CWS Market Review – October 27, 2026

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The Federal Reserve started its October meeting today. Tomorrow afternoon at 2 pm ET, the Fed will release its policy statement. I’ll spare you the suspense: the Fed won’t raise interest rates — at least not at this meeting — but a rate hike may be coming in a few weeks at the December meeting.

What about for next year? That’s hard to say right now, but I think it’s very possible that we’ll see two more rate hikes in 2027. Of course, a lot of that will depend on the economy and inflation.

The two-year Treasury, which is a good proxy for what the market wants, has settled around 4.75%. We’re doing a lot better than French bonds which are suffering through their worst decade since 1803.

The stock market has suddenly gotten boring again. We had an exciting few days at the beginning of the month when the S&P 500 rallied 2.2% in four trading sessions to a new all-time high.

The big news this week was that Anthropic is filing for its IPO. Let’s take a closer look.

Anthropic to IPO in Massive Deal

Yesterday, Anthropic said that it’s going public, and Wall Street went absolutely ga-ga over the news — and Wall Street is a place that loves to go ga-ga over most anything. Folks have been waiting a long time for Anthropic to hit the market, and this deal will be massive. The news was enough to lift the entire tech sector.


Source: NYT

Anthropic is best known for Claude, its family of large language models. The company isn’t quite six years old, and it’s based in San Francisco. Anthropic plans to list on the Nasdaq under ticker symbol “ANT.”

As far as IPOs go, this will be one of the biggest of all time. The company was founded by the brother-sister team of Dario and Daniela Amodei. In 2021, Dario and a small group of researchers bolted from OpenAI to start Anthropic. OpenAI is now their big rival.

The consensus is that Anthropic will have a market value of $1.5 to $2 trillion. (When your margin of error is $500 billion, then you know you’re dealing with some very big numbers.) There are 15 companies with market caps over $1 trillion. Twelve are American. Zero are European.

Anthropic filed in June, but it gave the SEC some time to review all the details. The lead underwriters are Goldman Sachs and Morgan Stanley.

Anthropic is growing rapidly. For the first half of last year, they lost a measly $12.9 billion. For the first half of this year, Anthropic lost $80.7 billion. Now that’s some impressive growth.

Via: WSJ

For all last year, Anthropic lost $41.9 billion. In 2024, it had a loss of $8.3 billion. Anthropic said that as of June 30, it had $112.4 billion in cash and cash equivalents. International revenue made up for 27.8% of the company’s total revenue.

Interestingly, Anthropic’s customer base is far more diversified than those of other AI stocks. For example, Anthropic said that no single customer represents more than 10% of its revenue. Compare that with Nvidia which has five clients with more than 10% of its revenues.

Anthropic said it will use the funds from its IPO for general corporate expenses. The company also said that it may use the money to buy out other firms, which I almost certainly expect. The benefit of an elevated share price is that it can be used as cheap currency to buy out your rivals.

Anthropic is a classic “asset-light” company, meaning it doesn’t own much of anything. Instead, it leases what it needs. Anthropic currently has just over $1 billion in property and equipment. That includes $432 million of net property and equipment associated with finance leases. At the end of 2025, Anthropic’s future undiscounted lease obligations were just $50.2 billion. Now that’s at $321 billion.

Anthropic has an unusual corporate structure. Founder LLC owns 50.1% of the stock. The LLC has just seven members: Dario and Daniela Amodei, plus five other executives.

At the end of Q3, Anthropic said it had 5,300 employees. That works out to $6.6 million in revenue per employee. Anthropic said that internally it refers to its employees as Ants. I’m not sure what to think of that.

Anthropic said it will pay SpaceX around $3.1 billion per month to “access compute powered by NVIDIA GPUs.” SpaceX said in its Q3 report that Anthropic paid them $5 billion which is more than one-third of its total revenue. In its prospectus, Anthropic only named two competitors, OpenAI and Google.

The company listed 90 pages of risk factors. There’s been a backlash against data centers across the county. A few states and cities have passed moratoriums on new data center construction, and many more are considering the idea. Anthropic listed as a business risk having so much of its chipmaking done in Taiwan, especially at Taiwan Semi.

After the IPO, Google will have the option to become a very significant shareholder of Anthropic. In March, Anthropic agreed to give Google an option to buy up to $10 billion worth of shares in a private placement.

Amazon also has had a very close relationship with Anthropic. Since 2023, Amazon has invested $13 billion in Anthropic, and it may invest $20 billion more. Amazon owns convertible notes that could be worth $1.84 billion once Anthropic IPOs.

I’m not going to be an investor in Anthropic’s IPO, but I will be watching it closely. I expect to see them use their cash infusion to buy out a lot of competitors.

Hawkins Inc. Soars on Earnings

If you’ve been following me for a while, you’ll know that I’m a big fan of little-known stocks that are great businesses even though they’re not followed by any analyst on Wall Street (in other words, the exact opposite of Anthropic). A great example is little Hawkins Inc. (HWKN) of Roseville, Minnesota. Hawkins is one of those small- to mid-cap industrial stocks that I love. It has a market value of $3 billion.

The company describes itself as “a leading specialty chemical and ingredients company.” Snoresville, right? No, Hawkins isn’t the most exciting business, but it’s an important one, and it’s something people need. Hawkins “formulates, distributes, blends, and manufactures products for its Industrial, Water Treatment, and Health & Nutrition customers.”

I first told you about Hawkins in June 2024. Since then, it’s up over 72%. Hawkins has been around since 1938. The company has 64 facilities across 28 states. Hawkins has about 1,200 employees and last year, it generated revenue of $1 billion.

Now for the best part. Since 1992, Hawkins is up by more than 150-fold. The S&P 500 (in blue) looks like a flat line in comparison. Hawkins has also raised its dividend consistently for nearly 40 years.

Hawkins used to have a practice of announcing 10% or 15% stock dividends each year. These tended to be in line with the stock’s long-term performance. As a result, the nominal share price didn’t move much. That might you lead you to believe that the stock hasn’t done well, but it’s been a huge winner. Despite all its success, still only two Wall Street analysts bother following Hawkins.

After yesterday’s closing bell, Hawkins released another good earnings report. For its fiscal Q2, which ended on September 27, Hawkins had sales growth of 12%, and earnings were up 23% to $1.34 per share. I can’t say whether that beat earnings since there is no consensus. The average of the two analysts was for $1.18 per share.

The market loved the earnings report. At one point, Hawkins was upv17% today before settling for a gain of 13.6% today. This was a great bargain hiding in plain sight.

That’s all for now. The Fed will release its policy statement tomorrow at 2 pm ET. Don’t expect any rate increase for now. I’ll have more for you in the next issue of CWS Market Review.

– Eddy

Posted by on October 27th, 2026 at 7:06 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.