News & Updates
The latest news and updates from companies in the WLTH portfolio.
Interactive Brokers Earns Interest on $182 Billion of Its Clients' Idle Cash. Will Anthropic's IPO Drain It?
Interactive Brokers (NASDAQ:IBKR) ended June with $182.4 billion of uninvested client cash, up 27% year over year. Not only did the pile grow, but it was bigger still two months after the quarter closed, reaching $185.6 billion at the end of August. And until clients put that money to work, the automated global broker collects interest on it. They may soon get a big occasion to put some of it to work. Anthropic's initial public offering (IPO) prospectus could arrive as soon as this week. In late August, The Information reported that the artificial intelligence (AI) company planned to release it just after Labor Day, with a market debut following 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 " Investors project the Claude maker's valuation could land at about $2 trillion, CNBC has reported. They also expect the offering itself could top the largest on record -- the $85.7 billion SpaceX (NASDAQ:SPCX) raised in its June debut. Anthropic's timing is a plan, not a scheduled event. There's no public prospectus, no price, and no share count yet. But I think the setup is worth examining, because the broker just lived through a version of it. What does a huge listing do to this business? Image source: The Motley Fool. A cash pile that pays Interactive Brokers earns money on client cash in a straightforward way. It segregates customer cash as regulators require and invests the majority of that segregated cash in short-term U.S. government securities and related instruments. Clients earn interest on qualifying U.S. dollar balances, and the company keeps a spread for itself: half a percentage point below the benchmark federal funds rate. At today's scale, net interest income is the company's biggest revenue line. It rose 23% year over year to $1.06 billion in the second quarter, helped by growing customer credit balances and a 67% jump in customer margin loans. That was more than half of the quarter's $1.9 billion of total net revenues. Notably, the growth came from bigger balances. The company's net interest margin narrowed to 1.93% from 2.07% a year earlier as interest rates declined, yet net interest income climbed anyway. In other words, the cash isn't idle from the broker's perspective. Every uninvested dollar earns the company a little interest, and clients added about $39 billion of those dollars over the past year. SpaceX's debut didn't drain the pile If a giant IPO were going to pull client cash out of the business for good, the second quarter was the test. SpaceX went public on June 12, and Interactive Brokers participated directly. "In Europe, we directly offered the SpaceX IPO to eligible U.K. and European retail clients, providing access across multiple countries," said Nancy Stuebe, the company's director of investor relations, on the July earnings call. The trading side delivered. Commission revenue hit a record $673 million in the second quarter, up 30% year over year and accelerating from 19% growth in the first quarter. But the cash pile grew anyway. Client equity climbed to $962.8 billion in August, up 35% year over year, and customers traded more too -- daily average revenue trades rose 23%. And a big reason the cash keeps pace is that new customers keep arriving. Client accounts reached 5.46 million in August, up 35% from a year earlier. Will Anthropic be a repeat? Two things would have to happen first. The offering has to arrive at all. Anthropic's June filing was a confidential draft registration statement, and the company has said the proposed offering will depend on market conditions. Interactive Brokers would also need access to the shares. The company hasn't said anything about distributing Anthropic's offering, and its SpaceX access was limited to eligible retail clients in the U.K. and Europe. I wouldn't assume a repeat until the company announces one. Still, the second quarter suggests shareholders don't need one. Heavier customer trading can lift commissions, while account growth keeps refilling the interest-earning cash pile. Ultimately, I view an Anthropic debut as a potential bonus for this business rather than a swing factor. Even at a record $673 million, commissions remain the smaller of the company's two big revenue lines. The stock, meanwhile, sits near $92 as of this writing, about 6% short of its 52-week high. And it trades at about 29 times what analysts expect it to earn next year -- arguably a rich price for a brokerage, although one attached to 28% net revenue growth and a pretax profit margin that expanded to 77% last quarter. I wouldn't buy shares because of an IPO on the horizon. The account growth that keeps refilling that cash pile matters a lot more. Should you buy stock in Interactive Brokers Group right now? Before you buy stock in Interactive Brokers Group, 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 Interactive Brokers Group 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 $421,997!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,413,876!* Now, it's worth noting Stock Advisor's total average return is 978% -- a market-crushing outperformance compared to 213% 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 September 7, 2026. Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group and short January 2027 $46.25 calls on Interactive Brokers Group. The Motley Fool has a disclosure policy.
Anthropic Seeking $15 Billion in Debt Before Its IPO: Is That a Warning Sign or a Bullish Signal for AI Infrastructure Stocks?
