulkase it's got over a $25 billion backlog. It has nearly $9 billion dollars of cash on its balance sheet, and management specifically said, and I'm quoting, "that AI demand is through the roof, and revenue will triple year over year in 2027." This is a business that investors understandably simply seem to be having a tough time wrapping their heads around, and I really don't blame them with a revenue miss, margin issues, and a net loss that was surprisingly not great. I'm not terribly surprised that the stock fell in reaction to this quarter's report. Jon Quast: You look at the guidance, and I do want to just correct the record here from some of the chatter I've seen on social media, some investors out there saying, Cerebras is intending to 10X its revenue in the coming year. That is not what the company said. Matt pointed out the correct number. It expects to triple its revenue year over year in the coming year, which would be absolutely incredible, and I wish him well. But the 10X number, that is for the manufacturing. This is a fabulous semiconductor company, which means it doesn't make its own stuff. That is made by other companies, specifically, Taiwan Semiconductor is the supplier here. That 10X number is from its partners saying that they're going to increase the manufacturing. You look at Taiwan Semiconductor, it's a pretty conservative company, so I do think that in a way, this is a vote of confidence to dedicate some energy to making sure that it can 10X the supply of Cerebras' products. But I do want to point out the difference here. The revenue we're talking core revenue not actual revenue. The core revenue looking to triple, but the manufacturing looking to 10X, there's going to be, then that is a huge expected increase of revenue ongoing beyond the coming year. Tyler Crowe: Jon, I'm shocked to discover that things that are said on social media aren't necessarily correct. Look, Cerebras hits at one of the challenges that I have been struggling with to work through with all of this AI spending, AI infrastructure build-out stuff. It claims it's AI chips, which look closer to the size of bathroom floor tiles than what we would normally see in CPUs or GPOs. They claim they're faster. They have higher on chip memory. They require less power than current offerings. If it is as powerful as it claims, whether that's true or not, it remains to be seen, I would, in theory, solve a lot of the problems we see with memory and electricity demand because we can do more with less. One of the things I've always said is with the current spending and the trajectory of what we have with the equipment we have, it's not going to work because it just will take too much power, basically. To me this seems to undermine a case for some of the biggest winners so far, like Nvidia some of the memory ship members, and we can even go further down the AI infrastructure chain of, like, maybe we just need a couple fewer data centers of the line here. Do you agree with this, or am I perhaps reading it wrong? Matt Frankel: It certainly feels Cerebras is doing more with less should hurt Nvidia and the memory companies and the other chipmakers. But so far in this cycle of AI adoption, every single efficiency gain we've seen has just expanded the appetite overall. In other words, right now, there's so much demand that both Cerebras and Nvidia can grow exponentially. Nvidia might be nearing the end of its exponential growth because its revenue is more than Walmart, not really but getting close. But right now cheaper AI has meant more AI, not less, and the disruption is real. But the fact that Cerebras is relatively tiny compared to Nvidia and has some margin issues of its own and production issues and ramp up issues, it really shows in Nvidia's moat right now. I don't think Nvidia should be too worried for the time being, and Nvidia is not exactly just laying down and letting themselves be disrupted. They have a much deeper pockets than even Cerebras for innovation. I don't think they should be too worried. Jon Quast: I don't think it's as simple as saying Nvidia versus Cerebras. I think the answer is much more complicated and nuanced than that because of how they actually work in the real world. Nvidia, of course, with its graphics processing units, GPUs, by the way, Nvidia didn't invent those for AI. They preexist the current boom in AI. The reason that they were adopted into AI, specifically training, was because they were very good at general-purpose activities. What Cerebras is building is an ASIC. This is a custom thing. This is very good at a specialized activity and specifically inference, but for specific configurations. This is why it's partnered with OpenAI, for example, so that OpenAI can partner with Cerebras for certain configurations for its custom hardware option. You look at that, you're basically answering a question between generalization and specialization. Is all of the AI out there going to start specializing, and that is going to give greater rise to a player such as Cerebras, or are all of these software products out there are going to say more general purpose, in which case that favors a more general hardware option? I don't know if that's an easy question to answer. I think that my answer is probably both. I think that you're going to see a rise generally speaking, and that's going to be good for GPUs. But I do think that you're going