Good morning and happy Friday.
The Treasury tried to talk long rates down this week, and the bond market listened for exactly one day. After Washington said it would more than double buybacks of 10-, 20- and 30-year debt, yields snapped right back, with the 30-year returning to 5.24% and the 10-year up four basis points to 4.69%, CNBC reported. Equities took it badly: the Dow shed 703.84 points, or 1.32%, to 52,759.21, while the S&P 500 slipped 0.87% to 7,641.16 and the Nasdaq Composite lost 1% to 26,067.17, per TheStreet. One asset read the memo very differently: bitcoin (BTC) ripped roughly 11% to about $71,800, according to CoinDesk.
Turns out you can lead a bond market to a buyback, but you can't make it drink.
Artificial Intelligence
Anthropic Lines Up for the Biggest IPO Ever While Broadcom Borrows Its Chip Bill
Most companies pick a funding market. Anthropic appears to be collecting the whole set.
The Claude developer expects to match or beat the size of SpaceX's record-setting listing as it prepares to file publicly as soon as the end of this month, Bloomberg reported. That is a high bar: SpaceX raised $75 billion out of the gate and $86.2 billion once the overallotment was exercised, the Japan Times noted. Morgan Stanley, Goldman Sachs and JPMorgan are on the ticket, and the size is not final.
The same day, a second pipe opened. Broadcom (AVGO) is in talks with lenders to raise more than $60 billion of debt for an AI chip financing deal that would benefit Anthropic and others, with roughly $30 billion of that a junior tranche and Blackstone and Apollo among the firms in the room, per Bloomberg.
Two Windows, One Queue
Compute has stopped being a procurement line and started being a project finance problem. Structures like Broadcom's let an AI lab lock in years of chip supply without parking the full cost on its own balance sheet, which is how pipelines and power plants have always been built. It also lands two days after OpenAI's CFO told staff the company will list in 2027, a reminder that the frontier labs are now racing on capital structure as much as on benchmarks.
The debt under discussion could bring Broadcom's total raise to as much as $100 billion, with the chipmaker guaranteeing part of a senior-secured tranche, Seeking Alpha reported.
Anthropic's target implies a first-time share sale larger than any in history, eclipsing a record set only months ago.
"AI is an existential risk and they need to participate in order to protect their businesses."
Capital Structure: Equity buys optionality; debt buys silicon. Doing both at once tells you the buildout has outgrown what venture money alone can carry, and that the lenders now underwriting it are taking a view on AI revenue that nobody has actually seen yet. Watch the junior tranche. That is where the market's real opinion is priced.
Consumer
Advance Auto Parts Beat on Earnings Because Washington Sent a Refund
The quarter looked fine under the hood. The engine was borrowed.
Shares of Advance Auto Parts (AAP) fell about 21% Thursday, the sharpest single-day slide in the aftermarket group, after the company paired a headline earnings beat with a revenue miss, Yahoo Finance reported. Management pointed to DIY customers working with "tighter household budgets," and the read-across was immediate: AutoZone (AZO) slid roughly 4% and O'Reilly (ORLY) also finished lower.
Here is the part that mattered more than the miss. The beat was substantially a tariff story, not an operating one.
Running on Rebates
Advance Auto Parts is the third company in a week to lean on a customs refund. Deere (DE) booked $110 million of tariff recoveries in its third quarter and $382 million across the first nine months, the company said, and Target logged $994 million of refunds last quarter. Christopher Ciolino, senior US machinery analyst at Bloomberg Intelligence, estimated on Thursday's episode that the refund supplied about 29 cents of Deere's 39-cent beat.
By the numbers: adjusted EPS of $1.03 against $0.81 expected, of which $0.31 came from $26 million of tariff refunds; revenue of $2 billion versus $2.04 billion estimated, down 0.5% year over year; full-year sales reaffirmed at $8.485 billion to $8.575 billion, a midpoint below consensus; and planned store openings trimmed to 30 to 35 from 40 to 45, per StockStory and the company's 8-K.
A refund is a rebate on a cost you already paid, not a customer who came back. Strip the customs cheques out of this earnings season and the consumer tape looks considerably thinner than the beat rate suggests.
Core Charge: In auto parts, a core charge is the deposit you get back when you return the old part. That is roughly what these refunds are: money returning, not money earned. It flatters the comparison this quarter and vanishes next one, which is why the market looked past a 27% EPS beat and priced the 0.5% sales decline instead.
Artificial Intelligence
Nvidia Paid $6 Billion for Poolside's Model Factory and Left the Founders in the Building
Why buy the company when you can license the assembly line and hire the shift?
