Anthropic's target IPO valuation is now about $1 trillion below the level a month earlier. Anthropic reportedly began October seeking a valuation of $2 trillion. Investors reportedly lowered that estimate to around $1.5 trillion in mid-October, citing slower revenue growth in the third quarter. The Wall Street Journal reported valuation discussions as low as $1 trillion after Thursday's AI stock declines and investor consideration of Tuesday's midterm election results. Bloomberg cited investors estimating a valuation between $1.1 trillion and $1.3 trillion.
The Nasdaq Composite fell 5.5% on Thursday, putting the technology-heavy index firmly into correction territory. The Nasdaq stood almost 12% below the high reached on October 6. The decline followed Democratic gains in the midterm elections two days earlier, which prompted investors to consider the possibility of slower data center construction. The SOX semiconductor index dropped 12.3%. Investor concerns eased only slightly on Friday, leaving the market's direction uncertain through the weekend.
Anthropic occupies a central economic position in the AI boom, making the planned IPO a potential test of high valuations across the industry. Anthropic has nearly $900 billion in computing and infrastructure commitments involving companies including Amazon, Google, Microsoft and Broadcom. Anthropic's financial performance also affects valuations across chip manufacturers, networking companies, data center operators and power suppliers. A valuation reset could therefore affect both private markets and the broader AI trade. An IPO later in November, if it happens, could also substantially affect public markets.
HSBC chief multi-asset strategist Max Kettner told Bloomberg Radio that successive narratives have driven the AI trade. Kettner said the current narrative declares the AI cycle dead, a view Kettner rejects. Anthropic's IPO is the largest potential catalyst for changing that narrative. Kettner said a conservative valuation, potentially below $1 trillion, might offer the best chance of achieving that change.
Kettner said the worst outcome for the fragile AI trade would resemble SpaceX's IPO. Kettner described initial enthusiasm for buying SpaceX shares that quickly reversed, leaving the stock below the offering price for more than a month. Anthropic's IPO could help AI investments recover or give investors another reason to sell.
Anthropic's IPO Valuation Drops to $1 Trillion Amid AI Market Volatility
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Summary
Anthropic's IPO valuation has fallen to $1 trillion, down from $2 trillion in October, amid market volatility. The drop follows slower revenue growth, AI stock losses, and concerns over U.S. midterm election impacts on data center construction. The Nasdaq Composite fell 5.5%, entering correction territory, while the SOX semiconductor index dropped 12.3%. Anthropic's IPO remains a key barometer for the AI trade, with potential effects on chipmakers and infrastructure providers.
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