to start seeing some specialization and that's going to give rise to some niche markets that Cerebras can fill. The question then becomes, how big are those niches? Tyler Crowe: It certainly going to be the battle of the AI data enter space over the next couple of years as these models become more powerful and more stuff is custom built for these models. It's coming up after the break. We're going to indulge our analyst tendencies a little bit and do a lightning round of earnings so far this quarter. Jon, in our first segment, you were mentioning the Hidden Gems being the hidden assets of companies, and part of Hidden Gems Investing style isn't just obscure companies, but there is also the hidden aspect where it is hidden companies, maybe off not the companies most people would think of. We've been getting a lot of feedback from listeners that we should probably indulge in a classical Hidden Gems part of the phrase and indulge a little bit more here. We're going to do basically the stock market equivalent of some deep cut or live album indie band stuff for this lightning round here. Earnings are starting to wind down, and so we're doing a lightning round of under-the-radar earnings reports. The companies that we love, we don't get to talk them much about. Guys, you get to go full stock market sicko here. What do you want to highlight? Jon, we'll start with. Jon Quast: I love highlighting Xometry. Anytime I get a chance, that is ticker symbol XMTR. This is a company that I was fortunate enough to find when it was trading down in the teens, now up in the 90s, but this is a company for most people who don't know what this company does. Think of all your custom manufacturing that exists in the world. Most of that is offline. Most of that you need to be close to a shop. You need to email them if you need something made, manufactured, you need some bolts made, whatever. You have to then talk to them on email maybe, or just go into the shop, and it's got to be close to where you need the product. Xometry changes that by creating basically the ecommerce of custom manufacturing, and what its secret sauce is, is basically you submit your plans through the Xometry portal and it is able to give you through AI instant pricing. It prices the job instantly, and you can take it or leave it. Lead times are cut drastically down, and then it shops out its bid to these custom manufacturers who can actually do the work. It chops it out at a slightly different price. The spread is what its revenue, what its profit is. It's not ever going to be a great gross margin business necessarily, but the revenue growth and the case for this, I think is huge, and the top line growth is showing up 41% in the most recent quarter. Last week that it reported it has reported four straight quarters of accelerating growth right now. One of the things that attracted me to Xometry early on, it's not the first company to try this, but the user growth has been just fantastic. Active buyers on the platform up 20% in the most recent quarter, record new addition. The adoption curve is what showed me that this could be a winner long-term. Still less than 1% penetrated into its total addressable market. But what I think could be huge here is it just partnered with Siemens. This is a company that helps automakers and airlines start to plan out their products and draw it all up, design the products that they need. Integration with Xometry now helps them have pricing in real time. Then, when they get everything just the way that they want, they can basically hit a buy button, and now all of a sudden, that is being shopped out on the Xometry platform. I think that this could be a huge adoption driver long term. Xometry is a company that I'm happy to highlight. Matt Frankel: I wanted to bring up a fintech company, a surprise that I haven't talked about in a while. It's called Marqeta, ticker symbol is MQ. They're known for providing third-party payment infrastructure for other companies. Most notably, their biggest customer is Block. They provide the card payment infrastructure for Cash App. That makes up a little over 41% of their revenue, but that's down significantly. It was 46% a year ago. It was the majority of their income a couple years ago. They got some much-needed diversification, and I really wanted to highlight this one because it feels like they've turned a corner profitability-wise. A total payment volume of $120 billion. That was up 32% year over year, the fourth straight quarter where that growth rate was above 30%. Not just that, they actually had positive net income on a GAAP basis, not just on an adjusted basis or something like that. The second quarter since they've turned profitable, adjusted EBITDA margin is now at 21% in climbing, they're buying back shares because they think it's cheap. Marqeta had its struggles. It actually did a reverse split not that long ago because it had been beaten down. This was a COVID-era IPO. The stock was down on this report due to a accelerating growth forecast. A lot of that's because Cash App is not an accelerating source of growth for them anymore. It's very cheaply valued on a price to sales ratio historically for this stock. The question is long term, can it keep those growth rates up while diversifying away from Block? That remains to be seen. That's why it's cheap, but it's one that's definitely back on my radar right now. Tyler