《Chiu's Viewpoint》US inflation data rebounded, US bond yields remained high, and negative news surrounding artificial intelligence (AI) and the semiconductor industry emerged one after another. These factors,叠加 together, not only caused the Philadelphia Semiconductor Index to decline for six consecutive sessions but also reignited market concerns that the US stock market bubble is about to burst. Both the US 2-year and 10-year Treasury yields spiked when inflation data was released, then quickly retreated, reflecting that the market is not trading on a "rate hike rally" but has instead initiated a "recession trade," with funds flowing into US Treasuries for safe-haven purposes.
Corporate bond markets are also permeated with panic. The yield on unsecured bonds of emerging cloud provider CoreWeave (US.CRWV) maturing in 2032 surged to over 15%, as the market fears high borrowing costs will hurt highly leveraged companies, leading to sell-offs of AI-related firms with extremely high default risks amid the "recession trade." Meanwhile, based on third-quarter revenue disclosed by AI company Anthropic, the market estimates it will struggle to reach its target of $100 billion in annualized recurring revenue (ARR) by year-end, further fueling market panic by highlighting problems in "AI commercialization." The author believes that the simultaneous emergence of multiple negative factors merely represents a bearish momentum play, insufficient to confirm that AI investment has peaked or that the bubble has arrived.
Anthropic achieved adjusted net profits for two consecutive quarters, with its adjusted gross margin reaching 85% in the third quarter, proving that leading AI companies are beginning to achieve profitability amid rapid growth. Furthermore, enterprises are increasingly inclined to purchase AI application products offered by cloud providers. According to Microsoft (US.MSFT)'s previous earnings report, nearly 90% of its full-year cloud revenue (including Azure) as of the end of July came from customers outside of cutting-edge model companies like OpenAI. In terms of remaining performance obligations (RPO), quarter-on-quarter growth was also driven by customers outside of frontier model companies, indicating that cloud providers' AI revenue is no longer dependent on leading AI firms but is instead driven by enterprise purchases of AI applications. Therefore, investors should pay attention to the upcoming quarterly earnings reports from cloud providers, which may cause the market to reassess the progress of AI commercialization.
On the US economic front, quarterly results from several large US banks show that average consumer loan balances, including credit cards, continue to rise. Wells Fargo (US.WFC) management believes that despite high price levels, consumers remain a key source of economic resilience; JPMorgan Chase (US.JPM) management shares the same view and states that the strong US labor market keeps consumer financial conditions healthy. Looking at Bank of America's consumer credit net charge-off ratio, it further declined to 0.81% in the third quarter, with commercial credit net charge-off ratios also declining. Both consumers and businesses remain capable of normal repayments, and there are currently no signs of systemic risk. From another perspective, the market entering the peak earnings season for large tech stocks with pessimistic sentiment and expectations might actually be a good thing. Senior Analyst,华盛証券, Chiu Tsz Wai
*The author does not hold any of the aforementioned stocks
*Articles published in Economic Times under named or anonymous authorship reflect the personal opinions of the authors and do not represent the stance of Economic Times. Economic Times serves as a platform providing free expression of views.
Corporate bond markets are also permeated with panic. The yield on unsecured bonds of emerging cloud provider CoreWeave (US.CRWV) maturing in 2032 surged to over 15%, as the market fears high borrowing costs will hurt highly leveraged companies, leading to sell-offs of AI-related firms with extremely high default risks amid the "recession trade." Meanwhile, based on third-quarter revenue disclosed by AI company Anthropic, the market estimates it will struggle to reach its target of $100 billion in annualized recurring revenue (ARR) by year-end, further fueling market panic by highlighting problems in "AI commercialization." The author believes that the simultaneous emergence of multiple negative factors merely represents a bearish momentum play, insufficient to confirm that AI investment has peaked or that the bubble has arrived.
Anthropic achieved adjusted net profits for two consecutive quarters, with its adjusted gross margin reaching 85% in the third quarter, proving that leading AI companies are beginning to achieve profitability amid rapid growth. Furthermore, enterprises are increasingly inclined to purchase AI application products offered by cloud providers. According to Microsoft (US.MSFT)'s previous earnings report, nearly 90% of its full-year cloud revenue (including Azure) as of the end of July came from customers outside of cutting-edge model companies like OpenAI. In terms of remaining performance obligations (RPO), quarter-on-quarter growth was also driven by customers outside of frontier model companies, indicating that cloud providers' AI revenue is no longer dependent on leading AI firms but is instead driven by enterprise purchases of AI applications. Therefore, investors should pay attention to the upcoming quarterly earnings reports from cloud providers, which may cause the market to reassess the progress of AI commercialization.
On the US economic front, quarterly results from several large US banks show that average consumer loan balances, including credit cards, continue to rise. Wells Fargo (US.WFC) management believes that despite high price levels, consumers remain a key source of economic resilience; JPMorgan Chase (US.JPM) management shares the same view and states that the strong US labor market keeps consumer financial conditions healthy. Looking at Bank of America's consumer credit net charge-off ratio, it further declined to 0.81% in the third quarter, with commercial credit net charge-off ratios also declining. Both consumers and businesses remain capable of normal repayments, and there are currently no signs of systemic risk. From another perspective, the market entering the peak earnings season for large tech stocks with pessimistic sentiment and expectations might actually be a good thing. Senior Analyst,华盛証券, Chiu Tsz Wai
*The author does not hold any of the aforementioned stocks
*Articles published in Economic Times under named or anonymous authorship reflect the personal opinions of the authors and do not represent the stance of Economic Times. Economic Times serves as a platform providing free expression of views.
