• Stocks: Indexes rose as AI and semiconductor stocks rode enthusiasm for Anthropic’s newly filed IPO prospectus, particularly the tech-heavy Nasdaq.
• Bonds: Treasury yields remained stable as traders looked ahead to the Fed convening about interest rates tomorrow.
• Commodities: Crude oil prices receded slightly as Saudi Arabia’s defense minister met with Iranian President Masoud Pezeshkian and others to ease geopolitical tensions.

Telecom

Morning Brew, Inc., Photos: Adobe Stock

Can you hear it now? Verizon’s got some good news on the line, but investors don’t seem too eager to pick up.

The telecom giant added 406,000 postpaid phone customers last quarter, nearly double analyst expectations and Verizon’s strongest third-quarter showing in five years. Adjusted earnings of $1.31 per share also beat estimates, while the company raised its full-year outlook for subscriber growth, earnings, and free cash flow. Verizon also announced a more than $2 billion deal to connect AWS data centers, giving it another path to capitalize on the AI infrastructure boom.

But there was one blemish: Revenue rose 1.5% but slightly missed estimates, partly because customers are holding on to their phones longer and upgrading less often. Shares fell 3.38% today.

SpaceX shakes things up

Verizon’s revenue miss wasn’t the only thing hanging over the stock. Investors are also digesting reports that SpaceX is preparing a much broader push into wireless, including plans to secure access to at least 80,000 US cell sites.

The prospect of a fourth nationwide carrier sent Verizon, AT&T, and T-Mobile shares tumbling last week. Another deep-pocketed competitor could pressure prices, lure away subscribers, and force the incumbents to spend even more defending their networks.

For tower companies, though, SpaceX could become a major new customer. Rather than build tens of thousands of sites from scratch, it could lease space from operators like Crown Castle, American Tower, and SBA Communications, giving the infrastructure owners a potentially lucrative new stream of rental revenue.

Elon Musk’s disruption tour: Wireless carriers weren’t the only stocks feeling the Musk effect. CoreWeave, Nebius, IREN, and Applied Digital also fell today after he warned that many of the 200-plus neocloud companies could face consolidation or “guppy-level death” as financing tightens. SpaceX, meanwhile, just closed a $40 billion financing deal with Apollo for AI chips and servers.

The long game

Citi analysts estimate that SpaceX’s expansion could eventually generate billions of dollars in leasing revenue, although realizing that opportunity will take time. They expect a terrestrial network rollout to take three to five years, while capturing roughly 20% of the wireless market could take a decade.

On top of that, TD Cowen estimates that a nationwide network could cost more than $80 billion, adding another enormous expense to SpaceX’s already ambitious plans.

For Verizon, that offers some much-needed breathing room. Its latest earnings show that the company is still attracting customers at a healthy pace, and SpaceX faces a long, expensive climb before it can seriously challenge the established carriers.

But judging by the pace of Musk’s ambitions—from a potential Tesla-SpaceX merger to his latest wireless conquest—perhaps it’s only a matter of time before Verizon & Co. become relics of a bygone era, when the skies were still up for grabs.—SY

      

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Stocks

🟢 What’s up

• Tesla climbed 5.21% following a Barclays upgrade to Buy that highlighted the potential upside from a SpaceX merger and growing demand for its Full Self-Driving technology.
• Microsoft gained 1.54% on plans to offer buyouts to roughly 60,000 employees, or 27% of its workforce.
• Range Resources surged 17.68% after agreeing to be acquired by natural gas producer EQT in a roughly $12.8 billion deal.
• Lockheed Martin rallied 5.13% on a Morgan Stanley upgrade to Overweight that cited easing uncertainty around its F-35 fighter jet program and growing missile production opportunities.
• CACI International rose 4.89% following a Jefferies upgrade to Buy that highlighted the defense contractor’s consistent execution.
• Booz Allen Hamilton jumped 6.44% thanks to a TD Cowen upgrade to Buy, supported by a growing contract backlog and a higher annual earnings outlook.
• Surgery Partners soared 47.62% on reports that Bon Secours Mercy Health is in advanced talks to acquire a majority stake in the company as part of a roughly $6 billion deal.

🔴 What’s down

• JetBlue Airways plunged 9.71% following reports that its senior creditors have hired a restructuring adviser.
• Fair Isaac dropped 13.15% after its decision to freeze mortgage credit-scoring fees at $10 drew criticism from Wall Street analysts.
• Petrobras lost 13.99% and Nu Holdings sank 16.95% as Brazilian stocks sold off following President Luiz Inácio Lula da Silva’s unexpected election victory.
• Dollar General fell 3.22% after the FTC and 20 states sued the retailer for allegedly mislabeling prices and routinely overcharging customers.

S-1 of the day

Wake up babe, Anthropic IPO just dropped

Morning Brew, Inc.

It’s happened: Anthropic has officially filed for its blockbuster IPO, and the documents confirm nearly everything we’ve been thinking.

In a 318-page prospectus, the frontier giant lays out the full financial picture of its business—along with the many hazards ahead. It poses one of the largest public market debuts in history, and reports suggest shares could start trading before Thanksgiving.