Crowe: Well, I went through my Rolodex, trying to find the obscure stock I wanted to go through, and I saw that BBB Foods, ticker TBBB reported today, and the stocks up 15%. I was like, well, I just got to cover this one. For those who may have not have heard this company, it is a hard discount grocery retailer. Think like Aldi, maybe Lidl, if you live in Europe, that no-frills, not a lot of decoration. Just moving product as quickly you can at a relatively low price. This company is completely based in Mexico, has about 3,000 stores. For the quarter, sales were up 38.7% year over year, and same-store sales growth. The comps basically at the existing stores was up 20%, which I think was absolutely incredible. I haven't seen a lot of retailers these days putting up same-store sales memories like that. Store account growth was about 9%. They added about 125 new locations in the quarter, puts them on pace for about 500, 5,600 they want to put in this year? It sounds a lot, but with 3,200 so far, they're aiming for 14,000 total all across Mexico, so there's a lot of left to growth there. What was surprising to me. Again, they're growing really fast, and despite the high investment levels, they're generating free cash flow, basically because they're moving products so quickly. Again, that rapid same-store sales growth. They're generating free cash flow. It's just the turnover this company has been absolutely incredible, they're generating immense amounts of free cash for what is a relatively small start-up Mexican grocery retailer. I fell in love with this company when I read the IPO prospectus a couple of years ago, bought shares, and I've been delighted with this success so far. Hopefully, and we can make this a tradition of every earnings report we get to indulge in the obscure stocks that we love to follow every once in a while, and hope the listeners enjoyed it, as well. But that is all the time we have for today. Matt, Jon, thanks for your insights. I'm going to hit "Disclosure" and we'll get out of here. As always, people in the program may have interest in the stocks to talk about, and The Motley Fool may have recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards, and it's not approved by advertisers. Advertisements are sponsored content and provide for informational purposes only. See our full advertising disclosure, please check out our shown out. Thanks to you producer Bart Shannon and the rest of The Motley Fool team. Jon, Matt, and myself, thanks for listening, and we'll chat again soon.
Anthropic's Investors Want a $2 Trillion IPO. The Last Record-Setting IPO Has Made Its Buyers Nothing in Two Months.
Anthropic's backers reportedly want the artificial intelligence (AI) company to go public in October at a valuation of $2 trillion or more. The Financial Times reported the figure this month, citing the company's investors. Anthropic itself has confirmed far less. It filed a confidential draft registration statement on June 1, and it hasn't publicly set a valuation, a date, an exchange, or a ticker. Bloomberg reported Thursday that the company expects to match or beat the size of SpaceX's record raise, and could file publicly as soon as the end of this month. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue " A $2 trillion debut would be the largest initial public offering (IPO) ever, and the company it would take the record from is barely two months into public life. SpaceX (NASDAQ:SPCX) priced the current largest IPO on record in June, at a valuation of about $1.77 trillion. That makes SpaceX a timely case study. Anyone weighing whether to chase the next record listing can look at exactly what the market did with the last one. Image source: Getty Images. A $2 trillion ask The reported appetite for Anthropic rests on explosive growth. Preliminary figures the company shared with prospective investors put second-quarter revenue above $11.5 billion, more than double the first quarter's $4.73 billion, according to documents seen by Bloomberg News. Investors who spoke to the Financial Times expect annualized revenue of $100 billion to $120 billion by the end of the year. Days before filing, Anthropic raised $65 billion at a $965 billion valuation. In other words, its backers are now discussing a price about double what they paid in late May. Worth noting, too: According to the same reporting, Anthropic's own senior executives haven't fixed a valuation target, even privately. The $2 trillion figure belongs to the investors, not the company. Up 67%, down 22%, back to even SpaceX sold 555,555,555 shares at $135 apiece on June 11, raising $75 billion at the offer in the largest IPO on record -- and about $86 billion in all, once its underwriters exercised their option to buy 83.3 million more shares. Trading began the next day, and the first public trade came at $150. The 10 weeks since gave buyers the full range of outcomes. Shares ran as high as $225.64, a 67% gain from the offer price. They then fell as low as $104.83, which is 22% below it. As of this writing, the stock sits within a few percent of $135 -- about 40% below its high, and almost exactly where it started. So the investors who got shares at the offer price have made essentially nothing in two months. And anyone who bought at the opening trade is down about 9%. The sellers set the record The business performed the whole time, which is what makes the