By Lewis Krauskopf
NEW YORK, Nov 13 (Reuters) - The AI trade that has fueled the rising stock market in recent years but has lately shown signs of vulnerability faces twin tests next week: the highly anticipated IPO of Anthropic and quarterly results from beleaguered semiconductor giant Nvidia.
Shares of Nvidia, whose chips have been at the center of the AI boom, tumbled this week after controversies emerged involving longtime CEO Jensen Huang. Huang stepped down on Thursday following revelations about
two extramarital affairs, including one involving a suspected Chinese spy.
The issue left investors with major questions heading into Tuesday's high-stakes quarterly report.
Just two days later, trading in Claude chatbot creator Anthropic is expected to begin, setting up a real-time barometer for sentiment on the AI trade.
"The market has rose-colored glasses on almost all the risks," including inflation and the war in Iran, in addition to uncertainty over AI, said Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute.
Disappointments next week, Samana said, "could finally kind of wake investors up from this ability to look at every glass as half full."
The AI trade wobbled in recent weeks following doubts over the sustainability of massive investment spending propelling the AI boom. Concerns flared after Democrats swept to victory in the midterm elections earlier this month over President Donald Trump's Republicans, a result that threatened more stringent regulations on the expansion of AI data centers.
Despite Nvidia's woes, many AI-linked stocks steadied in recent days, and the benchmark S&P 500 <.SPX> was on track for a solid weekly gain. The index was last up nearly 11% so far in 2026.
NVIDIA REPORTS UNDER NEW MANAGEMENT
Nvidia, which long reigned as the signature stock of the four-year-old US bull market, has seen its market capitalization drop from about $5.8 trillion in early October to roughly $4 trillion as of Thursday, according to LSEG data.
Nvidia's still-significant market heft, combined with its position at the center of the AI ecosystem, means its results stand to ripple broadly. The extent to which Huang is tied to Nvidia's fortunes will be in the spotlight on Tuesday.
Pressure will be on interim CEO Colette Kress, previously Nvidia's chief financial officer, and the company to shore up investor confidence.
Analysts expect earnings growth of 90% on revenue of $109 billion in the company's fiscal third quarter, according to LSEG data.
Given the uncertainty swirling around Nvidia, "if they have less-than-stellar earnings, whatever penalty the market would apply is going to be leveraged down," said Alex Morris, CEO of F/m Investments.
ANTHROPIC SET TO DEBUT
Anthropic's initial public offering is set to value the company at up to $1.4 trillion, as the AI lab and some of its investors aim to raise up to $64.4 billion by selling 825 million shares.
Anthropic's Nasdaq listing comes on the heels of the high-profile June IPO for Elon Musk's SpaceX, which raised $75 billion at a nearly $1.75 trillion valuation.
SpaceX shares have had a bumpy few months. The stock last traded at about $140 compared with its IPO price of $135, after falling to about $105 in August.
"If you have Anthropic come out and then the IPO does poorly, I think that is probably another cautionary sign that investors are getting a little bit more stressed with the AI trade," said Patrick Ryan, chief investment strategist at Madison Investments.
CONSUMER IN FOCUS WITH RETAIL SALES, EARNINGS
The monthly US retail sales report on Tuesday stands out among the consequential economic data for markets next week. The report will give a view into the health of the US consumer as well as an indication of whether inflation is continuing to build and could lead to more aggressive rate hikes from the Federal Reserve.
Data this week showed consumer prices rose faster than expected in October, prompting markets to factor in more rate hikes in coming months. Minutes from the latest Fed meeting, to be released on Wednesday, also could shed light on the central bank's plans for further monetary tightening that could pressure equities.
A host of major retailers also report results next week, including Walmart , Target, Home Depot and Lowe's.
Investors are particularly eager for clues about whether consumer spending is holding up as Americans face higher gasoline prices stemming from the Middle East conflict and higher borrowing costs than earlier in the year.
"What I would want to see from consumer-oriented companies is ... have things taken another leg down given what is going on with energy prices remaining elevated and interest rates back at the highs," Samana said.
(Reporting by Lewis Krauskopf, editing by Colin Barr and David Gregorio)