The artificial intelligence industry is growing rapidly to meet historic adoption rates. To support this growth, data centers are being built as quickly as possible. "The race to scale AI has triggered one of the largest infrastructure build-outs in modern history," concludes a report by McKinsey & Co. Over the next three years alone, the firm projects more than $7 trillion will be deployed globally to scale data center infrastructure. 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 " "Whether a build-out is successful depends on many nuances, including the availability of capital and energy resources," McKinsey Co. warns. The world's current energy system is simply not designed to handle the massive influx of energy-intensive data center infrastructure expected in the coming years and decades. This has led to a surge in new energy projects, even for more speculative technologies like small modular nuclear reactors. The availability of capital, however, is a completely different challenge. In the first quarter of 2026 alone, more than $240 billion in venture funding went toward AI start-ups. That's larger than the entirety of 2025. And that figure doesn't account for public markets, through which hundreds of billions in additional capital have been raised. Now, Anthropic is looking to secure $15 billion in debt financing ahead of a potential IPO. Should the capital raise excite or worry investors? There are two things AI investors should keep in mind. 1. The capital intensity of AI isn't going away Many skeptics have compared the current AI boom to the dot-com bubble. And while there are many similarities, the differences are critical to understand. The biggest difference, perhaps, is that during the dot-com craze, much of the critical infrastructure had yet to be built. That is, most of the world still lacked access to high-speed internet services. There was also a lack of user access points. Today, of course, high-speed internet access is nearly ubiquitous. And billions of people have an internet access point -- commonly called a smartphone -- directly in their pockets nearly all the time. That infrastructure, however, took decades to realize. The AI boom, meanwhile, already has all that critical infrastructure in place, allowing it to grow more rapidly than the dot-com era ever could. But there still is an infrastructure gap. To realize the AI industry's full potential, a massive amount of data center infrastructure will need to be built, triggering one of the biggest infrastructure build-outs in history. Without new compute power, AI growth will stall. Investors should expect capital-intensive projects for decades to come. And with many AI divisions still losing money, sizable capital raises could be the norm through the end of the decade, perhaps longer. Image source: Getty Images 2. Access to capital could become a competitive advantage If capital is necessary to scale the required data center infrastructure, access to capital could become a key competitive advantage. This is likely why so many AI companies are now seeking to go public. SpaceX (NASDAQ:SPCX), of course, held a record-breaking IPO in June. Now, both OpenAI and Anthropic are looking to go public. Most big tech firms, meanwhile, are already public, allowing them to tap capital markets more easily than their private peers. Scaling compute power will be critical to scaling the capacities of AI technology. In this way, investors should expect heavy competitive advantages for two types of businesses: those that are already profitable, reducing their reliance on capital markets, and those with high valuations and easy access to capital raises, such as firms that are already public. Therefore, large, profitable, public AI companies may have the strongest competitive advantages long term. 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 $421,997!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,413,876!* Now, it's worth noting Stock Advisor's total average return is 978% -- a market-crushing outperformance compared to 213% 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 September 7, 2026. Ryan Vanzo has no position 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.
Anthropic Has Committed More Than $100 Billion to AWS, and Its Prospectus Could Reveal More Details About This Contract
Anthropic, the company behind the Claude artificial intelligence (AI) models, plans to publish its initial public offering (IPO) prospectus after Monday's Labor Day holiday, The Information reported late last month. A listing may follow as soon as late September or in October. Amazon (NASDAQ:AMZN) shareholders have a more specific reason than most to open the document when it lands. On April 20, Anthropic committed to spend "more than $100 billion over the next ten years" with Amazon Web Services (AWS), Amazon's cloud computing segment. That promise is equal to about a fifth of AWS's backlog of contracted work, which reached about $496 billion in June. 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 " In other words, Amazon has already told investors how much one of its biggest cloud customers intends to spend. What no Amazon filing can show is whether the customer's own finances support it. That's what the prospectus is for. Image source: Getty Images. The contract is already in Amazon's filings April's agreement covers up to 5 gigawatts of capacity on Amazon's own silicon -- Graviton processors and Trainium2 through Trainium4 AI chips, with an option on future generations. Amazon's filings show what a deal that size does to the backlog. AWS's backlog (commitments in customer contracts with original terms longer than one year that haven't yet been recognized as revenue) had grown to about $496 billion by June 30. That was up from about $364 billion in March, and from $195 billion in the middle of 2025 -- growth of 154% year over year, including a $132 billion jump in a single quarter. And the Anthropic deal wasn't alone. The filing also discloses a $100 billion, eight-year expansion of AWS's existing $38 billion commitment from OpenAI, announced a quarter earlier. Not only is AWS's contracted future far bigger than it was a year ago, but more of it also sits years away from becoming revenue. The weighted-average remaining life of the segment's long-term