Anthropic’s put impressive numbers on the record: It pulled in $16.3 billion in the first half of 2026, up from just $1.2 billion in the same period a year prior. But it’s a shaky time for the AI trade, and analysts are responding. Wall Street has already revised its target for Anthropic’s valuation from $2 trillion to $1.5 trillion.

Trade troubles

The document highlights some of the serious risks that the Claude developer—and its investors—will have to navigate as traders buy in.

Growing pains. Anthropic would require an unprecedented pace of growth for a company of this size and scale—just as it’s seen growth decelerate of late. Revenue rose 45% quarter-over-quarter in Q3, compared to a 140% rise the previous quarter.

Customer concentration. Five customers represented about one-fourth of revenue for the first nine months of the year. In fact, about 20% of Anthropic’s first-half revenue came from just two customers—which makes for major risk if one pulls back.

Compute conundrum. Anthropic’s already committed about $630 billion on data-center and chip leases over the next decade. Many future contracts are long-term or noncancelable, and the filing makes clear that Anthropic could be on the hook for up to $170 billion more.

Risky business. The company dedicates 94 pages to a section called Risk Factors, which lays out how its own technology could cause catastrophes well beyond the financial.

How do analysts make sense of it? “There’s not a whole lot of operating history here,” CreditSights Head of Technology Jordan Chalfin told Barron’s. The stakes are unprecedented—and the gains or losses could be, too.—GR

Tech

Morning Brew, Inc., Photo: Adobe Stock

If you replace every plank on the Ship of Theseus, is it still the same ship? Big Tech may be about to find out.

Meta got a $25 billion reminder last week when a New Mexico judge ordered the tech giant to pay claims tied to its Cambridge Analytica privacy scandal. The company plans to appeal, and experts expect the award could shrink. Meta also agreed to a $17 billion settlement with states this summer over alleged harms to teens involving products like Instagram.

Those cases aren’t necessarily about AI. But they do show how decisions tech companies make today can turn into enormous liabilities years later—and that has major implications for today’s AI developers and hyperscalers.

Platform, product, or something else?

For decades, companies like Facebook and Twitter benefited from Section 230, a law that generally protects online platforms from being treated as the publisher of content posted by their users.

Generative AI complicates that distinction. ChatGPT, Claude, and Grok don’t merely host somebody else’s words. Large language models are trained on enormous amounts of human-created material, respond to prompts written by users, and produce outputs shaped by how developers built and trained them. The result isn’t simply somebody else’s post being displayed on a platform. Now regulators are testing who shoulders that responsibility.

Eight states sued OpenAI this month over ChatGPT’s alleged harms to users, including teenagers, and are seeking not just damages but changes to how the LLM is designed. Other plaintiffs are testing whether AI systems can be treated under traditional product-liability theories when their design or outputs allegedly cause harm.

Anthropic is litigating a different boundary. In a new suit by the owners of Elvis Presley’s catalogue, music publishers argue that Claude was trained on copyrighted lyrics and can generate competing content. While Anthropic says using those works for training is transformative fair use, federal judges have already reached different conclusions in previous cases about when AI training qualifies for that protection.

Google, meanwhile, recently beat lawsuits from Chegg and Penske Media over its AI Overviews. While publishers argued Google was using their content to generate answers that siphoned away their rightful traffic, the case judge dismissed the antitrust claims—and acknowledged the broad problem of creative work becoming repurposed without compensation.

The legal tab gets operational

For investors, that question is becoming more than a law-school debate. As companies like Anthropic prepare to sell shares to the public, legal risk is joining compute costs, losses, and valuation on the list of things investors have to price in.

Broader liability around training data, product design, or AI-generated output could mean higher licensing and insurance costs. It could also force companies to redesign products or slow releases, hitting growth as well as margins.

Investors aren’t just betting on how good the models get: They’re also betting on how expensive the rules around them become.

Silicon Valley is replacing the old internet’s planks one by one. Now courts have to decide whether it’s still the same ship.—HC

      

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News

• The NBA named Kalshi and Polymarket its preferred prediction market platforms and made event contracts officially part of the game.
• Knicks employees were offered $3.7 million championship rings in a company phishing test. Somebody clicked.
• Shein will pay $100 million to settle an FTC probe over delivery and customer-service complaints, adding another regulatory bill to its list.
• Grok released seven minutes of its “historically accurate” Odyssey, giving Christopher Nolan some extremely cheap competition.
• Brazil’s surprise election result sent the country’s stocks plunging, with investors suddenly repricing Lula 4.0.
• Warhound raised $200 million at a $1.2 billion valuation to clone military dogs that haven’t even been born yet.

Calendar

AI hardware takes the spotlight with SK Hynix and Seagate reporting. Visa, HSBC, S&P Global, and Robinhood will deliver financial-sector earnings, and Coca-Cola, Boeing, Novartis, and UPS also release quarterly numbers. Plus, we’ll hold our breath as the Fed kicks off its meeting to decide whether it will raise or maintain interest rates.

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