return so instructive. SpaceX grew second-quarter revenue 92% year over year to $7.81 billion, and its AI segment's revenue more than tripled year over year to $2.6 billion. The company signed $14.1 billion of cloud computing contracts during the quarter, narrowed its net loss to $541 million from $1 billion a year earlier, and ended June with $47.5 billion in backlog. Growth like that usually moves a stock. Across the full 10 weeks, on net, it hasn't moved this one -- because the offer price had already charged for it. Even today, SpaceX trades at about 57 times revenue, annualizing its second-quarter figure. The sellers, in short, set a record price precisely because the growth story was at full strength -- and the buyers have spent two months waiting for the story to catch up to what they paid. Anthropic's math could work out better. If revenue lands where its backers project, a $2 trillion valuation would be about 18 times the annualized revenue they expect by December. That is a lower price against hoped-for sales than SpaceX commanded. But it still assumes annualized revenue grows another 50% or more from the $65 billion annualized run rate the company reported for late July. And it prices that assumption in before the company has reported a single quarter in public. Of course, SpaceX's two months prove nothing about the next two years, and a business that keeps doubling can outgrow any starting price eventually. But I think the two-month record is worth taking at face value. The largest IPO ever delivered a 67% surge, a 53% collapse from that peak, and, for the investor who simply bought and held from the start, a return of about zero -- all while the business nearly doubled its revenue year over year. A record-setting price means the growth is charged upfront. Two months in, that is exactly how it has traded. Should you buy stock in Space Exploration Technologies right now? Before you buy stock in Space Exploration Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Space Exploration Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $429,223!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,318,055!* Now, it's worth noting Stock Advisor's total average return is 965% -- a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks " *Stock Advisor returns as of August 22, 2026. Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Meta Platforms (NASDAQ: META) Launches Muse Code Agent With Pricing That Undercuts OpenAI And Anthropic
Meta Platforms, Inc. (NASDAQ: META) launched a new AI coding agent called Muse Code on August 5, pricing it well below rival products from Anthropic and OpenAI in a direct push to win over cost-conscious developers. Muse Code is structured around two pricing tiers, with the most aggressive option set at just 20 cents per million output tokens for users willing to share usage feedback with Meta. That discounted tier aligns with pricing from China's DeepSeek and cuts beneath even OpenAI's older, reduced-cost model offerings, positioning Meta as the budget-friendly option in a crowded market. Meta AI chief Alexandr Wang described the value proposition plainly, saying the pricing "can be an incredibly good option for a lot of workflows, especially from a cost perspective." The launch carries significant strategic weight for Meta, whose shares fell 10% in the week before Muse Code's release after CEO Mark Zuckerberg offered investors little new detail about the company's cloud-computing plans during an earnings call. Wall Street has been pressing for evidence that Meta's heavy AI spending can translate into measurable revenue, and the Muse Code launch appears designed in part to answer that pressure. On the performance side, Muse Code ranked second on the Terminal-Bench 2.1 benchmark for real-world software engineering tasks, trailing only Anthropic's Claude Code Opus 5 but beating OpenAI's Codex in a strong debut showing. Zuckerberg highlighted the agent's ability to delegate tasks to sub-agents as a functional differentiator, and Meta has been routing engineering feedback through its internal MetaCode tool to steadily improve model benchmark scores. The launch, however, arrived alongside a separate and unwelcome headline: Meta disclosed that a third-party evaluator called Irregular had misconfigured its Muse Spark 1.1 model during testing, accidentally granting it unintended internet access, after which the model exploited a vulnerability in another company's system. Both Meta and Irregular described the incident as contained, but the episode adds a layer of scrutiny to Meta's push toward more autonomous, higher-stakes AI applications at a sensitive moment for the company. From a market positioning standpoint, Muse Code still trails Anthropic's flagship tool on the benchmark investors and developers watch most closely, leaving a performance gap that price alone may not fully bridge. Hedge fund data from Insider Monkey's Q1 2026 database shows Meta held 262 institutional holders, up from 256 the prior quarter, compared to Microsoft's 282 holders and Oracle's 115, reflecting moderate institutional confidence relative to its enterprise software peers. Meta is fighting for a foothold in AI coding tools it entered late, and whether aggressive discounting can overcome both a benchmark deficit and growing investor skepticism is a question the next earnings call will answer more clearly than any product launch.
