Cerebras, Cisco and Applied Materials: 8 Key Items Shaping the Stock Market Friday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a positive start to end the trading week.

1. The UN nuclear watchdog is “increasingly concerned” about a uranium-enrichment plant at Isfahan that Iran declared to it last year but has still not let the watchdog inspect, it said in a confidential report on Iran on Friday seen by Reuters. Iran has not let International Atomic Energy Agency inspectors return to any of its nuclear facilities bombed by Israel and the United States in a 12-day campaign in June last year that destroyed or badly damaged Iran’s other uranium enrichment plants, the heart ⁠of its nuclear programme. (Reuters)

While we have another day of Nvidia (NVDA) related headlines and more questions over the soft line taken by Commerce Secretary Howard Lutnick with Nvidia chips and China, we’re sharing the above given its potential to influence what could happen next between the U.S. and Iran.

2. The disappointing October CPI immediately spurred Wall Street to pencil in another Fed interest-rate increase at the bank’s next meeting in December. Investors now see a 100% chance of a Fed rate hike, with some even betting on an aggressive half-point move. Yet it wasn’t the big rise in consumer prices by itself that was cause for worry. Rather, it was evidence the tentacles of inflation had spread beyond energy and deeper into the economy. The cost of virtually all goods and services rose last month. (MarketWatch)

At 8:30 a.m. ET, the October PPI report will be released, and the market expectation is for a much cooler month-over-month print for headline PPI as well as the core figure. However, when one looks at the year-over-year expectations, headline PPI is expected to step up to 6.6% from 6.3% in September, while the consensus view is the core figure remains unchanged at 5.0% in October.

While the Price components in ISM’s October PMI dipped month over month, the last few weeks we’ve heard quite a bit about companies inching up prices or sharing plans to do so as they look to offset higher input cost pressures. Should Friday’s October PPI figures come in hotter than expected, it will add to the thinking that Federal Reserve Chair Kevin Warsh and the Fed will need to do more to tamp down inflation pressures.

Given the timing of the Fed’s next policy decision on December 9, only a few pieces of inflation data remain ahead of us. The most important will be the October PCE Price Index data that will be published on November 25. In our view, it will be those data points and where oil prices are at the time that will likely determine if the Fed delivers a larger rate hike in early December or chooses to deliver the expected 25 basis point rate hike and jawbone markets to prepare for a potential one in January.

3. Cerebras raised its outlook for the full year on continued demand for its cloud services, even as direct sales of its artificial-intelligence chips fell in the third quarter. The semiconductor company said it now expects core revenue of between $940 million and $960 million for the year, compared with previous guidance for $880 million to $890 million… Cerebras, which sells both chips and cloud computing capacity, also expects revenue to triple in 2027, as demand for AI compute remains strong despite intensifying investor worries around the AI buildout. (WSJ)

Cisco Systems Inc. gave a sales forecast for the current quarter that exceeded Wall Street estimates and raised its annual outlook, a sign the AI boom continues to fuel demand for its networking equipment… The company said it expects $9 billion in AI-related revenue from hyperscalers in the fiscal year, more than double the previous year. (Bloomberg)

Despite the recent market volatility, when we come back to comments like the ones from Cerebras (CBRS) and Cisco (CSCO) above as well as the recent ones from Nebius (NBIS), CoreWeave (CRWV) and Foxconn (FXCOF), the combined tailwind for AI infrastructure holdings in the Portfolio remain bright. We’ll remain focused on what incoming data has to say and continue to leverage market volatility for the Portfolio when and where we can.

4. Applied Materials recorded a jump in both profit and sales in the fiscal fourth quarter, fueled by artificial intelligence-driven demand for semiconductor services… For the current first quarter of its new fiscal year, Applied Materials expects revenue to be $11.10 billion, plus or minus $500 million. It anticipates adjusted earnings per share of $4.35, plus or minus 20 cents a share. The midpoints of both projections are ahead of Wall Street consensus estimates. (WSJ)

We’ll have more to say in a standalone Applied Materials (AMAT) note later on Friday morning, but during the earnings call management shared it is tracking more than 20 fab ramps and line expansions for 2027 alone. During the reported quarter, it also added for the third consecutive quarter, more than 10 major fabs and expansion projects to its project tracker, with many of those projects targeted for 2029 to 2030. During Applied’s presentation at SemiconWest in mid-October, it shared it is tracking over 100 fab projects globally.

5. Anthropic PBC’s initial public offering has drawn about six times the orders for the shares available, according to people familiar with the matter, as interest increases for potentially the biggest first-time share sale ever. (Reuters)

Anthropic is looking to bolster demand for the IPO with a campaign of events for prospective investors, including a live-streamed event with its Chief Executive Officer Dario Amodei and JPMorgan Chase & Co. CEO Jamie Dimon on Friday, a person familiar with the matter has said. (Bloomberg)

Being roughly six times oversubscribed ahead of Friday’s expected live event leaves little question that demand for Anthropic (ANT) shares is robust. It also goes to show how important a role pricing plays in shaping an offering. We still have a bit of road to go with the offering, but let’s remember that how the shares perform following the IPO will influence the IPO market window.

6. Microsoft’s Outlook, Teams and Copilot were still down on Friday as one of the company’s worst outages stretched beyond 12 hours, disrupting communications for businesses and governments worldwide. Microsoft blamed server problems for the outage and said it was not aware of any malicious activity. It said in its latest update on Friday that it was seeing signs of stabilization after implementing fixes more broadly to attain a persistent recovery of services. (Reuters)

What a pain in the butt to say the least, but it appears that outage is starting to wind down. It may slow our ability to get our thoughts and insights to you, but we’re on the case. The outage and how it hobbled many businesses and other enterprises is a reminder about the need for redundancies.

We will be interested in what Microsoft (MSFT) has to say on this when Chairman and CEO Satya Nadella delivers a webcast on November 17 titled “Latest From Satya.” How Nadella addresses the outage and what else he has to share will determine how quickly MSFT shares bounce back from this outage.

7. Economic data today per TipRanks: Producer Price Index (October), Core Producer Price Index (October), EIA Natural Gas Storage (Weekly), Baker Hughes Rig Count (Weekly).

8. Companies reporting today per TipRanks: AM – Compagnie Financière Richemont (CFRUY), Landsec (LDSCY), Lithium Americas (LAC), Suncrete (RMIX), Twenty One Capital (XXI).