Nvidia (NVDA) struck a non-exclusive $6 billion licensing deal for Poolside's "Model Factory," its platform for producing AI models tuned to software development, alongside a separate $1 billion investment at a $12 billion pre-money valuation, Newcomer reported. Some 109 Poolside staffers received offers to join Nvidia. The three founders are staying, and because the licence is non-exclusive, Poolside can keep selling the same technology to someone else.
It is a striking shape for a deal this size, and a familiar one. Licence the technology, hire the researchers, skip the merger filing.
Round and Round It Goes
Widen the lens and the money in AI increasingly moves in circles among a small group of the same names. Meta has quietly become one of Microsoft's larger AI customers, spending hundreds of millions of dollars a year to reach models through Azure even as it builds data centers at hyperscale, Bloomberg's Brody Ford reported on Thursday's Bloomberg Tech. A chipmaker paying a model startup, a social network renting a rival's cloud, a lab borrowing against future chips: the revenue is real, but a lot of it is the industry paying itself.
Poolside's valuation, for context, was $3 billion last year, The Decoder noted. Fourfold in twelve months, with the founders still at the desk.
"You can't just say, 'I'm using entire $200 billion worth of infrastructure for my internal consumption.'"
Non-Exclusive Rights: The structure is the story. Nvidia gets model-building capability without owning a model company, and keeps its options open across every lab it also sells chips to. Expect more of these. When a licence plus a hiring spree delivers most of an acquisition's value with none of its paperwork, the acquisition starts to look like the expensive way to do it.
The Tape
Cable Guys Consolidated: Charter closed its $34.5 billion purchase of Cox on Thursday, creating the largest US cable operator with roughly 37 million customers across 45 states, taking the Cox Communications name while keeping Spectrum branding, Variety reported.
House Odds: Prediction markets are Robinhood's fastest-growing business line, with 6 billion contracts traded in July, up 20 times year over year, CEO Vlad Tenev said on Bloomberg Tech, on the same episode where CFTC chair Michael Selig said contracts touching war, terrorism, assassination or gaming will fall under a special rule.
Chip Off the Old Robotaxi: Waymo has built its own application-specific chip to sharpen its robotaxis' reflexes and navigation, loosening its reliance on third-party silicon, Bloomberg's Edward Ludlow reported, making it the latest customer to start designing around its suppliers.
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Conviction is expensive. Alibaba's (BABA) profit fell more than 75% after quarterly capital spending reached almost $10 billion on AI, with revenue up about 9% and free cash flow turning negative to the tune of $6.6 billion, Bloomberg executive editor Peter Elstrom said on Thursday's Bloomberg Tech. CEO Eddie Wu called AI the company's north star on the call.
Defense tech gets a Wall Street co-sign. Castelion raised $1 billion at a $13 billion valuation, combining $800 million of equity with $250 million committed to a revolving credit facility, to scale production of its Blackbeard hypersonic missile system. Andreessen Horowitz co-led alongside JPMorgan and Carlyle, and the company holds about $500 million of existing US government contracts, CFO Andrew Kitz said on the same episode.
The fastest team sale in memory. Mark Walter sold control of the Lakers at a $12.5 billion valuation less than a year after acquiring the team at roughly $10 billion, and he and Todd Boehly are now in talks to sell their Chelsea stakes to majority owner Clearlake Capital, Front Office Sports reported. The sales come amid a reported federal review of how affiliated investments were handled at his insurance businesses, per Forbes.
Just For Fun
Boise is having a moment, and a mortgage problem: Micron's $50 billion hometown buildout and a more-than-tenfold stock run since the end of 2024 have minted a new class of local millionaires, while homes selling above list price climbed 4.5% from last year in a state that grew 10.4% between 2020 and 2025.
The robots still can't find the laundry: Unitree founder Wang Xingxing told the World Robot Conference in Beijing that humanoids reach their "ChatGPT moment" when one can be dropped somewhere unfamiliar and finish about 80% of the tasks, which he put at two to three years in the optimistic case and as long as a decade otherwise.
After the Bell
Somewhere in a Manhattan conference room, a syndicate desk is trying to price debt against revenue that will be earned by a machine that hasn't finished training yet. Somewhere in Boise, a memory engineer is refreshing a brokerage app. And somewhere in a Beijing exhibition hall, a very expensive humanoid is losing at ping pong. The AI trade contains multitudes, and this week it contained a bond market that refused to be talked into anything.
Four days down, one to go.
That's the tape. We'll see you at the open. — AllThingsWallSt