Anthropic's Investors Want a $2 Trillion IPO. The Last Record-Setting IPO Has Made Its Buyers Nothing in Two Months.
Anthropic's backers reportedly want the artificial intelligence (AI) company to go public in October at a valuation of $2 trillion or more. The Financial Times reported the figure this month, citing the company's investors. Anthropic itself has confirmed far less. It filed a confidential draft registration statement on June 1, and it hasn't publicly set a valuation, a date, an exchange, or a ticker. Bloomberg reported Thursday that the company expects to match or beat the size of SpaceX's record raise, and could file publicly as soon as the end of this month. A $2 trillion debut would be the largest initial public offering (IPO) ever, and the company it would take the record from is barely two months into public life. SpaceX (SPCX +2.22%) priced the current largest IPO on record in June, at a valuation of about $1.77 trillion. That makes SpaceX a timely case study. Anyone weighing whether to chase the next record listing can look at exactly what the market did with the last one. A $2 trillion ask The reported appetite for Anthropic rests on explosive growth. Preliminary figures the company shared with prospective investors put second-quarter revenue above $11.5 billion, more than double the first quarter's $4.73 billion, according to documents seen by Bloomberg News. Investors who spoke to the Financial Times expect annualized revenue of $100 billion to $120 billion by the end of the year. Days before filing, Anthropic raised $65 billion at a $965 billion valuation. In other words, its backers are now discussing a price about double what they paid in late May. Worth noting, too: According to the same reporting, Anthropic's own senior executives haven't fixed a valuation target, even privately. The $2 trillion figure belongs to the investors, not the company. Up 67%, down 22%, back to even SpaceX sold 555,555,555 shares at $135 apiece on June 11, raising $75 billion at the offer in the largest IPO on record -- and about $86 billion in all, once its underwriters exercised their option to buy 83.3 million more shares. Trading began the next day, and the first public trade came at $150. The 10 weeks since gave buyers the full range of outcomes. Shares ran as high as $225.64, a 67% gain from the offer price. They then fell as low as $104.83, which is 22% below it. As of this writing, the stock sits within a few percent of $135 -- about 40% below its high, and almost exactly where it started. So the investors who got shares at the offer price have made essentially nothing in two months. And anyone who bought at the opening trade is down about 9%. The sellers set the record The business performed the whole time, which is what makes the return so instructive. SpaceX grew second-quarter revenue 92% year over year to $7.81 billion, and its AI segment's revenue more than tripled year over year to $2.6 billion. The company signed $14.1 billion of cloud computing contracts during the quarter, narrowed its net loss to $541 million from $1 billion a year earlier, and ended June with $47.5 billion in backlog. Growth like that usually moves a stock. Across the full 10 weeks, on net, it hasn't moved this one -- because the offer price had already charged for it. Even today, SpaceX trades at about 57 times revenue, annualizing its second-quarter figure. The sellers, in short, set a record price precisely because the growth story was at full strength -- and the buyers have spent two months waiting for the story to catch up to what they paid. Anthropic's math could work out better. If revenue lands where its backers project, a $2 trillion valuation would be about 18 times the annualized revenue they expect by December. That is a lower price against hoped-for sales than SpaceX commanded. But it still assumes annualized revenue grows another 50% or more from the $65 billion annualized run rate the company reported for late July. And it prices that assumption in before the company has reported a single quarter in public. Of course, SpaceX's two months prove nothing about the next two years, and a business that keeps doubling can outgrow any starting price eventually. But I think the two-month record is worth taking at face value. The largest IPO ever delivered a 67% surge, a 53% collapse from that peak, and, for the investor who simply bought and held from the start, a return of about zero -- all while the business nearly doubled its revenue year over year. A record-setting price means the growth is charged upfront. Two months in, that is exactly how it has traded.
