📈 Anthropic's $60B Moonshot

Good morning.

⚡ The Fast Five → Trump announces $20B investment in US Data Centers, Nvidia unveils $3k desktop AI computer, Cintas proposes $5.1B takeover of UniFirst, Amazon invests $11B in AI infrastructure, Anthropic raises on $60B Valuation

🔎 Market Trends → Wall Street ends lower as inflation fears mount; US Futures Stabilize After Sharp Selloff

And now…

⏱️ Your 5-minute briefing for Wednesday, January 8, 2024:

MARKET BRIEF
Before the Open

Pre-Market

Fear & Greed

Markets in Review

Tech Weakness Weighs on Nasdaq as Energy and Healthcare Shine

The Nasdaq tumbled 1.9% to 19,489.7, the S&P 500 fell 1.1% to 5,909, and the Dow slid 0.4% to 42,528.4. Technology led sector declines, while energy and healthcare posted gains.

The Big Picture:

Tech stocks drove markets lower Tuesday as major players like Nvidia (NVDA) and Amazon (AMZN) faced selling pressure. The services sector, however, offered a bright spot, expanding faster than expected as business activity rebounded—a sign that the economy retains momentum despite challenges.

The labor market also showed resilience, with job openings reaching a six-month high. Combined with a robust holiday season for e-commerce, these signals underline the economy's adaptability, even as trade data showed a widening deficit.

Oil rose 1% to $74.27/barrel, reflecting steady demand. Gold gained 0.7% to $2,664.80/oz, while silver edged up 0.2% to $30.65/oz, signaling ongoing interest in safe-haven assets.

Market Movers:

• Nvidia (NVDA): Dropped 6.2%, the Dow's worst performer, as investors reassessed valuations in the chip sector after a strong run in 2024.

• Moderna (MRNA): Jumped +12%, leading the S&P 500, on strong demand for its new vaccine and optimism about its expanding product pipeline.

• Paychex (PAYX): Gained +2.4% after announcing a $4.1 billion acquisition of Paycor HCM, boosting its AI capabilities in HR and payroll solutions.

What They’re Saying:

"The services sector continues to show remarkable resilience, providing a counterweight to weakness in manufacturing and tech," Jefferies noted in a client report.

WHAT WE’RE WATCHING
Events

• Today: Automatic Data Processing, Inc. - ADP Non-Farm Employment Change - 8:15am

• Why You Should Care: Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity

• Today: Department of Labor- Jobless Claims - 8:30am

• Why You Should Care: Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy.

• Today: Federal Reserve- Federal Open Market Committee (FOMC) Meeting Minutes - 2:00pm

• Why You Should Care: It's a detailed record of the FOMC's most recent meeting, providing in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.

Earnings Reports

• Today: Albertsons Companies, Jefferies Financial Group, Helen of Troy, Simply Good Foods, Acuity Brands

• Tomorrow: Infosys Limited, PriceSmart, Comtech Telecommunications

MARKET BRIEF
Leading News

Anthropic's $60B Valuation Bid Shows AI's New 'Manhattan Project' Moment

Why it matters:

This potential mega-funding round signals that smart money believes we're still in the early innings of the AI revolution – and the stakes just got dramatically higher.

Zoom Out:

Just as Manhattan Project investments fundamentally reshaped the 20th century, AI appears to be this generation's watershed technology. Anthropic's meteoric rise – from startup to potential $60B unicorn in mere years – mirrors the exponential growth curve of AI itself.

The battle for AI supremacy is creating strange bedfellows: Amazon ($AMZN) and Google ($GOOGL) are both backing Anthropic while simultaneously developing competing technologies. This "coopetition" suggests the AI pie may be large enough for multiple winners.

Key Insights:

• Follow the money: Anthropic's $875M annualized revenue implies a 69x revenue multiple – astronomical by traditional metrics, but potentially justified by 80%+ gross margins typical in software and the company's exponential growth trajectory.

• Cloud wars intensify: Amazon's $8B investment and "primary cloud partner" status represents a strategic coup against Microsoft's ($MSFT) OpenAI alliance. Cloud providers are essentially funding an AI arms race to secure their future relevance.

• Enterprise advantage: Claude's computer-use capabilities could revolutionize white-collar productivity, suggesting Anthropic may capture enterprise value faster than consumer-focused rivals.

Market Pulse:

"We're seeing a rapid shift from 'AI as experiment' to 'AI as infrastructure,'" notes veteran tech investor Lightspeed Ventures, leading the round.

Bull’s Take:

While the valuation may raise eyebrows, Anthropic's enterprise focus and strategic partnerships create multiple paths to value creation. For investors, exposure through Amazon or Google offers a "picks and shovels" play on AI's gold rush – without betting on a single winner.

Headlines

• Nvidia unveils $3,000 desktop AI computer for home researchers (link)

• Microsoft announces $3 bn AI investment in India (link)

• Getty Images and Shutterstock are merging into one stock photo powerhouse (link)

• Trump announces $20 billion foreign investment to build new U.S. data centers (link)

• Cintas proposes $5.1 billion takeover of uniform supplier UniFirst, WSJ reports (link)

• Amazon (AMZN) Will Invest $11 Billion to Boost AI Infrastructure (link)

CRYPTO
Fear & Greed

Headlines

• Bitcoin Dips Below $98K as Strong U.S. Economic Data Leads to $300M of Crypto Liquidations (link)

• AI Tokens Fail to Mirror 2024's Epic Surge Despite Bullish Nvidia Conference (link)

• Coinbase Granted Significant Advance in Court Clash With Gensler's SEC (link)

DAILY SHARE
On the Socials