On Thursday morning, I named one stock on air.
That night, it jumped 22% in after-hours trading.
The company was Akamai, and it had just signed an $11.6 billion deal with Anthropic. I didn’t need inside information to see it coming. I needed one simple rule for trading the run-up to what I believe will be the biggest IPO in history.
Below, I’ll show you that rule, so you can spot the next one before the headline hits. I’ll also show you the one line in the fine print that has people fuming.
Why I Named Akamai
My rule is simple: follow the suppliers.
If AI is the brain, it still needs its heart, its bone, its muscle and its skin, and the companies providing the computing power and the connections are the ones that make the brain work.
So instead of waiting for Anthropic to list, I look for the companies Anthropic is paying to run.
Akamai is one of them, and on Thursday it signed a 7-year, $11.6 billion commitment with Anthropic. The deal can grow by up to another $9 billion, which would bring the total to about $20 billion, and Akamai is raising its spending this year by about $1.7 billion to build it out.
Akamai closed Thursday at $110.41 and traded as high as $134.64 after hours.
The Fine Print
The part that infuriates people is in the fine print.
As part of the deal, Akamai gave Anthropic a warrant to buy up to about 5% of Akamai’s stock at $111.33 a share, with about 2% vesting on this commitment alone, according to Akamai’s SEC filing.
So Anthropic signs a giant contract with Akamai, and Akamai hands Anthropic a piece of the company.
Would you call that a circular deal? I would.
It’s the same pattern I walked through in Wednesday’s briefing. Big checks and big commitments flow back and forth between the same handful of companies, and the money starts to look like it’s going in a circle.
Why I Trade These And Don’t Marry Them
I’m a big believer in AI over the long term.
But just like the dot-com bubble, I think we’re going to get a reckoning that culls the herd before the real winners emerge.
What killed people during the dot-com bubble was buying and holding and never selling. When you trade, you’re not married to any of these.
So I think the opportunity to build wealth trading the cycle around this IPO, before it, during it and after it, is the biggest I’ve ever seen.
If you want to see my call, click here to watch it.
Your only option,
Mark Sebastian