Anthropic Needs Nearly $2.7B in Additional Monthly Revenue to Reach $100B Run Rate by Year-End - Taiwan…

PPI Spikes

Please click here for an enlarged chart of Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM).

Note the following:

• This article is about the big picture, not an individual stock.  The chart of TSM stock is being used to illustrate the point. TSM manufactures cutting edge AI chips for the likes of NVIDIA Corp (NVDA) and Advanced Micro Devices, Inc. (AMD).
• The chart shows TSM stock is falling after reporting record earnings.
• The chart shows TSM stock has fallen well below the low band of zone 1 (resistance).
• The chart shows TSM stock is well above the high band of zone 2 (support).
• RSI on the chart shows TSM is now oversold.
• The fact that TSM is falling after reporting record earnings is another data point showing that in this phase of AI the character of the stock market is changing.
• Here are the details of TSM earnings:
  • For Q3, earnings came at $4.60 vs. $4.46 consensus.
  • For Q3, revenues came at $46.72B vs. $45.67B consensus. This is a 41.1% year-over-year rise.
  • For Q4, TSM is guiding revenue of $52.3B – $54.3B vs. $50.22B consensus.
• Anthropic is one of a handful of top companies that are driving AI.  Anthropic made financial disclosures yesterday at its investor day ahead of its planned IPO.  Here are the key points:
  • Q3 revenue was $16.8B, up from $11.6B in the Q2 and $4.7B in Q1.
  • Q3 revenue translates to an annualized $67.2B based on average quarterly revenue.
  • Anthropic reported positive free cash flow, an adjusted gross margin of 85%, and an adjusted operating margin exceeding 11%.
  • Anthropic is targeting an IPO valuation exceeding $2T.
• Here is our analysis of Anthropic’s financial disclosures:
  • Revenue growth slowed sharply to 45% in the Q3 from approximately 147% in the Q2.  The important point is not that Anthropic’s revenue growth is weak. Growing revenue 45% in a quarter is extraordinary, especially at this scale.  The issue is that growth is slowing at a time when investor expectations are extremely high.
  • Earlier expectations were for Anthropic to exceed a $100B annualized revenue run rate by year end, with some investors projecting $120B.  The latest disclosures have raised questions about those expectations, though some analysts still project a year end run rate of over $100B.
  • To reach a $100B annualized run rate by December, Anthropic would need monthly revenue of approximately $8.3B, compared with average monthly revenue of $5.6B in Q3.
  • The bigger issue for the stock market is the disconnect between AI growth and the expectations already built into stock prices.  AI demand remains strong, but slowing growth at major AI model developers raises questions about the returns on the massive investments being made by hyperscalers and AI infrastructure companies.
• The stock of neocloud company CoreWeave Inc (CRWV) has seen panic selling.  The reason is CoreWeave is heavily indebted.  The yield on CoreWeave’s 9.652% debt maturing in 2032 rose to 15% in panic selling.  CRWV dragged down the stocks of Oracle Corp (ORCL), Nebius Group NV (NBIS), and IREN Ltd (IREN).
• We have been sharing with you that the character of the AI driven stock market is changing.  Now, Wall Street is catching up. It is increasingly important for investors to build their knowledge of this new phase of AI and how it is different from the prior phase.  Risks are rising, but there are also great opportunities ahead, especially in physical AI. 
• Ukraine has resumed strikes on Russian refineries even though President Trump declared an energy ceasefire.  Prudent investors should carefully watch the consequences of Ukrainian President Zelensky defying President Trump.  President Trump is wanting to import diesel from Russia to reduce the price of diesel ahead of the midterm elections.  Ukraine bombing Russian refineries brings into question Russia’s ability to provide the diesel President Trump wants.
• Producer Price Index (PPI) came hotter than expected.  Here are the details:
  • Headline PPI came at 1.3% vs. 0.5% consensus.
  • Core PPI came at 0.7% vs. 03% consensus.
• Prudent investors closely watch retail sales data as the U.S. economy is 70% consumer based.  Retail sales are hotter than expected.  Here is the latest retail sales data:
  • September headline retail sales came at 0.8% vs. 0.3% consensus.
  • September retail sales ex-auto came at 0.9% vs. 0.3% consensus.
• Initial jobless claims came at 199K vs. 200K consensus.
• Normally, the foregoing economic data would have caused yields to rise and bonds to fall.  However, today yields are falling and bonds are rising.  In our analysis, the reason for this behavior is that money is flowing out of AI stocks and into bonds.  

Magnificent Seven Money Flows

Most portfolios are now heavily concentrated in the Mag 7 stocks.  For this reason, it is important to pay attention to early money flows in the Mag 7 stocks on a daily basis. 

In the early trade, money flows are positive in Apple Inc (AAPL).

In the early trade, money flows are negative in Amazon.com, Inc. (AMZN), Alphabet Inc Class C (GOOG), Meta Platforms Inc (META), Microsoft Corp (MSFT), NVIDIA Corp (NVDA), and Tesla Inc (TSLA).

In the early trade, money flows are negative in SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust Series 1 (QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (USO).

Oil

API crude inventories came at a draw of 11.12M barrels vs. a consensus of a build of 1.9M barrels.  This is bullish data for oil.  

Bitcoin

Bitcoin (BTC) is seeing selling.

What To Do Now

Consider continuing to hold good, very long term, existing positions and add tactical positions based on signals.

The Arora Report is known for its accurate calls. Most recently, we correctly called the rally from recent stock market lows and the 2026 semiconductor decline before a 25% drop in the Semiconductor ETF (SMH). In gold, we bought at an average price near $1,105, close to cycle lows, and took partial profits near $5,400, close to cycle highs. Please click here to get our free forever Generate Wealth Newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.