contracts stretched from 4.0 years to 6.4 years over those 12 months. One half of the deal is easy to check Of course, a backlog is signed work, not guaranteed revenue. Amazon says the amount and timing of what it recognizes "will be driven by customer usage and our performance in accordance with contractual obligations." Amazon's half of that sentence looks strong. In the second quarter of 2026, AWS's revenue rose 37% year over year, to $42.2 billion -- the segment's fastest growth in 18 quarters and a $169 billion annualized pace. Segment operating income rose about 63% year over year to $16.6 billion. And the AI business inside AWS passed a $25 billion annualized revenue pace of its own, growing triple-digit percentages. The customer's half is the part I can't verify yet. Anthropic is private, and its reported growth is extraordinary. In April, the company said its annualized revenue pace had passed $30 billion, more than triple its level entering the year. And by mid-August, CNBC reported, Anthropic was telling investors the pace had reached $65 billion by the end of July. Spread evenly, the commitment works out to more than $10 billion a year, or about 6% of AWS's current annual revenue pace. That's arguably affordable if Anthropic's growth holds, and heavy if it doesn't. And Amazon isn't just supplying the capacity. Its latest quarterly filing shows the company has put another $10 billion into Anthropic this year, with up to $15 billion more available under a financing arrangement tied to compute-delivery milestones. That means Amazon's interest in Anthropic's financial health goes beyond the contract itself. What does a prospectus settle? Nearly everything the market knows about Anthropic's finances today is reported, not filed. The company's only filing on record is the confidential draft it submitted to the Securities and Exchange Commission in June. Its expected market value is a projection. People familiar with the matter told CNBC last month that the company could go public at a valuation of about $2 trillion, about double its private-market value. Its revenue pace is self-reported, and no audited numbers are public. A prospectus replaces the estimates with audited financial statements: actual revenue, actual profit or losses, and actual cash. Even more useful for Amazon shareholders, it should carry Anthropic's own accounting of its purchase commitments, the other side of the agreements that swelled AWS's backlog. At about $259 as of this writing, Amazon's stock trades at a forward price-to-earnings ratio of about 24. For a company whose cloud segment just accelerated to 37% growth, I think that's a reasonable price. But AWS has now disclosed more than $200 billion of multi-year commitments from just two private AI companies, and until those companies file, investors can only judge them by reported figures. Ultimately, Anthropic's prospectus is the first chance to check one of them. I'll be reading it closely. Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a "Double Down" stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: * Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $598,219!* * Apple: if you invested $1,000 when we doubled down in 2008, you'd have $61,037!* * Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $421,997!* Right now, we're issuing "Double Down" alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon. See the 3 stocks " *Stock Advisor returns as of September 6, 2026. Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
Cerebras Has a $25.4 Billion Backlog, and One OpenAI Agreement Is Behind Much of It
By most measures, Cerebras Systems (NASDAQ:CBRS) delivered an outstanding second quarter. The artificial intelligence (AI) computing specialist grew its non-GAAP (adjusted) revenue 103% year over year to $209.9 million. Its inference cloud business nearly quadrupled, and management raised its full-year outlook to a range of $880 million to $890 million in adjusted revenue. 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 " But the most important number in the mid-August update wasn't on the income statement at all. Cerebras ended June with $25.4 billion in remaining performance obligations, the backlog of contracted work it hasn't yet delivered or recognized as revenue. That's nearly 29 times the revenue management expects for all of 2026, a figure lifted by data center costs passed through to OpenAI. A figure that large deserves scrutiny. The company's own filings say where to look: at a single agreement with OpenAI. Image source: Getty Images. The backlog arrived almost all at once In December 2025, Cerebras signed a master relationship agreement with the ChatGPT maker under which OpenAI committed to purchase 750 megawatts of computing capacity for AI inference -- a deal Cerebras has valued at more than $20 billion. OpenAI also holds an option to buy an additional 1.25 gigawatts of capacity by the end of 2030. Remaining performance obligations were $24.6 billion at the close of 2025, then edged up to $25.0 billion in March and $25.4 billion in June. The balance grew only about 3% over the first half of 2026. Nearly all of it was on the books before 2026 began. And Cerebras says in its latest quarterly filing that a significant amount of the balance is attributable to its obligations under the OpenAI agreement. Cerebras recognized $56.8 million of revenue under the arrangement in the second quarter, or about 32% of the company's $180.1 million in revenue under generally accepted accounting principles (GAAP), which grew 74% year over year. When does the backlog become revenue? The backlog converts slowly, by design. Cerebras expects to recognize only about 22% of the $25.4 billion (about $5.6 billion) over the 24 months ending June 30, 2028. Another 43% should arrive between months 25 and 48, with the rest coming later. Of course, the timing can shift at the customer's request. It's worth noting, though, that the near-term share has moved up. At the close of 2025, Cerebras expected about 15% of the balance to convert in the 24 months through 2027. The latest figure is 22%, though it covers a window ending six months later. The conversion takes years partly because Cerebras is still building the thing it has sold. Capacity for OpenAI deploys in stages from 2026 through 