Elsewhere, Enrico Chinello, Next Generation Research Analyst, Julius Baer, suggests Open AI could remain in the red longer than Anthropic which is likely to turn in an operating profit this year.
Chinello says OpenAI is reportedly considering token price cuts to counter Anthropic, signalling a potential price war in generative AI as competition for enterprise customers intensifies.
“Ahead of their upcoming IPOs, we believe a price war could revive the ongoing profitability debate, with diverging business models under scrutiny. Cutting token prices is effectively a volume strategy, aimed at boosting usage and defending market share, but it could accelerate margin compression in a segment already characterised by extremely high fixed and variable costs,” he notes.
Chinello believes that Anthropic’s enterprise-heavy model is beginning to show “operating leverage”, with a projected US$559 million operating profit on US$10.9 billion revenue for 2Q2026.
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“By contrast, for OpenAI, despite targeting more than US$20 billion annual revenue, profitability remains distant,” he says. OpenAI projects operating losses of US$74 billion in 2028, while Anthropic anticipates US$17 billion in positive cash flows and gross margin approaching 77% by the same time, Chinello reckons.
As for SpaceX, Nobel prize-winning economist Paul Krugman points out that Elon Musk’s (the controlling shareholder of SpaceX) wealth has “historically rested mainly on self-fulfilling faith — investors believing in Musk’s genius have piled into stocks in Musk-controlled companies, and the rising value of these companies has enhanced his reputation for genius”.
Krugman is scathing about xAI’s Grok. Morningstar has already attributed Grok to SpaceX’s cash burn. “Grok is, by all accounts, much inferior to the AI models offered by Anthropic and OpenAI. It’s also widely considered unsafe and unreliable. At one point it began spewing racist and antisemitic comments, dubbing itself MechaHitler,” Krugman says. AI can sometimes hallucinate, Grok obviously does and therein lies one of AI’s risks.
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On the World Cup front, Maybank Securities says the tournament “could create a broad consumption uplift across multiple sectors, including travel, hospitality, F&B, media, e-commerce and banks. We see 10 Stock Champions: Acrophyte Hospitality Trus, City Developments, DBS, Raffles Medical, Sea, SIA, SingTel, Starhub, ThaiBev and UOB”.
Certain stocks and ETFs may experience a temporary lift during World Cup periods, especially sponsors and travel-related funds. Globally, Nike, Coca-Cola, Hyundai, and Anheuser Busch InBev have shown strong gains. Alternatively, ETFs like U.S. Global Jets (JETS) and iShares MSCI Mexico (EWW) would benefit from the travel pick up. iShares MSCI Mexico ETF (EWW) has exposure to Mexican airports.
The STI closed 24 points lower week-on-week, at 5,025. Although the chart pattern of the STI in relation to its moving averages looks mildly tentative, and short term indicators are falling, the index should stay resilient overall. The 50-and 100-day moving averages have coalesced at 4,986 and 4,950 while quarterly momentum continues to rise. The convergence of the moving averages and the index points to an important move ahead which should be upwards. On the whole, 5,000 is being established as a support with the upside of 5,740 remaining valid.
