Growing concern about an AI bubble — fueled by companies investing in and buying from each other — serves as the pressing backdrop to Nvidia's critical earnings report tomorrow afternoon.

• The company's shares — and the broader stock market — have slipped in recent days amid debate over whether investors have gotten too bullish on the AI trade.

What investors want to know is whether the whopping demand for Nvidia chips from the likes of Meta, Oracle, OpenAI, Tesla and other tech giants can continue unabated.

• Some observers are concerned about a circular loop — AI giants are investing in each other and buying each other's products, potentially setting up the ecosystem for a dramatic collapse if something goes wrong.

What they're saying: "We expect the near-term investor debate to remain centered on the sustainability of infrastructure investment, despite another round of hyperscaler capex increases/commentary on continued investment," Stifel analyst Ruben Roy wrote in a research note.

• "Concerns regarding vendor financing loops, financial sustainability of several key AI players, and recent supply side issues have increased," Roy added.

The impact: Nvidia represents about 10% of the Nasdaq 100 ETF, so a sharp shift in the stock price will have an outsized affect on the broader market.

• "Historically, NVDA's one-day reaction to earnings has been a gain or loss of 7.9%, so tomorrow's report could be the catalyst that either breaks these support levels or turns the current period of weakness into a successful test of support," per Bespoke Investment Group.

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Anthropic, Microsoft and Nvidia deepened their ties today — the latest example of how AI's biggest developers and cloud providers are intertwining their models, chips and compute resources.

• 🤝 Anthropic, the AI developer with its flagship product Claude, announced new partnerships with Microsoft and Nvidia that include a combined $15 billion investment, Axios' Ina Fried writes.

The big picture: As part of the deal, Anthropic's Claude will run on Microsoft Azure, making Claude the only frontier model available across all three major cloud providers: Amazon, Google and Microsoft.

• Anthropic has agreed to purchase up to 1 gigawatt of Azure compute capacity and a similar amount of compute power using Nvidia's latest chips.

What they're saying: "We're increasingly going to be customers of each other. We will use Anthropic models. They will use our infrastructure," Microsoft CEO Satya Nadella said on a video describing the partnership.

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Declining home prices in certain markets, broader economic concerns and limited storms are dampening spending on home improvement projects.

• Home Depot lowered its full-year comparable sales outlook after reporting a Q3 increase of 0.2%, trailing the expected jump of 1.3%.

🛠️ The big picture: A slowdown in the housing market is increasingly evident.

• 🏠 "Housing activity" — that is, sales of existing homes and construction of new ones — "is truly at 40-year lows as a percentage of housing stock," Home Depot CEO Ted Decker said on an earnings call.
• 📉 53% of U.S. homes have declined in value since 2024, the highest share since 2012, Zillow reported yesterday.
• 🌀 A "lack of storms in the third quarter" led to reduced demand for construction, Decker said. No hurricanes have hit the U.S. this fall.
• 😬 Consumers are dealing with "economic uncertainty," including "increased job concerns" and elevated cost of living, Decker said.

The impact: Home Depot shares fell 6% today.

🎰 FanDuel and DraftKings left the American Gaming Association in a dispute over prediction markets. The sportsbooks are embracing them, while the AGA — whose membership base is dominated by casino giants like MGM and Caesars — is opposing them. (CNBC)

⚖️ A federal judge today ruled that Meta did not break antitrust laws through its purchases of Instagram and WhatsApp. (Axios)

🤑 Fintech company Klarna's revenue rose 26% in its most recent quarter as buy-now-pay-later loans surge in popularity. (Bloomberg)

Intuit and OpenAI announced a deal today to allow customers to use Intuit's finance apps directly in ChatGPT, Axios' Ina Fried reports.

Driving the news: Under the multifaceted deal, Intuit will expand the use of OpenAI's frontier models in its products.

• Intuit is "actively exploring" how to bring its apps — including TurboTax and QuickBooks — into ChatGPT.

💭 Nathan's thought bubble: Now something we can all agree on about AI: Please let it do our taxes for us.