2028. Cerebras says more than 600 megawatts of data center capacity is live or under contract for delivery by the end of 2027, with manufacturing capacity set to grow more than tenfold in 2026. And just this week, Cerebras announced a new 165-megawatt data center in Finland. OpenAI is even helping to finance the build-out, advancing Cerebras a $1 billion working capital loan in January. Concentration isn't new here In 2025, Mohamed bin Zayed University of Artificial Intelligence accounted for 62% of the company's revenue, and Group 42 accounted for another 24%. Those figures are shares of last year's revenue, not of the backlog. But the pattern held in the second quarter, when three customers each accounted for at least 10% of revenue, or 76% of it between them. The company doesn't say exactly how much of the $25.4 billion sits with OpenAI. Either way, a short list of buyers is doing most of the buying. That matters because of the stock's valuation. With shares around $215 as of this writing (down about 44% from their 52-week high of $386.34), the whole company is valued near $51 billion -- nearly 58 times the adjusted revenue management expects this year, for a company still posting operating losses. Even if revenue more than triples in 2027, as management plans, the stock would trade at about 19 times those expected sales. What, then, is the backlog worth to a shareholder? A lot, I think -- just not everything the headline number implies. The $25.4 billion includes a customer's multiyear commitment, not revenue in hand. And most of it is scheduled to convert after mid-2028, by a company that must build enormous capacity on time, much of it for one buyer whose needs could change. The business itself is executing well. Adjusted gross margin improved about nine percentage points from a year ago, and Cerebras holds about $8.6 billion in cash and investments after May's initial public offering. Ultimately, the backlog is evidence of extraordinary demand and arguably the best reason to keep watching Cerebras closely. But I'd want to see the OpenAI revenue step up for a few more quarters before paying today's price. Should you buy stock in Cerebras Systems right now? Before you buy stock in Cerebras 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 Cerebras 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 $421,997!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,413,876!* Now, it's worth noting Stock Advisor's total average return is 978% -- a market-crushing outperformance compared to 213% 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 September 5, 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.
AMD Committed Up to $5 Billion to Anthropic, and Anthropic's IPO Prospectus Is Reportedly Days Away
When Advanced Micro Devices (NASDAQ:AMD) announced its Anthropic partnership in late July, two commitments stood out. Anthropic agreed to deploy up to 2 gigawatts of AMD Instinct MI450 series graphics processing units (GPUs), with deployment of the first gigawatt set to begin in the first half of 2027. And AMD committed to invest up to $5 billion in the artificial intelligence (AI) company behind the Claude models. The second commitment is about to get easier to measure. Anthropic plans to publish its initial public offering (IPO) prospectus after the Labor Day holiday on Monday, with a listing as soon as late September or early October, The Information reported late last 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 " What does AMD hold today, then? Not a stake, at least not yet. Image source: AMD. Conditions attached AMD's press release put it carefully: The company "has committed to make a strategic equity investment of up to $5 billion in Anthropic in the future." AMD's early August quarterly filing added structure. It describes investment commitments of up to $5 billion entered after the quarter ended, "subject to certain contingencies," with the money expected to go out through fiscal year 2028. Neither company has said what the contingencies are. And no valuation for the investment has been disclosed. That shape has become standard among Anthropic's backers. Alphabet agreed in April to invest up to $40 billion -- $10 billion immediately, the remaining $30 billion contingent on performance milestones. For scale, AMD held $1.7 billion of investments in private companies at the end of the second quarter. This one commitment could grow to nearly triple that. What would a listing change? Anthropic itself has confirmed very little. The only filing on record is a confidential draft registration statement submitted in June. However, the reported figures are staggering. CNBC has reported that Anthropic is valued at close to $1 trillion in the private markets, and that investors project it could float at about a $2 trillion valuation. The growth underneath, I think, explains the excitement. Anthropic's annualized revenue run rate (a full-year projection of its recent revenue pace) topped $30 billion in April and passed $65 billion by the end of July. The company has reportedly raised at least $130 billion, and its offering is expected to surpass the June IPO of SpaceX, which raised about $86 billion, the largest on record. Every one of those figures is reported, not filed. And at the reported valuations, AMD's up-to-$5 billion would buy no more than about half of 1% of the company. Still, a listing would give whatever stake AMD may eventually hold a daily price that flows straight into its reported results. The company ended the second quarter with $425 million of net unrealized gains on marketable equity securities, mostly from holdings that went public during the quarter. AMD is helping finance a customer The part I'd watch most closely isn't the stake at all. AMD has committed money to a company that agreed to deploy its chips. AMD's OpenAI arrangement runs in the opposite direction. That deal handed OpenAI a warrant for up to 160 million AMD shares, vesting as deployment and stock-price milestones are hit. Showing what those deals feed, AMD's data center segment revenue more than doubled year over year to $6.7 billion in the second quarter, or 58% of record companywide revenue of $11.5 billion, up 50% year over year. Management guided third-quarter revenue to about $13 billion, up about 41%. That guided