Weekly Market Outlook 05/25/2026
All time highs
Hello traders,
Hope you had a great long weekend and got some time to rest and recharge.
S&P reached yet another record high in Sunday globex session on the “news” that US-Iran are close to peace deal and it would be signed by end of this week.
Nasdaq futures also was flirting with the psychological 30,000 mark and at this point there is a career risk looming for fund managers who will have to chase this rally.
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Anthropic is profitable, sort of?
“Anthropic’s revenue is set to more than double to $10.9 billion in Q2 2026, an “explosive rate of growth” that will make the company profitable for the first time ever, per WSJ.
The company is set to turn an operating profit of $559 million in Q2 2026.
Why would Anthropic be profitable for only Q2 of this year?
Because SpaceX is subsidizing Anthropic’s GPU costs for this quarter.
Post Q2, SpaceX will start charging Anthropic the prevailing rate and they will likely dip back into being unprofitable. This is great timing for Anthropic because they can raise fresh capital when they are “profitable”.
They pushed down their costs with a sweetheart deal during a tiny window. Anthropic also made sure to leak this right when Nvidia reported earnings, just to keep the whole AI super(hype)cycle going. If you take away that discount, their actual business model goes right back to previous numbers. Their costs go up exactly as fast as their revenue does(linearly). I also find it hard to believe they magically fixed their inference margins in just six months. Remember in January when they missed their gross margin targets because compute costs were 23 percent higher than they expected?
I won’t call it fraud but the timing is beneficial for Dario & co.
All in all, we do live in interesting times.
The AI trade has been doing great for the last year but the SAAS trade is the casualty of the AI trade. The contrarian trade here is to buy beaten down SAAS names and look for reversals in them. Stocks like NOW 0.00%↑(servicenow) and CRM 0.00%↑(Salesforce) come to mind as the obvious beneficiares if vibecoding does not replace every large software contract.
What are the bonds saying though?
