"Companies like this come along once in a generation": What analysts are saying about Anthropic's valuation
A partner at the family office of Peter Thiel, co-founder of PayPal and Palantir, has nevertheless expressed doubts about the sustainability of the AI developer's revenue
Most experts consider Anthropic's IPO price to be reasonable for a company with a 12x growth rate / Photo: X/Anthropic
Most analysts and investors consider the valuation Anthropic set for its IPO to be justified given its growth rate. The company disclosed the offering price range—$70–78 per share—in an updated draft prospectus on November 10. At the upper end of the range, Anthropic’s fully diluted valuation—that is, including options and other shares owed to employees—would reach $1.4 trillion. Until recently, market estimates had been as high as $2 trillion.
Goldman Sachs, the lead underwriter for the offering, expects Anthropic’s revenue to exceed $600 billion in 2030. However, according to the bank’s forecast, the company will not generate positive free cash flow until that same year, and its commitments for computing power expenses total $900 billion, notes the Financial Times. Optimists call Anthropic’s price-to-revenue ratio attractive, and the offering price—lower than previous expectations—a deliberate tactic that leaves room for the stock to rise, while a prominent skeptic points out the irregular nature of most of the company’s revenue.
Arjun Bhatia, an analyst at investment bank William Blair, expects Anthropic’s revenue to reach $135 billion in 2027. At a valuation of $1.4 trillion, the developer of the AI assistant Claude would be worth 10 to 11 times more. “This is an attractive multiple for a company like Anthropic—the kind that comes along once in a generation,” Barron’s quoted the expert as saying.
The decline in the valuation compared to the $2 trillion figure that was widely reported in August and September is “certainly a negative,” acknowledged Justin Menne, a portfolio manager at Harbor Capital, in a letter to MarketWatch. However, he said, investors’ expectations for Anthropic’s business growth have remained virtually unchanged: they still expect Anthropic’s revenue to reach an annual rate of $100 billion by the end of the year. Menne considers the company’s valuation, as reflected in the IPO price range, to be “quite reasonable given the fundamentals.”
Analysts at the research firm Morningstar estimate the “fair value” of Anthropic’s equity capital at $1.7 trillion. Depending on how quickly its AI tools are adopted, Anthropic could be worth anywhere from $500 billion to $3 trillion, according to Morningstar.
A relatively low IPO price does not necessarily indicate problems with Anthropic’s business, several venture capital experts told Fortune. Lior Prosor, managing partner at the venture capital firm Deep33, called it a “smart strategy”: for investors concerned about the risks of investing in AI companies, it offers “significant growth potential,” while providing Anthropic with the funds to cover its computing power obligations. Aman Verge, founder of the venture capital firm Practical Venture Capital, acknowledges that massive computing costs and slowing revenue growth “have made potential buyers wary.” In the third quarter, Anthropic’s revenue grew 47% from the previous quarter, following a 144% increase in the second quarter. But the lower valuation, according to Verji, lowers investors’ expectations and “leaves plenty of room for growth.”
Anthropic will be able to justify its $1.4 trillion market capitalization if its annual recurring revenue (ARR) reaches at least $150 billion by 2027, wrote Bloomberg analyst Mandip Singh. To achieve this, ARR must grow by at least $5 billion each month—in October, the figure stood at $81 billion.
Jack Selby, managing partner at the venture capital firm Copper Sky and Peter Thiel’s family office, remains skeptical of Anthropic. More than 80% of Anthropic’s revenue is non-recurring and could suffer if competitors improve their products, he said in an interview with Bloomberg. He also sees DeepSeek and other Chinese models as a threat to the company: according to him, they are only half a year behind Anthropic. The expiration of lock-up periods—the time frames during which current shareholders are prohibited from selling their shares—could also hit Anthropic’s stock, the investor warned. “This is a real business, but it’s still in its early stages, and the idea that it’s a trillion-dollar business seems extremely far-fetched,” Selby said.
Bloomberg reported that demand had already covered the entire offering on November 10, when Anthropic began its roadshow. After that, the underwriters, led by Goldman Sachs and Morgan Stanley, prepared to raise the price above the stated range: Anthropic’s valuation could rise to $1.5 trillion or more, and the size of the IPO could exceed $100 billion, the FT reports, citing five sources. Bloomberg also sees a sign of frenzy in resales: investors hoping for large allocations are offering other market participants a portion of their future shares at a 3–5% premium to the IPO price. The brokerage firm JonesTrading is selling such a block worth up to $500 million.
This article was AI-translated and verified by a human editor