rate marks a deceleration, at a much larger scale. When a customer AMD helps finance commits to up to 2 gigawatts of deployments, some of the dollars moving through the system could be AMD's own. In effect, a slice of the industry's demand could end up self-financed. That, I'd argue, is the strongest reason the IPO matters to AMD shareholders. An offering that surpasses SpaceX's could pay for a chunk of the buildout with public investors' money instead of suppliers' commitments. Even more, a public Anthropic would have to show, quarter after quarter, how much revenue it's actually producing. In short, the two commitments aren't equal. The up-to-$5 billion investment is conditional, unpriced, and small next to Anthropic's reported valuations. The deployments are what can become revenue, and they aren't set to begin until 2027. Meanwhile, AMD shares trade near $474 as of this writing (about 19% below their 52-week high), at about 30 times next year's expected earnings -- a price with a lot of chip demand already baked in. I think the Anthropic deal makes that demand more likely to show up on schedule. But what AMD holds from it today is still a promise. Should you buy stock in Advanced Micro Devices right now? Before you buy stock in Advanced Micro Devices, 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 Advanced Micro Devices 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 $421,997!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,413,876!* Now, it's worth noting Stock Advisor's total average return is 978% -- a market-crushing outperformance compared to 213% 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 September 5, 2026. Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Alphabet. The Motley Fool has a disclosure policy.
The Anthropic IPO May Be Right Around the Corner. Here's What Investors Need to Know.
This year has been a major one for initial public offerings, even producing the biggest IPO on record: the Space Exploration Technologies operation. Including the exercise of an overallotment option, SpaceX raised more than $85 billion and entered the market with a trillion-dollar valuation. Now, all eyes are focused on the next IPO, one that could be even larger than that of SpaceX. I'm talking about the upcoming Anthropic market debut. The artificial intelligence (AI) lab, maker of the famous AI assistant Claude, confidentially filed a draft registration statement with regulators in June. And news reports suggest an IPO may be right around the corner. Here's what investors need to know. 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 " Image source: Getty Images. Why IPOs spark excitement So, first, a quick look at why the launch of companies involved in AI -- from SpaceX to AI chip designer Cerebras Systems -- has sparked excitement and drawn investors' attention. It's important to note that IPOs generally garner attention as they present new investing opportunities. On top of this, the AI market, heading toward a value of $3 trillion in just a few years, according to analysts, represents a massive growth opportunity. Publicly traded AI leaders such as Nvidia and Amazon have seen revenue skyrocket in recent years, so investors are eager to get in on the next new AI story. Now, let's consider Anthropic and what you as an investor need to know. The company is the maker of the Claude AI assistant, the popular Claude Code coding tool, and other AI-driven products, and these are in high demand. TechCrunch, citing an Anthropic spokesperson, reported that Claude paid subscriptions have more than doubled in 2026. In May, Anthropic raised $65 billion in Series H funding, pushing its valuation to $965 billion. At the time, the company said its revenue run rate had surpassed $47 billion. AI labs such as Anthropic and OpenAI have been key players in the AI story, calling for a ramp-up in AI infrastructure from cloud partners such as Amazon Web Services (AWS). This increase in compute results in higher revenue for them -- more compute allows Anthropic and OpenAI to supercharge the performance of their large language models and serve more customers. Anthropic's confidential filing In recent months, investors have been looking to the IPO plans of each company, and Anthropic became the first to file, confidentially, with the Securities and Exchange Commission. In a confidential filing, a company provides financial data to regulators but doesn't yet release these details to the public. Anthropic hasn't offered an update on its plans, but The Information recently reported that a prospectus would be made public after the Labor Day holiday and that a market debut is planned for late this month or early next month. The publication cited people familiar with the situation. According to the report, Anthropic expects to surpass the size of SpaceX's IPO. And several publications have said that Anthropic is targeting a valuation of $2 trillion. The Information also said that Anthropic may allow existing shareholders to sell shares during the IPO. The positive is that this broadens the pool of available shares; the negative is that cash from those sales goes to the respective shareholders, not the company. And if key insiders sell, potential investors may view this as a lack of confidence in the future. These elements offer us clues about what to expect, but it's important to review Anthropic's prospectus when it becomes available to confirm these and other details. Investors should focus on financial information, including revenue from Claude, gross margin, and the status of existing contracts. Investors should also pay close attention to what the company considers potential risks. This will help you determine whether an investment in this IPO stock is right for you -- an aggressive investor may make a different decision than a cautious investor. So, right now, if you're interested in possibly participating in the Anthropic IPO, the best thing you can do is stay tuned for the official filing -- which may be just ahead -- and examine it carefully. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 983%* -- a market-crushing outperformance compared to 212% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks " *Stock Advisor returns as of September 3, 2026. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.