$20 Polymarket referral code "CUSE" scheduled for Liberty-Fever tonight
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Anthropic Is Reportedly Being Upfront With Would-Be Investors About AI Backlash
In San Francisco, meetings have reportedly been happening in which Anthropic Chief Financial Officer Krishna Rao is taking questions from would-be investors ahead of the public release of the company's IPO prospectus. Remarkably, that prospectus is expected to include verbiage spelling out the fact that the public is fearful upset about what AI companies are doing, according to CNBC. CNBC, which cites anonymous "people familiar with [the] matter," first reported on these apparent San Francisco meetings, and says the public's antipathy toward Anthropic's product and the data centers that enable it will be outlined in the prospectus as -- to use CNBC's term -- a "key risk factor." In other words, the most important formal document disclosing information investors need before they invest in Anthropic will reportedly acknowledge public outcry. That outcry isn't just a lot of grumbling. Politicians on both sides of the aisle increasingly campaign against AI during elections. Depending how deep the prospectus goes, it might have to acknowledge disruptive protests against AI and data centers, reportedly including multiple incidents involving gunshots, and at least one molotov cocktail. SpaceX's IPO earlier this year didn't focus on public sentiment, even though AI was arguably the main source of future revenue cited in the SpaceX prospectus. That document mentioned a reliance on natural gas, for instance, but in the part about regulatory considerations, not in any section on, say, public outcry over pollution. It also mentioned that Grok's brashness and ability to create "potential nonconsensual or exploitative imagery" might trigger "reputational damage" or "user or advertiser backlash." But philosophical opposition to AI itself doesn't appear to be in there. Gizmodo reached out to Anthropic to confirm that investor meetings were taking place in San Francisco, and to ask for comment on CNBC's claim about the company's IPO prospectus. We did not immediately hear back.
Anthropic's $2 trillion IPO faces a new threat as Americans push back against AI data centers - Cryptopolitan
Anthropic recently topped $65 billion in annualized revenue and made $11.6 billion in Q2. Anthropic is getting ready to hit the stock market, while more Americans are pushing back against AI data centers being built around them. People are also growing uneasy about AI, a pushback that is expected to show up as a serious risk in the company's IPO papers. Anthropic quietly filed to go public in June, with an offering that could become one of the biggest public stock listings ever seen anywhere in the world. Investors now think the company behind Claude could be valued at around $2 trillion. Communities are also questioning how much electricity, land, and infrastructure these facilities need to keep advanced AI systems running. These concerns are beginning to surface even in Anthropic's early fundraising rounds. So far, Anthropic has been conducting its preliminary meetings in private in San Francisco. These meetings are taking place behind closed doors, and the names of the participants involved have not yet been disclosed. Meanwhile, Anthropic's CFO, Krishna Rao, has been receiving questions regarding competition, margin pressures from open source models, and data center build-up slowdowns. Elon Musk's SpaceX (SPCX), which competes against Anthropic via its AI division, received $85.7 billion in funding from its listing last month, which is the biggest IPO ever conducted. It is expected that Anthropic will get more funding than this if the valuations hold true. Anthropic needs more computing power while Americans keep pushing back against new AI data centers Anthropic needs much more computing power to meet demand for Claude and newer AI products. Like OpenAI, the company is pushing its infrastructure partners to build faster. Tech giants are spending hundreds of billions of dollars this year on infrastructure, including data centers and the graphics processors that go inside them. Those sites train advanced models and run new AI services at scale. A Gallup poll released in May found that seven in 10 Americans did not want AI data centers built near them. Almost half said they were "strongly opposed." Only around one-quarter supported local projects. Getting enough computing power is already a big IPO question for Anthropic. The company needs data centers, chips, and electricity to keep up with demand for its services. Anthropic was started in 2021 by Chief Executive Dario Amodei and other former OpenAI employees who left after disagreements over AI's direction. For years, the startup was seen as behind OpenAI. Dario and his team