There is little debate about what's driving the stock market: AI and the trillions that hyperscalers are spending to win a technology arms race. The fear-du-jour is that all the spending won't generate an acceptable return, leaving debt and equity investors holding the bag as optimism unwinds.

AI is surprisingly profitable, however.

Anthropic filed its highly anticipated IPO registration statement with the Securities and Exchange Commission on Monday, creating noticeable buzz on Wall Street. In it, Anthropic disclosed an $80 billion loss for the first six months of the year.

That number is irrelevant. It is essentially a pre-IPO accounting adjustment. The loss is driven by Anthropic getting more valuable.

Anthropic's adjusted net profits for the first half of 2026 were $2.7 billion, a $4.4 billion improvement from the first half of 2025. Sales hit $16.3 billion, up 1,300% year over year.

SpaceX, a competitor and partner of Anthropic, reported a second-quarter profit of $4.4 billion, more than $1 billion more than Wall Street projected even after adjusting for one-time gains. At the time of SpaceX's IPO, analysts projected a third-quarter loss of almost $400 million.

Profitablity has gotten better faster than anyone expected.

Even the embattled neocloud AI computing provider CoreWeave is producing positive earnings before interest, taxes, depreciation, and amortization (Ebitda). At current prices, its 1.5 gigawatts of AI compute could generate $10 billion-plus in quarterly revenue at current spot pricing. (That's theoretical. It has contracts.) Wall Street currently projects third-quarter sales of $3.5 billion.

CoreWeave isn't generating positive free cash flow, but it likely would be -- easily -- if it simply shut off spending and harvested its existing capacity at spot rates for AI compute.

CoreWeave's existing AI computing capacity is also trading at a discount to replacement cost. CoreWeave is worth about $60 billion including debt. Replicating its data centers would take about $60 billion to $75 billion.

If AI is this profitable, then SpaceX, Anthropic, and others need dramatically less external financing, easing pressure on credit markets and alleviating one of the biggest fears of investors. Monetizing AI just isn't the problem investors feared it would be.

That has implications far beyond the hyperscalers. Everything is an AI stock these days, even heavy-duty equipment maker Caterpillar, which also sells power generation equipment that data centers have snapped up.

Fears have battered Cat shares. Caterpillar stock is down about 35% from its 52-week high north of $1,000. Shares now trade for 22 times earnings expected over the coming 12 months, down from almost 40 times in June.

So what's next? The fear will surely move to a slowdown in AI adoption after Anthropic's paying customers don't feel like they are getting bang for the buck.

That fear is for another day.