Smart Investor: What’s Next for Nvidia, Undervalued Earnings Crushers, and is Anthropic a Buy?

In This Week’s Newsletter

• Weekly Markets Wrap
• 7 Undervalued Stocks That Crushed Earnings
• 10 Stocks With the Largest Fair Value Estimate Increases During Q3 Earnings
• Nvidia Has Been the Market’s Golden Goose. Now It’s in Crisis
• Nvidia: Cutting Our Fair Value Estimate by 19% Given the Firm’s CEO Transition and Turmoil
• What to Watch in Nvidia Earnings: Leadership, China, Data Center Concerns Take Center Stage
• Anthropic’s IPO Won’t Dramatically Alter the Stock Market, but It Will Increase Concentration
• Anthropic: We See the Stock as Undervalued in the IPO Pricing Range
• Hot October CPI Seen Tilting Fed to More Rate Hikes in 2027
• What’s Happening in the Markets This Week

It was about as hectic a week as you can get in the financial markets, with massive corporate news and key inflation data coming just days ahead of what could be the largest IPO in history.

The remarkable fall from grace (and power) of Nvidia CEO Jensen Huang dominated headlines. With Huang’s resignation and investigations into his relationship with an alleged Chinese agent, the firm’s stock fell more than 12% during the week. Still, the stock market took it in stride. The Morningstar US Total Market Index gained more than 2.5% for the week, led by energy stocks.

Nvidia is no ordinary semiconductor company. It has played a central role in the AI boom, and its stock is among the most widely held in Americans’ portfolios. In the wake of the Huang scandal and the stock’s collapse, Morningstar’s Colin Laidley looked at Nvidia’s remarkable run and what it has meant for the market.

Nvidia has a lot to contend with. As Huang steps down and investigations build, questions still loom about a potential post-midterms data center slowdown. Amid these headwinds, Morningstar senior equity analyst Brian Colello late this week sharply reduced his fair value estimate for Nvidia stock. Check out his deep dive into the questions around the company and what they could mean.

All this comes as Nvidia is set to report earnings Tuesday afternoon. You can find Colello’s thoughts here on what to watch when the company reports. That’s going to be quite the conference call.

Meanwhile, Anthropic executives have hit the road to sell investors on their groundbreaking IPO, slated to price Wednesday. Morningstar senior equity analyst Malik Ahmed Khan has been combing through Anthropic’s S-1 filing and offering takes on key aspects of the company’s business model and prospects. Regarding the IPO itself, Khan thinks the company is pricing the stock cheaply. We’ve compiled all our Anthropic coverage here. As for how the IPO will impact markets, Morningstar Index’s Dan Lefkovitz unpacks why a top-heavy, tech-heavy market will become even more so.

As if all this wasn’t enough, key economic data this past week came in the form of a hotter-than-expected Consumer Price Index report. Analysts say the inflation data, coupled with a recent strong reading on the jobs market, means the Federal Reserve could be tilting toward more interest rate increases than previously expected.

Lastly, with earnings season winding down, we’re out with our quarterly screen of undervalued stocks that crushed earnings. The list this time around has seven names, including Arista and GE Vernova. We’ve also got stocks with the largest fair value estimate increases during earnings season, including red-hot Moderna, and those with the largest valuation cuts. (Sorry, ServiceNow and Nike.)

As always, visit our Markets page for our latest coverage, along with our full weekly calendar of key upcoming data and events.