There are events that, in hindsight, were milestones for artificial intelligence fever, and we may now be in the midst of another game-changing moment. 

Wall Street looks to be wading into AI like never before, and—for better or worse—it’s likely to only supercharge the stock market roller coaster.

Investors in Anthropic, the AI darling behind Claude, expect the start-up to float at a valuation of at least $2 trillion—more than twice its current valuation—in October, the Financial Times reported.

The news came hot on the heels of another eye-popper this week: Nvidia is working with the biggest names on Wall Street, including BlackRock and Goldman Sachs, to mobilize $500 billion to finance AI infrastructure.

Anthropic going public at $2 trillion would be the largest-ever initial public offering—and one that would have Wall Street salivating. If SpaceX’s recent IPO is anything to go by, it would draw retail investors into the AI powerhouse at a frenzied rate. The gargantuan IPO would also raise the stakes at a time of frayed nerves in markets over the sustainability of the AI boom and surging spending.

Nvidia’s financing plans, too, should raise eyebrows. CEO Jensen Huang described it as making AI infrastructure its own type of standardized investment—chips as the bedrock of a new class of asset-backed security. That could set the stage for the likes of “collateralized chip obligations,” a product reminiscent of derivative packaging contributing to the 2008-09 financial crisis. The going would only remain good for such products if spending on AI continues to impress and Nvidia’s chips remain the favorite.

AI has always been about promise and expectations, with doubt easy to brush off as backwards thinking.

But even optimists should know the music will stop if productivity and adoption don’t live up to expectations. The fallout from that would quickly cascade down to a $2 trillion stock—and likely cause untold damage to exotic products based on chips in data centers.

—Jack Denton

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Cisco is the latest tech hardware company to report strong financial results driven by ongoing artificial-intelligence demand. Its networking segment—which includes gear used in AI data centers—has grown as enterprise demand for AI infrastructure continues to rise. 

• The company reported adjusted earnings of $1.22 a share on revenue of $17.3 billion for the fiscal fourth quarter, beating expectations. Networking revenue was $9.79 billion, higher than the $9.66 billion that analysts expected and a 28% increase from a year ago.

• In May, Cisco said it had taken $5.3 billion in AI infrastructure orders from hyperscalers so far in the fiscal year, which led it to raise its full-year expectations for orders. Now, Cisco’s reported fiscal 2026 AI infrastructure orders are $9.3 billion, which was ahead of that updated forecast.

• Gross margins dipped to 66.3% from 68.4% a year ago, possibly because of the rising cost of components used in AI hardware, such as memory. Cisco isn’t the only company riding higher on the demand for AI hardware. Super Micro Computer reported strong demand for servers.

• Separately, Coherent reported better-than-expected earnings as the optical-networking company’s technology plays a growing role in connecting AI infrastructure. Revenue surged 34% to $2.05 billion, and it expects first quarter of fiscal 2027 on revenue of $2.3 billion at the midpoint.  

What’s Next: Cisco expects total fiscal 2027 earnings to be between $5.05 and $5.11 a share on revenue between $72.2 billion and $73.4 billion, ahead of analyst expectations. CEO Chuck Robbins said the company was “well positioned” to support customers however and wherever they decide to deploy AI.

—Angela Palumbo and Nate Wolf

SpaceX CEO Elon Musk was characteristically optimistic during this week’s employee town hall meeting, where he discussed artificial intelligence, Starlink, and SpaceX’s future. He projected that AI-based internet traffic will be 1,000 times human traffic in five years. He also said Starlink had 22 million mobile subscribers.

• Starlink, the company’s satellite communications operation, ended the second quarter with about 12 million fixed wireless internet customers. Musk is likely referring to partnerships with existing wireless companies for satellite-to-cell connectivity that fills in dead zones. SpaceX didn’t respond to Barron’s request for comment.

• SpaceX launched 24 Starlink satellites to low-Earth-orbit on Tuesday. Second-quarter earnings last week showed its satellite business generated $4.29 billion, almost 70% of the company’s total revenue, while the AI compute and next-gen Starship hardware divisions posted operating losses.

• Musk wants SpaceX to have 10 gigawatts of AI computing power up and running by the end of 2027. That’s a tenfold increase from its recent AI capacity and could represent 15% to 20% of total U.S. AI computing capacity running. That’s assuming Musk can pull it off.

• To accelerate this AI drive, on Wednesday the company launched Grok 4.6—the latest version of its artificial intelligence assistant, which comes in cheaper than rivals OpenAI’s ChatGPT and Anthropic’s Claude. Musk described the latest iteration as “Smart, fast & amazing bang for buck,” in a post on X.

What’s Next: Musk’s employee talk went beyond Starlink. AI is on his mind, too, and he says they have to win in AI because the future is overwhelmingly about that and robots. SpaceX stock’s next lockup period ends Aug. 20, giving investors a chance to position their portfolios ahead of time.

—Patrick O’Donnell, Al Root, and Janet H. Cho

Wall Street’s worries about the economy are the same now as they were before the latest inflation numbers: rising prices, uncertainty about the Iran war’s impact on oil, and whether the Federal Reserve will cut or hike rates. Investors are still all in on the market’s summer rally.

• The monthly consumer price index report certainly could have been much worse. July inflation quickened ever so slightly from June, with the monthly reading up 0.1% even if the annual rate inched lower to 3.4% from 3.5%. Core inflation of 0.2% for the month met expectations.

• Luke Rahbari, CEO at Equity Armor Investments, says it’s basically what the Fed wants to see. Namely, it doesn’t have to do anything. Trader expectations for a September rate hike fell to 38%, from around 50% the previous day, on the CME Group’s FedWatch tool.

• Global crude is up more than 16% in the past month despite President Donald Trump saying America was in “total control” over the Strait of Hormuz. For Seema Shah of Principal Asset Management, rising oil prices are going to be a top worry until the shipping waterway is open.

• The elevated risks remain, though, for a rate hike later this year if energy disruptions are sustained. The threat of an AI-induced rise in inflation also can’t be ignored, she said. “Upside inflation risks will remain top of mind for the foreseeable future.” 

What’s Next: Having two inflation wild cards still in the deck this late in the summer will probably add more volatility to a market that is already dealing with the Fed under new Chairman Kevin Warsh. The Merrill Lynch Option Volatility Estimate remains more than 16% higher than prewar levels.

—Martin Baccardax

Cerebras stock has been on a wild ride since the AI chip maker went public in May. That probably won’t change soon, with the company reporting a second-quarter loss on Wednesday.

• Cerebras posted an adjusted operating loss of $34 million, which was narrower than the $63 million loss analysts were looking for. The company’s “core” revenue, which strips out certain items, also beat expectations.

• There was a sour note in the results, though—the company’s backlog remained steady, at about $25 billion. That means the total dollar value of fulfilled orders didn’t grow over the quarter, which could fuel worries about flat demand.

• Cerebras operates in a crowded field of AI chip producers trying to steal some business from dominant player Nvidia. The company is best known for its Wafer-Scale Engine chips, which are roughly the size of a dinner plate.

• Cerebras listed in May at an offering price of $185, and the stock has swung between $162 and $266 in recent months. It closed 12% higher at $262 on Wednesday after a slew of solid tech earnings revived the AI trade.

What’s Next: The big question now is when Cerebras will start turning a profit. Guidance for the third quarter beat expectations, and the company raised its 2026 outlook. For the year, the company is now projecting somewhere around a -18% adjusted operating margin, up from -30% when it reported the first quarter in June.

—Adam Levine and George Glover