Key Takeaways
- Commentators now expect Anthropic’s IPO to value it nearer $1.5 trillion than $2 trillion, after its revenue growth slowed to about 45% from the second quarter to the third.
- At $1.5 trillion, a stake of about 12% would be worth about $180 billion to Alphabet, more than Alphabet earned in all of 2025.
- Analysts expect Alphabet’s EPS to grow from $10.81 in 2025 to $15.29 in 2027, and the stock trades at 25x forward earnings.
- The main risk for Alphabet is that Anthropic’s slower growth means less spending on Google’s compute.
Anthropic’s IPO just got marked down, and Alphabet (GOOG) owns a big piece of it.
Alex Kantrowitz, host of the Big Technology Podcast, said Anthropic’s revenue grew 140% from the first quarter to the second. Then it grew only 45% from the second quarter to the third, reaching $16.8 billion. On last week’s episode, he described the mood like this:
“People are saying that this shouldn’t be a $2 trillion IPO. It’s probably going to be closer to $1.5 trillion.”
CNBC’s Joe Kernen said the same on Squawk Pod, and then made the point that matters: “But think about the size of an IPO worth $1.5 trillion.”
Investor Daniel Niles listed it among the reasons AI stocks fell last week, citing “Anthropic rev growth slowing & valuation looking ~$1.5T vs $2T.” The Magnificent 7 ended the week down 3.2%.
Two days earlier, New York Times tech columnist Kevin Roose had already given Alphabet’s side of it on the Big Technology Podcast:
“They own like 12% of Anthropic and like they’re gonna be fine.”
He’s right, and the math shows why.
$180 billion is still a lot of money
Let’s take Roose’s 12% as given. At $2 trillion, Alphabet’s stake would be worth $240 billion. At $1.5 trillion, it’s worth $180 billion.
So the markdown takes $60 billion off the stake on paper. What’s left is still worth more than Alphabet earned in all of 2025…
Alphabet earned about $132 billion last year. The stake would be worth more than a third more than that.
Treat the 12% as a ballpark, though. Roose said, “like 12%.” At a $1.5 trillion price, each percentage point up or down changes the stake’s value by $15 billion.
The backstop sits on top of a growing business
Roose’s wider point was that Google is “stuck between a lot of things right now,” and it’s easy to see why: it licenses its technology, sells compute and chips, and builds its own models to compete.
Alphabet doesn’t need Anthropic to bail it out, though, and analysts expect its earnings to keep climbing…
EPS was $10.81 in 2025, and analysts expect $15.29 in 2027. That’s growth of about 19% a year. A cheaper Anthropic IPO doesn’t change what Search, YouTube, and Cloud earn.
The market also isn’t paying a stretched price for that growth…
Alphabet trades at 25x forward earnings, a bit above its five-year average of 22.6x but well below the 32.7x it hit on April 30. So you’re paying a fairly ordinary multiple for Alphabet’s own earnings, and you get a stake worth about $180 billion on top.
The compute bill is the bigger exposure
The IPO price isn’t where Alphabet is most exposed. Its compute business with Anthropic. Anthropic buys computing power from Google Cloud and from Amazon (AMZN), its other big-tech backer. That means Anthropic’s growth feeds Google’s cloud revenue.
That’s why the growth rate worries me more than the valuation. Kantrowitz’s co-host noted that Anthropic would need to speed up again to reach the revenue numbers the $2 trillion talk assumed. If it doesn’t, and this is pure speculation, Anthropic could end up spending less on compute than Alphabet planned for.
Alphabet will be fine
Even at $1.5 trillion, the Anthropic IPO leaves Alphabet with a stake worth about $180 billion, held by a company whose earnings analysts expect to grow in the high teens. For Alphabet shareholders, I’d call the markdown noise.
Of course, Anthropic hasn’t released an S-1 yet. Until it does, every figure here, including the 12%, is secondhand.
So what is Alphabet stock actually worth?
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