Among the few Wall Street strategists who foresaw the sharp decline in U.S. stocks on Thursday, one warned that the listing of Anthropic could become an event with a more decisive impact than the mid-term elections.
HSBC's Max Kettner downgraded its rating on U.S. stocks from overweight to neutral two weeks ago. At that time, he believed that regardless of the capital expenditure strategies adopted by companies, the market narrative surrounding tech stocks had turned unfavorable.
Despite facing heavy selling this week, Kettner believes that the fundamentals of trading on artificial intelligence (AI) themes remain sound. However, he remains cautious after the elections are over. In Kettner's view, given that investors hardly hedged against the elections beforehand, it is still unknown how much risk this election will ultimately clear.
"The real risk-clearing event might be Anthropic IPO in two weeks, assuming it can actually go public. The most ideal scenario would be if it goes public, but with a valuation of only $1 trillion instead of $1.5 trillion," he said.
Anthropic The IPO in the plan faces various obstacles. Recently, the selling of AI related stocks has made the market environment even more stringent; at the same time, a change in power in Washington may also alter the market's expectations regarding Anthropic's ability to cope with the political environment.
Kettner said, "If the stock is listed at a reasonably low valuation, it could actually start to rise in the secondary market. Or at least it won't plummet by 20%-30% in the first week, because that would obviously be very bad."
In recent years, Kettner has gained fame for his early prediction of the current bull market in the stock market. However, last month, for the first time in several months, he reduced his stock bets, as he believed that the sharp change in investor sentiment indicated the need to adopt a more cautious strategy before the mid-term elections.
When talking about the initial upward trend that emerged after the voting ended, he said, "Wednesday was really strange. People asked me, 'Why are you still so cautious? Why are you still just observing from the sidelines? What are you doing?'"
In the view of Kettner, the various explanations for the stock market's initial rise followed by a sharp plunge on Thursday seem more like attempts to find reasons for the price changes after the market trend had already surprised investors. On that day, the S&P 500 index recorded its worst single-day performance since April 2025, while the Nasdaq 100 index and the semiconductor index saw their largest declines since March 2020.
Kettner compares the current market environment to that of January and February 2018, when volatility products experienced a collapse. He warns that the current selling pressure is more akin to the liquidation of positions triggered by the unwind of momentum trades, rather than investors truly re-evaluating the fundamentals.
Specifically regarding the AI theme trade, Kettner indicates that the stock prices of ultra-large-scale cloud service providers may find support, as computing power becomes more scarce and more expensive, which could be beneficial for companies that already possess computing power to rent out. He also mentioned that semiconductor stocks might see a surge "simply due to short squeeze, for example, rising by 20% or 30% within two days," but he admitted that he doesn't know when that moment will arrive.
