The tech-heavy Nadaq Composite will enter into a high-stakes week, specifically for AI-linked trade, with investors assessing Nvidia Corp.'s quarterly results due on Tuesday, and the much-anticipated Anthropic IPO.
Nvidia shares faced a steep selloff last week triggered by controversies surrounding long-time CEO Jensen Huang's two affairs (one involving a suspected Chinese spy); despite this, many AI-linked stocks steadied in recent days.
Additionally, all the three indices posted their best performance since August with S&P 500 advancing 2.5%, Nasdaq adding 2.3%, and the Dow Jones Industrial Average gaining 2.1% on a weekly basis.
What To Expect From Nvidia's Quarterly Results?
After having lost close to $2 trillion in market capitalisation, from $5.8 trillion in early October to $3.9 trillion as of Friday as per LSEG data, Nvidia will assume centre stage once again this week as investors eye third quarter earnings from the semincon giant at the heart of the AI trade.
The chipmaker's stock has tanked over 6% in the last two sessions itself, following reports of Huang's second affair and his subsequent exit from the firm as CEO. In the interim, hitherto Chief Financial Officer (CFO) Colette Kress has been charged with leading the tech company.
Analysts are expecting Nvidia to register a 90% growth on revenue of $109 billion in the company's fiscal third quarter, as per to LSEG data.
ALSO READ: Anthropic Sets IPO Price Band At $70-$78 Per Share, Eyeing Historic $1-Trillion Nasdaq Debut
The Big AI IPO
Anthropic's $64.4 billion fundraise has been one of the most anticipated issues of the year, closely following the Elon Musk-led Space X IPO. The Claude-maker's IPO is slated to give the company a valuation of up to $1.4 trillion and will also be a test for Wall Street's AI appetite following the US mid-term election verdict and Nvidia's trade falter. Price band for the AI lab's IPO has been fixed at $70-$78 per share.
"If you have Anthropic come out and then the IPO does poorly, I think that is probably another cautionary sign that investors are getting a little bit more stressed with the AI trade," Patrick Ryan, chief investment strategist at Madison Investments told Reuters.
AI trade on the Wall Street had wobbled even before the Jensen Huang induced selloff in Nvidia. The blue sweep in America's mid-term election meant a stricter regulation on data centre buildout for investors, therefore, keeping them cautious around AI-linked stocks.
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