Earnings — five big-tech beats, none rewarded; Celestica +17% after hours, Kospi +3.1% into the Fed
Monday was a bounce with a verdict attached. The S&P 500 rose 0.7% to 7,676.77, the Nasdaq-100 gained 1.1%, and the chips led the repair — SOXX +2.9%, SMH +2.7% — with the VIX falling 5.4% to 18.4. The proximate driver was Anthropic's IPO filing: reports put the valuation ambition near $2 trillion, and the AI complex traded it as confirmation that the biggest private AI name is coming to public markets. Nvidia rose 2.4% and Microsoft 1.5%; Meta, Alphabet and Apple all closed lower on the same tape.
Hyperscaler free cash flow is collapsing — Alphabet just printed its first negative quarter since its 2004 IPO, Meta's quarterly figure fell to $784 million, Amazon's trailing twelve months are $7.6 billion in the red — and Wall Street projections see the aggregate burn deepening into 2027. The instinct is to read that as deterioration. But in an infrastructure build-out, free cash flow is the rear-view mirror: it records the clearing of invoices for decisions made quarters or years earlier. The leading indicators live elsewhere — in order books for optics, packaging and cooling, in the return each new dollar of capital earns, and in who converts the compute into monetised services. This week's tape made the split explicit: five big-tech beats went unrewarded while the companies collecting the capex — Celestica up 17% after hours — got paid. Microsoft and Alphabet report Wednesday, hours after the Fed.