Issue #42 | AI’s Trillion-Dollar Test

ASX - Top 3 Winners & Losers
Deals Down Under - Anthropic IPO
Global Markets - US Midterms
Other News - Aussie Politics, Sport and Culture

The ASX 200 rose 1.28% this week, closing at a 20-day high and still 4.18% below its 52-week high, even as a global sell-off in tech stocks over doubts about AI spending cut into Friday’s gains. Brent crude climbed above US$112 a barrel, its highest since April, on signs the US may resume military strikes on Iran, while miners fell as copper and lithium prices slid.

This week’s best performers

Mesoblast (ASX:MSB) +27.32%
Mesoblast, the biotech behind the cell therapy Ryoncil, rose 27.32% after its September quarter update showed Ryoncil revenue of US$28m, up 44% on a year earlier, while net operating cash spend fell 86% to US$2.1m. For a biotech, earning more while spending less means fewer capital raises, which tend to weigh on the share price. It also finished treating all 350 patients in its final Phase 3 trial for chronic low back pain.

Zip Co (ASX:ZIP) +22.60%
A week after falling 32.72%, Zip Co, the buy now, pay later provider, bounced 22.60% as it extended its Best Buy partnership into every physical store in the US, putting its payment option at the checkout counter. One widely followed investor estimate puts fair value at about $4.03, against a share price of about $1.70 when the news landed, but that depends on the US push turning into steady earnings. Bad debts, the problem behind last week’s fall, are the risk as new products scale.

Iperionx (ASX:IPX) +21.13%
Iperionx, the titanium metal maker, rose 21.13% after a quarterly report that gave investors more to work with than usual. It showed validation of its GenX titanium production process and a US$18.5m US Army task order, an early sign of commercial demand. It also held US$63.0m in cash, which lowers the odds of another raise that waters down existing shareholders. The company is still losing money, so this is a bounce until it proves more.

This week’s worst performers

4DMedical (ASX:4DX) -35.19%
The respiratory imaging company 4DMedical fell 33.51% after a quarterly update showed strong growth alongside heavy spending. Scans rose 61% and revenue rose 66% to $2.3m, but it burned $15.2m in operating cash and its $10m loan facility is fully drawn. Investors are now asking how long its $242.8m of cash lasts before it has to sell more shares, after the stock rose about 800% in 2025.

Tuas (ASX:TUA) -29.95%
Tuas, the Singapore mobile operator, fell 29.95% after its subsidiary Simba received a Show Cause Notice from Singapore’s telecom regulator, the IMDA, alleging it used some radio spectrum without proper approval between 2022 and 2026. No findings have been made, but possible outcomes include fines of up to 10% of annual turnover and licence suspension or cancellation. Simba’s response is due 16 November.

Catalyst Metals (ASX:CYL) -17.47%
Catalyst Metals, the gold miner, fell 17.47% after cutting its FY27 outlook to 90,000 to 105,000oz from 130,000 to 150,000oz, as delays push two growth projects into FY28. Staffing shortages and a long plant shutdown also lifted all-in sustaining costs, the full cost of mining and selling an ounce, to $4,267 from $2,666. Catalyst is debt-free with $371m in cash and gold, but management said the extent of the schedule changes isn’t yet clear.

US artificial intelligence company Anthropic, the maker of Claude, has publicly filed its prospectus to list on the Nasdaq, targeting a mid November debut. Training and running AI models takes enormous computing power, and listing would give Anthropic a deeper pool of capital to pay for it, and Aussies the chance to own a slice of one of the world’s leading AI developers. It reportedly wants to raise $US100 billion at a valuation of up to $US2 trillion, which would make it the biggest IPO ever, overtaking SpaceX’s listing in June.

The filing shows a business growing at extraordinary speed. Revenue hit $US16.3 billion in the first half of 2026, nearly 14 times the same period last year, and the number of businesses spending more than $US100,000 a year jumped from 950 to 11,900 in twelve months. Investors are betting that if this pace continues, today’s valuation will look cheap. But the costs are just as staggering. Anthropic has signed more than $US500 billion in computing commitments and reported a $US80.7 billion net loss for the half, largely due to an accounting charge. That feeds a growing fear of an AI bubble, with investors questioning whether the trillions going into data centres and chips will pay off quickly enough to justify the valuations. More concerning, the prospectus even warns that its models may pose existential risks to humanity if misused.

For Australians, this is one of the first chances for everyday investors to own a leading AI developer directly, with CommSec planning to market the shares to local retail clients. But buyers will have limited say: a special trust elects most of the board, and the founders hold a single share guaranteeing majority voting power, a structure ASX rules generally prohibit. Anthropic has also committed to a data centre at Queensland’s Western Downs Digital Park, a plan that depends on the capital this IPO raises.

The timing is the real test. Weeks after Firmus pulled its ASX IPO and AI borrowing costs surged, Anthropic’s listing will show whether investors are still willing to fund the AI boom.

Americans vote on Tuesday in the midterms, held halfway through a president’s four year term, with all 435 House seats and 35 Senate seats up for grabs. Republicans hold narrow majorities in both chambers, but frustration over living costs and the war with Iran has pushed Donald Trump’s approval rating to a record low. US election data firm Decision Desk HQ gives Democrats a 79% chance of winning the House, while prediction markets put their Senate chances above 60%. Losing Congress would not strip Trump’s powers, but it would limit them: Democrats could launch investigations, block legislation and use spending deadlines as leverage, while Trump would keep his veto and govern through executive orders.

History favours shares. The S&P 500 has risen in the 12 months after every midterm since 1950, as the uncertainty of the vote clears. But with oil, bond yields and the AI selloff already rattling markets, fund managers are hoarding cash and buying insurance against a sharp fall, because each outcome carries a different risk. A Republican hold could spark a short rally on hopes of more stimulus, including Trump’s proposed $US5000 payments to adults, but would do little to fix high debt and inflation. A split Congress would likely rein in government spending, easing deficit fears, but could trigger a showdown next year over raising the US borrowing limit, with a default the worst case. A Democratic sweep would bring tougher scrutiny of big business and calls for tighter guardrails on AI, which could hit the tech stocks that have driven Wall Street’s gains.

The election also won’t settle the market’s biggest risk: Iran. The US and Israel are reportedly planning new strikes after the vote, which would push oil higher. Even a Democratic Congress would have little power to stop them, since Trump can veto any attempt to end the war.

For Australians, the US makes up more than half of the country’s overseas share investments, much of it through super, and the ASX tends to move with Wall Street. ASX companies with large US operations are exposed to any policy shift, while lithium producers could benefit if Democrats revive electric vehicle and battery incentives.

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