Wall St looks for best day in month as Anthropic's IPO filing propels AI stocks
The S&P 500 and Nasdaq were on track for their biggest one-day gains in more than a month on Monday. Technology stocks rose after Anthropic filed paperwork to sell shares to the public for the first time. The filing brought artificial intelligence (AI) back into focus during a week full of company earnings reports.
Anthropic reported large losses but also strong revenue growth in its filing for a US initial public offering (IPO). It explained its goal of building AI systems that could change the global economy, even though developing this technology is very expensive.
The AI company is moving forward with plans to go public, even though fewer companies are now planning to sell shares this autumn. Unstable markets have led companies to delay their stock offerings.
"The conditions are challenging, to say the least, for deciding exactly when this IPO will happen. A lot is at stake, not just for the company but for the AI industry," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield.
Semiconductor and chip-related companies, which are widely seen as some of the biggest winners from the AI boom, led the market gains. The Philadelphia chip index rose by more than 3 per cent after several weeks of sharp market swings.
Anthropic's filing comes as investors pay closer attention to whether spending on AI is making companies more money. About one-third of S&P 500 companies are due to report their earnings this week. These include major cloud computing companies Alphabet, Microsoft and Amazon. Investors will look for signs that their AI investments are helping their businesses grow.
This attention follows a weak response to earnings reports from some of the biggest companies linked to AI last week. Meta disappointed investors by raising its expected AI spending for the year again and saying it would sell new shares to help pay for the costs. Tesla's shares also faced pressure after its earnings report.
Meta said on Monday that it plans to raise up to $95 billion by selling shares to pay for its AI expansion. The money will support data centres, cloud computing capacity and other infrastructure. Its shares were last up 0.2 per cent.
AI-related stocks have faced pressure this month because investors worry that spending funded by borrowing money could become harder to justify as borrowing costs rise.
However, investor confidence improved on Monday. Companies that provide cloud computing services built mainly for AI, such as CoreWeave and Nebius, recovered from early losses and began trading higher.
Other companies linked to AI also performed well. These included photonics product makers Lumentum and Coherent, which make products that use light, as well as server makers Dell and Hewlett Packard Enterprise.