Sundar Pichai Says Alphabet Can't Build AI Capacity Fast Enough, and Anthropic Has Secured 5 Gigawatts of It.
Alphabet (NASDAQ:GOOG)(NASDAQ:GOOGL) said something striking on its second-quarterearnings callin July. Even after committing to as much as $205 billion of capital spending this year, the company still can't build artificial intelligence (AI) computing capacity as fast as customers want it. "[W]e continue to be supply constrained -- a sign of momentum and rapid adoption," CEO Sundar Pichai said in his remarks on the quarter. 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 " Yet Alphabet has agreed to hand multi-gigawatt blocks of that scarce capacity to a fast-growing outside customer: Anthropic, the AI company behind the Claude models. And a look at Alphabet's underlying business performance shows why the company is racing to sell its capacity to major customers like Anthropic -- even if it's scarce. Image source: Alphabet Inc. Selling scarce capacity is a great business Google Cloud, the segment that sells cloud computing to outside customers, grew revenue 82% year over year to $24.8 billion in the second quarter. That was up from 63% growth in the first quarter. The profit is growing even faster than the revenue. Google Cloud's operating income more than tripled year over year, from $2.8 billion to $8.8 billion -- after reaching $6.6 billion in the first quarter. The segment's operating margin came in at about 36%, versus about 21% in the year-ago quarter and 33% in the first quarter of this year. And the contracted work keeps piling up. Pichai said cloud backlog (future revenue from signed contracts) grew to about $514 billion in the second quarter, up from $462 billion at the end of the first quarter. That backlog is now more than four times the revenue Alphabet's entire business produced last quarter. How much of it is Anthropic? Alphabet doesn't break out the number, but the disclosed pieces -- even if they lack financial details -- are big. Last October, Anthropic agreed to expand its use of Google Cloud in a deal giving it access to up to 1 million of Google's tensor processing units (TPUs), the AI chips Google designs in-house, with well over a gigawatt of capacity coming online in 2026. Google Cloud said the agreement was worth tens of billions of dollars. This spring, the relationship got much bigger. In early April, Anthropic secured multiple gigawatts of next-generation TPU capacity from Google and chip partner Broadcom, coming online starting in 2027 -- about 5 gigawatts in all, CNBC reported. Anthropic will access that capacity through Broadcom, according to a Broadcom securities filing. Weeks later, Google agreed to invest up to $40 billion in Anthropic itself, putting in $10 billion right away with as much as $30 billion more tied to performance milestones. Worth noting from that Broadcom filing, though, is that Anthropic's use of the expanded capacity "is dependent on Anthropic's continued commercial success." That is the honest risk in this arrangement. To be fair, Anthropic said in April that its run rate revenue (its recent revenue pace, annualized) had surpassed $30 billion, up from about $9 billion at the end of 2025. Growth like that is extraordinary. But it means a meaningful slice of Alphabet's contracted future rests on one young AI developer growing into its commitments, and Alphabet is now an investor in that developer on top of being its supplier. The build-out still has to be paid for Of course, Alphabet has to build all of this capacity before anyone can rent it. The company raised its 2026 capital expenditures guidance in July to $195 billion to $205 billion. In the second quarter, capital spending of $44.9 billion exceeded the $39.1 billion of cash its operations produced. And the funding has gone well beyond cash on hand. Alphabet collected $49.6 billion from stock sales in June and issued senior notes (a form of debt) for another $20.3 billion of proceeds during the quarter. In other words, the company is financing enormous capacity ahead of the revenue it will carry, and pre-selling chunks of it profitably. What's in it for Alphabet? Probably more of the incredible momentum it's already seeing: Faster cloud revenue growth, a segment margin up from about 21% to about 36% in a year, and a $514 billion pile of signed contracts. So, there's a lot to like here. The supply constraint Pichai described is another way of saying Alphabet has pricing power, and the Anthropic agreements convert that scarcity into contracted revenue years into the future -- something that should help an already thriving cloud business over the long haul. And shares trade near $339 as of this writing, at about 23 times next year's expected earnings, which is arguably a reasonable price for a company growing total revenue by 24% (with an explosive cloud business underneath). Should you buy stock in Alphabet right now? Before you buy stock in Alphabet, 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 Alphabet 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 $440,710!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,335,252!* Now, it's worth noting Stock Advisor's total average return is 978% -- a market-crushing outperformance compared to 213% 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 31, 2026. Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Broadcom. The Motley Fool has a disclosure policy.