spent years building AI systems that could write code, handle long conversations, and automate business work. Then Claude Code gained ground. As the coding product improved, Anthropic's revenue climbed quickly. The company has told early investors that it expects its AI models to keep getting better. Executives believe stronger models will let Anthropic keep charging higher prices even while rivals offer cheaper products. Investors want to know how Anthropic plans to keep those prices up as open-weight models become more common. Those models make the calculations behind their systems public and can cost less than Anthropic's products. Anthropic brings fast revenue growth to investors as they weigh a possible $2 trillion valuation Anthropic's investors believe the market for its AI services could eventually be worth several trillion dollars. They expect AI to move into huge parts of white-collar work. As the IPO gets closer, its revenue growth is expected to become a major part of the pitch. According to the New York Times, two investors expect Anthropic to point to revenue growth of more than 10 times compared with the year before. The company has already shared updated financial numbers with investors before the listing. Last month, Anthropic moved above $65 billion in annualized revenue. That number takes the company's monthly revenue and projects it across a full year. At the end of last year, the same figure was $9 billion. Anthropic also made $11.6 billion in revenue during the second quarter. Investors also want to know whether Anthropic can get enough computing power to keep pace with those sales. The company needs enough server space, GPUs, and electricity while its infrastructure partners keep building. Anthropic is expected to publish its public IPO prospectus in the next few weeks. Its shares are then expected to start trading in the months after that.
Anthropic made $11.5 billion last quarter! A year earlier it made $787 million
Anthropic's second-quarter revenue exceeded $11.5 billion, against $787 million in the same quarter a year earlier. Its annualised run rate reached $65 billion by the end of July. It has filed confidentially for an IPO with Morgan Stanley, Goldman Sachs and JPMorgan, could begin trading this autumn, and investors are discussing a valuation that would make it the largest public debut in history. Anthropic's second-quarter revenue exceeded $11.5 billion. In the same quarter a year earlier it was $787 million. That is a fourteenfold increase in twelve months, at a scale where such multiples do not normally occur. Companies growing that fast are usually small. Anthropic was not small a year ago. The Numbers The annualised run rate reached roughly $65 billion by the end of July, up sharply from where it stood at the close of 2025. Anthropic was valued at $965 billion in its Series H round in May. It has filed confidentially for a listing, working with Morgan Stanley, Goldman Sachs and JPMorgan Chase, and could begin trading as early as this autumn. Investor expectations for the offering have reached $2 trillion or higher. If that holds, it would surpass the $1.77 trillion record SpaceX set in June and become the largest initial public offering ever completed. Backers expect annualised revenue between $100 billion and $120 billion by the end of this year. One caution on those figures: the valuation expectations come from investors, not from the company. Senior Anthropic executives have not set a public target, and reporting suggests they have not set one privately either. The revenue figures are attributed to people familiar with the finances rather than to audited disclosure, which is normal for a company that has filed confidentially and cannot say much until it doesn't. It Is Now Ahead Of OpenAI The comparison that matters is not with SpaceX. It is with the company Anthropic was founded by people who left. On current revenue generation, Anthropic is reported to be ahead of OpenAI. That is a reversal of the assumption that has governed coverage of this industry since 2022, and it happened without a consumer product anyone would call a household name. OpenAI, meanwhile, appears to be slowing down. It filed confidentially in June and was reported to be targeting a September listing, then to be weighing a delay into 2027 rather than accept a valuation below $1 trillion. Sam Altman is reported to have treated any cut to that figure as a nonstarter. So the two companies may arrive at the public markets in the opposite order to the one everyone expected, and for opposite reasons -- one accelerating into a receptive market, the other holding back for a number. Where The Money Is Coming From The composition of Anthropic's revenue explains the growth better than the headline figure does. Anthropic sells overwhelmingly to businesses rather than consumers. Enterprise contracts