Anthropic Targets $200 Billion: 8 Key Items Shaping the Stock Market Monday
These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a lower market open as we begin the trading week.
1. Monday marks 60 days since the U.S. and Iran signed a memorandum of understanding that called for a wider peace deal to be negotiated within that timeframe. After multiple flare-ups and suggestions of an imminent accord, there do not appear to be any concrete plans to end the 24-week war. Shipping through the Strait of Hormuz slowed over the weekend, with no transits recorded on Sunday, according to tracking data from Kpler reported by Reuters. (CBS News)
Iran’s hard-line leaders huddled in Tehran and came up with a different plan, according to Iranian and Arab officials. In their view the pact was likely just an attempt by the U.S. and Israel to take pressure off the global economy and buy time for a bigger attack down the road. Instead of putting faith in talks, they took the past two months to prepare for a bigger fight. (WSJ)
At best, the above points to a continued standoff between the U.S. and Iran, but reporting by The Wall Street Journal and others raises questions over the likelihood of renewed attacks that would bring further disruption. We will continue to track developments, but as we pointed out last week, several indicators, including the Cboe Volatility Index ($VIX) closing last week at its lowest level this year, point to an increasingly complacent market environment. Add in seasonally slower trading volumes and we’ll maintain our cautious stance with the Portfolio.
2. The dollar fell to its weakest level in three months as investors scaled back expectations for further Federal Reserve interest-rate increases following a run of softer US economic data. The Bloomberg Dollar Spot Index dropped for a third day and hit its lowest since May 15. That came as traders cut the chance of a Fed hike next month to just one-in-three, down from about 75% in late July. (Bloomberg)
Given the items discussed above, we’ll want to follow oil and related prices carefully ahead of Friday’s Flash August PMI from S&P Global and continue to do so leading up to ISM’s August PMI data that will be published in early September. We’ll also continue to listen to management team comments about pricing as we barrel toward the end of the current earnings season and shift gears into the late August to September investor conference season.
3. The calm could continue this week, as there won’t be any tier-one economic data releases. The Census Bureau will report residential construction data on Tuesday, and on Wednesday the Federal Open Market Committee will release the minutes from its meeting in late July. S&P Global will release its Manufacturing and Services Purchasing Managers’ Indexes on Friday. Twelve S&P 500 companies will report quarterly results this week, with retailers taking center stage. Home Depot, will announce earnings on Tuesday, followed by Lowe’s, Target, and TJX Cos. on Wednesday. Walmart will report on Thursday. (Barron’s)
The shift to retail focused earnings this week and next will help round out the remaining percentage of the S&P 500 that has yet to report. As we digest the reports, we’ll be looking for clues about overall consumer spending and where consumers are opting. Comparing company comp sales figures for the reported period and sizing those figures up against the 6.6% year-over-year increase for Retail-only sales between May 2026 and July 2026 will tell us which companies picked up wallet share and those that lost it.
With polls and other data pointing to consumers being increasingly cost conscious, we continue to favor the positioning offered by Costco ($COST), TJX ($TJX) and Amazon ($AMZN) shares. A recent poll by the Pew Research Center found about three-quarters rating economic conditions negatively and Fox News polling found three-quarters rating the economy negatively, including 41% calling it poor.
4. Wall Street is heading into the final stretch of the second-quarter earnings season riding the strongest pace of profit growth in five years — alongside fading bets on a Federal Reserve interest-rate hike, which should support stock performance deep into the autumn. The market’s most-watched analysts, however, are still forecasting end-of-year price targets for the S&P 500 that suggest meager gains over the coming months — even as they predict impressive profit growth over the coming quarters, without fretting too much about the amount investors will pay for it. (Barron’s)
There could be a few reasons why those Wall Street price targets haven’t budged all that much despite the current earnings season by and large showcasing strong results. Questions over the duration of U.S-Iran war, inflation pressures, company comments at upcoming investor conferences and the outcome of the mid-term elections are some of the things investors are looking to puzzle through.
There is also the current P/E valuation of about 22-times consensus 2026 EPS figures for the S&P 500, which as we touched on last week have been positively impacted by tariff refunds and private company investments. Those factors helped push the 2026 consensus EPS growth rate for the S&P 500 to about 30% this year compared to 2025. Measured against that, the expected 13% EPS growth rate for 2027, while still a double digit figure, is far slower year over year. To us here at the Portfolio, that’s another reason to tread carefully near-term, and look for opportunities in the event of a market pullback.
5. Stripe Inc. has finalized an agreement to acquire OpenRouter Inc., a startup that helps companies switch between artificial intelligence models, for more than $7 billion, according to people familiar with the matter. The deal, just months after OpenRouter raised money at a reported $1.3 billion valuation, underscores the demand from businesses to find the most cost-friendly AI solutions. It could also give Stripe, a payments processing firm, a stronger footing in the fast-growing artificial intelligence sector. (Bloomberg)
We’ll have to see how this plays into recent headlines about Stripe targeting PayPal ($PYPL), but the above serves as a reminder that companies are continuing to use M&A to plug product, geographic and technological holes in their roadmap.
The valuation jump is also something we’ll keep in mind for the Portfolio’s position in Neostellar Capital ($NSLR) shares and potential financings for its private company holdings.
6. As Anthropic prepares for what could be one of the biggest IPOs on record, Wall Street is looking further into the future than it commonly does to put a price on the AI company, valuing it based on how much revenue it could generate two years from now. Anthropic is projecting 2028 revenue of roughly $190 billion to $200 billion, according to two people familiar with the company’s financials, a figure that has not previously been reported. The projection dwarfs the $47 billion revenue “run rate,” reflecting the firm’s current pace of business, that the company publicized as recently as May… (Reuters)
That $200 billion 2028 figure captures quite the expected ramp in Anthropic AI revenue over the ensuing quarters. It’s also a figure that not only points to further AI adoption and expanding usage but it’s also one that will be put under the “how do we get there” IPO microscope. That roadmap as well as the 2028 target will likely become the yardstick by which other AI businesses, including the ones at Microsoft ($MSFT) and Meta ($META) are measured.
While some may focus on that top-line figure, let’s remember Anthropic also posted its first positive adjusted operating profit of about $559 million. How that scales over the coming quarters should be much of a focus as the revenue roadmap during the upcoming IPO roadshow. That discussion along with multi-year capex plans will help investors wrap their heads around cash flow prospects.
7. Economic data today per TipRanks: Empire Manufacturing Index (August), NAHB Housing Market Index (August).
8. Companies reporting today per TipRanks: AM – Geely Automobile Holdings Limited ($GELYF), InspireMD ($NSPR) PM – Fabrinet ($FN).
More Pro Portfolio
- Locking in Gains, Setting New Price Target for This Data Center Play
- We’re Tracking 27 Portfolio Signals Across Our Investing Themes
- Weekly Roundup: An Electric Week for the Market Was Also a Great One for the Portfolio
At the time of publication, TheStreet Pro Portfolio was long AMZN, COST, META, MSFT, NSLR and TJX.