Cerebras vs. SpaceX: Which 2026 IPO Is the Better AI Stock to Own for the Next 5 Years?
Cerebras Systems (NASDAQ: CBRS) and Space Exploration Technologies (NASDAQ: SPCX), known as SpaceX, are two prominent companies that went public in 2026. Cerebras started trading on May 14, while SpaceX followed on June 12. Cerebras builds wafer-scale artificial intelligence (AI) systems (computers built around a single large processor) and sells access to its computing power through the cloud. SpaceX operates reusable rockets, the Starlink satellite network, and an AI segment that includes the Grok large language model and AI computing infrastructure. 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 " Image source: Getty Images. Cerebras is much smaller than SpaceX in terms of market capitalization. However, its cloud revenue is growing rapidly at a time when more AI spending is shifting from training models toward inference or running them in production. SpaceX has already generated nearly $2.6 billion in revenue from the AI business in the second quarter of fiscal 2026 (ending June 30). But it also has its profitable Starlink-driven Connectivity business to help fund that expansion. Hence, the key question is whether Cerebras' faster growth potential can outweigh SpaceX's greater financial strength over the next five years. Cerebras could benefit more as AI spending shifts to inference Gartner expects global spending on AI inference to reach $23.3 billion in 2026, overtaking the $19 billion spent on training. Inference is expected to account for 59% of AI-optimized cloud infrastructure spending by 2027. Cerebras is already benefiting from this trend. The company's non-GAAP (generally accepted accounting principles) cloud and services revenue jumped 287% year over year to $127.7 million in the second quarter (ending June 30). Total non-GAAP revenue (core revenue) was up 103.3% year over year to $209.9 million, ahead of management's non-GAAP revenue guidance of around $194 million.The company also raised full-year core revenue guidance to $880 million to $890 million, up from the previous outlook of $855 million to $865 million. However, Cerebras is exposed to customer concentration risk. Three customers accounted for about 76% of the company's second-quarter revenue. Additionally, while Cerebras had $25.4 billion in remaining performance obligations (RPO) at the end of the second quarter, only 22% is expected to be recognized as revenue over the two years ending June 2028. SpaceX can fund its AI expansion more easily SpaceX's Connectivity segment generated around $4.3 billion of revenue and roughly $1.7 billion of operating income in the second quarter (ending June 30). This profitable business provides SpaceX with an important source of revenue to support its AI expansion. However, the AI segment posted an operating loss of around $1.3 billion while consuming $15.8 billion of capital expenditures during the quarter. Management expects SpaceX to reach a $100 billion annualized revenue run rate by December 2026, but achieving that target will require enormous investment. Which is the better AI-powered pick? Cerebras is currently trading at around 14.9 times analysts' expected 2027 revenue of $2.95 billion. SpaceX is even more expensive at roughly 17.4 times analysts' expected 2027 revenue of $105.47 billion (as of Aug. 24). While SpaceX clearly has the stronger financial base, the company's AI expansion is already extremely capital-intensive. Cerebras appears to offer the better five-year risk-reward balance. The risk is much higher, particularly because of customer concentration and the long timeline for converting its RPO into revenue. But if Cerebras can scale capacity while improving margins, its growth could justify that risk. Should you buy stock in Cerebras Systems right now? Before you buy stock in Cerebras 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 Cerebras 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 $443,461!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,307,633!* Now, it's worth noting Stock Advisor's total average return is 973% -- a market-crushing outperformance compared to 213% 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 26, 2026. Manali Pradhan, CFA has no position 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.
