Good morning investors! Markets expect the Fed to hold benchmark rates steady when it releases its decision today.
Today we cover:
Anthropic IPO is coming
Visa and more report
Losing access to GLP drugs?
📊 Economy and News
Anthropic IPO Highlights Major Risks Facing the AI Industry
Anthropic’s anticipated initial public offering (IPO) highlights the significant risks facing the artificial intelligence industry, according to its newly released prospectus.
The company behind Claude AI identifies several challenges that could affect its growth, profitability, and operations. These include potential AI safety failures, political uncertainty, rising infrastructure costs, and increasing regulatory scrutiny.
Anthropic warns that its AI models could cause serious harm, potentially posing catastrophic risks to humanity. It also acknowledges that ensuring AI safety is difficult amid intense competition and pressure to develop increasingly advanced technology.
Another major concern is growing opposition to data centers, which are essential for training and operating AI models. Community resistance and potential government restrictions could delay expansion. Meanwhile, rising electricity demand and limited power infrastructure could increase operating costs.
Child safety and legal risks are also highlighted. Although Anthropic restricts minors from accessing Claude, the company acknowledges that protecting vulnerable users will become more challenging as adoption grows.
Additionally, Anthropic warns that slower corporate spending on AI could weaken demand for its products. Customers may increasingly choose cheaper or open-source alternatives if advanced models fail to deliver sufficient value for their higher costs.
Anthropic’s supporters point to 1,300% sales growth, 900% net revenue retention and an 85% implied gross margin. Critics highlight roughly $80 billion in first-half losses, massive computing commitments and more than 90 pages of risk factors. The potential IPO could become the largest in history, challenging investors to value a pure-play AI company amid rising interest rates and concerns over the industry’s costly expansion.
Anthropic was valued in May at $965 billion, and is reportedly looking for an IPO valuation in the range of $1.5 trillion to $2 trillion, which would instantly make it one of the 10 most valuable U.S. tech companies.
Global hits:
High inflation to persist globally into next year.
Canadian household credit holds firm even as mortgage delinquencies rise.
Euro zone lending growth holds up even as survey points to weakness.
Reminder: Polymarket faces renewed CFTC probe over U.S. access to offshore platform.
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Wall Street is bracing for what could be the biggest wave of AI IPOs ever.
Electricity heads the list of what AI depends on.
One energy stock's name reaches you by text from Good Morning Alerts.
📈 Stocks
S&P 500 7,722.61 (+0.61%)
DJIA 52,377.57 (+0.031%)
NASDAQ 26,477.81 (+1.17%)
BRENT CRUDE 114.14 (+0.31%)
* Prices as of Oct 28th, 12:20 AM UTC
Visa Reports Record Revenue, Focuses on New Growth
Visa reported record fiscal 2026 revenue and profits, beating Wall Street expectations as it expands into new markets and technologies, including AI-powered commerce, stablecoins, fraud prevention, and international expansion. It also received preliminary approval to prepare for a domestic card-clearing network in China.
Revenue rose 13% to $12.1 billion, while adjusted earnings per share increased 17% to $3.48, topping analyst estimates.
Quarterly payment volume rose 9%, cross-border volume increased 14%, and processed transactions grew 10%.
Shares fell 0.6% during regular trading and declined further after hours, despite the strong results, mainly due to the company expecting low-double-digit revenue growth, with adjusted earnings per share growth ranging from the low double digits to the low teens for the full fiscal year.
More earnings:
Boeing fell 9.66% to $170.12, as its third-quarter results highlighted ongoing challenges in profitability and cash generation. The company generated $1.5 billion in operating cash flow and $464 million in free cash flow, meaning roughly 31% of operating cash flow remained after investment spending.
Its commercial aircraft division recorded $10.72 billion in revenue but posted a negative 6.5% operating margin, indicating continued losses despite strong sales. Furthermore, Boeing carries $45.9 billion in debt, increasing pressure to improve profitability and generate sustainable cash. Moroever, Boeing is targeting a production increase of its best-selling 737 Max aircraft in the second half of 2027.
Robinhood fell 5% after it reported record third-quarter 2026 revenue, but weaker crypto trading and missed earnings expectations pressured its shares with crypto revenu falling 55% year over year to $120 million, accounting for just 8.4% of total revenue, down from about 21% a year earlier.
Interestingly, revenue from prediction markets surged to $173 million, more than six times the prior-year level, overtaking crypto trading for the first time. Event contracts traded reached a record 16.4 billion.
Coca-Cola beat third-quarter expectations and raised its full-year earnings forecast for the third consecutive quarter, despite sluggish demand in North America. Revenue rose 7% to $13.4 billion, beating the $12.92 billion estimate. Adjusted EPS reached $0.91, above analysts’ $0.88 forecast. Importantly, Coca-Cola now expects full-year adjusted EPS growth of at least 11%, up from 9%–10% previously. Global unit case volume grew 5%, driven by international demand and growth in Coca-Cola, Coke Zero Sugar, and Diet Coke. North American volume remained flat.
iPhone 18 goes big: Apple’s iPhone 18 Pro series sales rose 3.1% globally in the first three weeks after launch compared with the iPhone 17 Pro, according to Counterpoint Research. China led growth with a 29% increase, while sales fell 4% in the US and 27% in Japan, partly due to higher prices and limited upgrades. The iPhone 18 Pro Max accounted for 56% of Pro-series sales.
Surprising: Amazon’s anti-tokenmaxxing memo says engineers should be pickier about using AI. In other news, Nvidia, AMD to invest $4 billion in Meta as tech giants deepen AI partnership. Elsewhere, Honda executive Jennifer Thomas said a planned Jan. 1 increase to tariffs on Canadian vehicles and parts would be “catastrophic” for the auto industry.
💵 Personal Finance
Employers Cut GLP-1 Weight-Loss Drug Coverage Ahead of 2027
More employers are reducing or dropping coverage for GLP-1 weight-loss medications as healthcare costs rise. A WTW survey found that 53% of employers with more than 100 employees covered these drugs in 2026, down from 57% in 2025. Additionally, 16% of employers currently covering them are considering ending coverage.
These medications can cost employers around $500–$600 per user monthly, prompting companies to explore cheaper alternatives. Options include direct-to-consumer purchases through Novo Nordisk’s NovoCare and Eli Lilly’s LillyDirect, employer-sponsored weight-management programs, and arrangements that reimburse part of employees’ out-of-pocket costs.
Some employers are also offering programs through providers such as Noom, Omada Health and CVS Weight Management. These services typically provide coaching on nutrition, exercise and behavior changes. Employees may also use FSA or HSA funds for GLP-1 prescriptions when they are medically necessary to treat a diagnosed condition, such as obesity.
What Employees Should Do Now
1. Review your 2027 benefits. Check your employer’s open-enrollment materials to confirm whether GLP-1 medications remain covered, what restrictions apply, and when any changes take effect.
2. Compare available alternatives. Ask your benefits team about direct-purchase options, employer reimbursement programs and weight-management services that may reduce your costs.
3. Check your out-of-pocket expenses. Compare medication prices, insurance coverage and eligibility for FSA or HSA reimbursement before choosing an option.
4. Speak with your healthcare provider. If coverage is ending, discuss the financial impact and appropriate treatment alternatives before changing or stopping medication.
5. Plan ahead. Contact your insurer and benefits administrator early to understand your options and avoid unexpected costs or interruptions in care.
As employers balance rising healthcare expenses against employee needs, workers should review their benefits carefully and make informed decisions with their healthcare providers before the 2027 plan year begins.
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