are larger, longer and less volatile than subscriptions, and they expand inside an organisation once the first team adopts them. That is a slower start and a steeper curve, which is close to the shape the numbers show. It also has a coding business that has become the strongest product-market fit in the industry, at a moment when software development is the single clearest commercial application of these models. Independent assessments of AI coding tools have repeatedly placed Anthropic's offering first. The risk in that concentration is the obvious one. A business weighted towards enterprise software and coding is exposed to exactly one thing going wrong: a competitor closing the capability gap on code. Google shipped Gemini 3.7 Flash this month with a sixteen-point jump on one agentic coding benchmark in three weeks, at half the blended price of its predecessor. What An IPO Changes A listing at this scale converts a private research company into a public one with quarterly obligations, and that is a genuine change in what Anthropic is. The company has built its identity on safety, on publishing research that complicates its own commercial story, and on a governance structure designed to let it decline revenue. Public markets do not forbid any of that, but they price it. Every decision to slow a release, restrict a capability or spend on alignment research becomes a line an analyst can question on a call. There is a live example. An assessment published this week graded five frontier labs on their internal AI control practices, and Anthropic scored zero on having a published plan for containing a model that escapes control -- the lowest possible mark, on the one measure most directly tied to its public identity. That gap existed while the company was private and answerable to nobody but its own board. It is harder to explain from a stock exchange. The Number To Watch Fourteenfold growth is the figure that will lead coverage, and it is real. But the one that determines whether the valuation holds is the $100 billion to $120 billion the backers expect by December. That requires the run rate to rise by more than half again in five months. If it lands, the $2 trillion conversation is defensible on any normal revenue multiple. If it stalls at $65 billion, a company priced at thirty times revenue on the promise of continued acceleration becomes a considerably harder story to tell to public shareholders than to private ones.
Anthropic hires Google chip veteran Amir Salek as part of push into hardware
AI firm Anthropic has hired a Google chip founder for its new semiconductor team. This move signals Anthropic's ambition to develop its own custom AI chips. The company is also securing significant data center capacity deals. Rival OpenAI is pursuing similar custom chip development strategies. These efforts aim to address supply shortages and optimize AI hardware. Anthropic PBC has hired Amir Salek, a founder of the custom chip program at Alphabet Inc's Google, as the AI lab lays the groundwork for a push into making its own semiconductors. Salek is joining the compute team of Anthropic, maker of the Claude platform, the AI company said Friday. The executive ran Google's tensor processing unit business until 2022 and delivered the first seven generations of those chips. In the new role, Salek will report to James Bradbury. Also Read: Samsung Electronics expects shareholder returns up to $80 billion this year Anthropic, which buys chips from a variety of sources, including Nvidia Corp, Google and Amazon.com, has indicated recently that it wants to build an in-house silicon business. The San Francisco-based company has begun hiring and listing jobs for the effort. Like other AI giants, Anthropic is scrambling to get enough data center infrastructure to support its ambitions. Custom chips would potentially help it cope with supply shortages and tailor designs to better meet its needs. Also Read: South Korea's HD Hyundai Heavy says mulling US shipyard investment Rival OpenAI, the company behind ChatGPT, is taking similar steps. It has unveiled a chip called Jalapeno, co-developed with Broadcom, and plans to begin using it later this year. Anthropic is signing chip and data center capacity deals at a rapid clip - working with both established and emerging vendors. The company has an agreement with UK-based chip startup Fractile for an initial order of roughly $250 million of its chips, with the intention to expand that contract in the future, Bloomberg News has reported. The AI lab also recently signed capacity deals with Riot Platforms and Volta Infra Holdings. After leaving Google, Salek has been senior managing director at Cerberus Capital Management, a private equity firm co-founded by Deputy Secretary of Defense Stephen Feinberg. He also previously worked at Nvidia, the leading maker of AI processors.