The One Line in Anthropic's S-1 That Amazon Investors Should Read First
New reports indicate that artificial intelligence (AI) lab Anthropic could file its S-1 by the end of the month. Below, I'll detail why Anthropic's public debut carries outsize implications for major backers like Amazon (NASDAQ: AMZN), whose growth is intertwined with the start-up's trajectory. Image source: The Motley Fool. 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 " Reviewing Anthropic's funding and IPO ambitions Reports from Bloomberg suggest Anthropic is aiming for an initial public offering (IPO) that matches or exceeds Space Exploration Technologies' record raise from earlier this summer. Anthropic has already raised roughly $133 billion to date, most recently in a $65 billion Series H round that valued it at $965 billion. This near-trillion-dollar figure reflects Anthropic's explosive growth, with recent quarterly revenue surpassing $11.5 billion and an annualized run rate approaching $65 billion. Why Amazon investors should pay attention to Anthropic's IPO Amazon investors have good reason to monitor the Anthropic offering. Amazon has already invested $13 billion in Anthropic, with commitments for up to an additional $20 billion contingent on commercial milestones. Beyond simple equity ownership, the partnership between Amazon and Anthropic runs deep through AWS. Anthropic uses Amazon's custom silicon for training and inference, including a massive deployment under Project Rainier that utilizes over 1 million Amazon Trainium chips, complemented by its Graviton processors. Anthropic's Claude models power a number of features on Amazon Bedrock for more than 100,000 customers. Meanwhile, the company has pledged more than $100 billion in AWS spending over the next 10 years to secure up to 5 gigawatts of capacity. Assessing Amazon's upside Anthropic's S-1 will provide more precise disclosure around Amazon's ownership. With exact percentages known, investors can better model the position's value. Accurate knowledge of the value of Amazon's stake can help improve forecasts of AWS' revenue acceleration and operating margin expansion driven by Anthropic's compute demands. In turn, I think a fundamental rerating in Amazon stock could follow as investors gain a deeper understanding of Anthropic's influence on Amazon's position in the AI infrastructure supercycle. Should you buy stock in Amazon right now? Before you buy stock in Amazon, 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 Amazon 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 $1,317,883!* 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 24, 2026. Adam Spatacco has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
Anthropic Has a $65 Billion Run Rate. Buy These Stocks to Profit From It.
Anthropic, the owner and operator of the popular Claude chatbot, has an annualized revenue run rate of $65 billion, multiple media outlets just confirmed. That's about seven times what it was at the end of last year. The company has filed with the Securities and Exchange Commission to go public later this year through an initial public offering (IPO) that could value it at $2 trillion or more. But because the AI firm is not yet public, there aren't many ways for retail investors to buy a direct stake in it. 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 " There is an indirect way to get some exposure to Anthropic, however. That's by owning the stocks of companies that have invested heavily in its pre-IPO shares. Image source: Getty Images. That group starts with Amazon (NASDAQ: AMZN). The company's $33 billion investment in Anthropic gave it an impressive 21% stake. Google's parent company, Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), holds a 15% stake in Anthropic and can't invest more because the two are major competitors in the large language model space. (Alphabet owns Gemini AI). Salesforce (NYSE: CRM) has a $5 billion stake in the AI firm. Finally, Zoom Communications (NASDAQ: ZM) has a more modest $1.3 billion stake in it. Like everything else those companies own, their stakes in Anthropic are ultimately owned by their shareholders. So their investors should see a major benefit if Anthropic's IPO brings it a valuation of $2 trillion or more. Several tech firms booked big gains from their SpaceX stakes There's a recent precedent for this. In the second quarter of this year, two major technology firms had the biggest positive impact on overall S&P 500 earnings due to their stakes in other firms. Alphabet reported earnings per share of $9.11, more than three times Wall Street's expectations, driven by $98 billion in unrealized stock gains primarily from its ownership stake in Space Exploration Technologies (NASDAQ: SPCX), which went public that quarter. Similarly, Amazon reported $53.4 billion in income from a revaluation of its investment in Anthropic (pre-IPO companies are officially revalued during each new capital-raising round). Amazon shares soared following the release of its second-quarter results. If Anthropic stages a blockbuster IPO, that investment would be revalued significantly higher again. Neither Amazon nor Alphabet shares have had a particularly great 2026, however. After soaring in 2025, both stocks have delivered much more modest gains this year, mostly due to investors' concerns that their massive investments in AI infrastructure will not produce significant returns on investment. Salesforce's share price is down 22% year to date, as investors fear that AI tools could render the company's software obsolete. It's not clear what the future holds for any of these companies, of course. AI technologies are already proving to be a seriously disruptive force -- both positive and negative -- for many industries. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 965%* -- a market-crushing outperformance compared to 212% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks " *Stock Advisor returns as of August 24, 2026. Matthew Benjamin has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Salesforce, and Zoom Communications. 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. 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. 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. 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.
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.