Tech Stock Slump Cuts Anthropic IPO Valuation Expectations to $1.5T
Institutional investors have lowered Anthropic's expected IPO valuation from nearly $2 trillion to the $1.5–$1.6 trillion range, citing recent tech stock declines and concerns over AI profitability timelines. Despite rising revenues, political headwinds for data centers and unclear monetization paths for cloud giants are driving conservative pricing, making this event a critical test of public market appetite for AI assets.
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IT Home November 3 News — According to a report by The Wall Street Journal today, last week’s tech stock sell-off is reshaping institutional investors’ valuation expectations for Anthropic ahead of its planned IPO.
Over the past few days, these investors have communicated to Anthropic and its advisory team that the company’s valuation at its later-this-month IPO should fall between $1.5 trillion and $1.6 trillion (approximately RMB 9.99 trillion to RMB 10.66 trillion at current exchange rates), significantly lower than the near-$2 trillion level discussed in the market over previous months (IT Home note: approximately RMB 13.32 trillion at current exchange rates).
As widely known, tech stocks experienced a sharp decline last week. The Nasdaq Composite Index fell approximately 10% from its peak, approaching technical correction territory; Intel plunged 29% in a single day, marking its largest drop in over four decades; and Alphabet (Google) saw roughly $500 billion in market value evaporate following its earnings release (approximately RMB 3.33 trillion at current exchange rates).
Investor concerns extend beyond broader market volatility. Sources indicate that worries about excessive exposure to AI are mounting, political resistance facing data centers poses additional risks, and there remains no clear timeline for when hyperscale cloud providers like Amazon and Meta can convert AI investments into visible profits. These combined doubts make Anthropic’s pricing a bellwether event for gauging the market’s true appetite for AI assets.
Anthropic has not yet finalized its valuation target or share offering size. Some investors expect CFO Krishna Rao to adopt a conservative pricing strategy, prioritizing ensuring that IPO buyers achieve substantial gains on the first day of trading. One investor noted that even with a price tag around $1.5 trillion, the stock could push the market capitalization close to $2 trillion by the end of the first trading day. For reference, SpaceX closed up 19.22% on its debut listing day on June 12, surpassing a $2.11 trillion market cap.
Combined with earlier reports, Anthropic plans to launch its investor roadshow as early as next week, aiming to list shares one week before Thanksgiving. The company will disclose the number of shares to be sold and the target price range at the start of the roadshow, at which point the valuation target will be formally set.
According to the prospectus, quarterly revenue through September 30 was $17 billion, continuing to rise from approximately $11.6 billion in the previous quarter, though partly offset by price reductions totaling around $600 million. As tech stocks enter a phase where "results must be delivered," Anthropic’s pricing will directly test the resilience of the AI narrative in public markets.