Key Takeaways
- Meta Platforms launched $35 billion of stock offerings on Monday and plans a separate $60 billion program in 2027, on the same day Anthropic reportedly planned to file publicly for its IPO.
- Jim Cramer warns that Anthropic’s listing will pull money away from the rest of the AI group, a group that includes Nvidia, Microsoft, Amazon and Alphabet.
- Nvidia’s forward P/E is at 17x, the low of its three-year range, even though analysts’ estimate of its fiscal 2028 earnings has risen 25% since the end of June.
- Microsoft looks the most exposed: it trades at 27x forward earnings, and its three-year low is 19x.
AI investors are about to be asked for a lot more money.
On Monday, Meta Platforms (META) launched $35 billion of stock offerings. That same morning, Anthropic planned to make its IPO filing public, Bloomberg reported. The Claude maker reportedly expects its IPO to match or beat the size of SpaceX’s.
Nvidia (NVDA) wants a piece of Meta’s deal too. It’s one of three chipmakers that said they might buy up to $5 billion of Meta’s new shares, though none of them has committed.
Jim Cramer saw this problem coming. On Mad Money a week ago, he warned that Anthropic’s listing will “suck a massive amount of money away from the rest of the group” just because Anthropic is so big.
That group includes Microsoft (MSFT), Amazon (AMZN) and Alphabet (GOOG), and all three report earnings this week.
And Meta is just getting started.
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Meta’s share count is headed the other way
For years, Meta has been shrinking its diluted share count. It fell about 10% from fiscal 2021 to fiscal 2025, to 2.57 billion.
Now Meta is adding stock. The new deals are $22.5 billion of Class A shares and about $12.5 billion of mandatory convertible preferred stock, with a separate $60 billion at-the-market program planned for 2027. Meta expects $135 billion to $145 billion of capex this year. It plans to pay for that with operating cash flow, investment-grade debt, partnerships and new stock.
Daniel Niles, a veteran tech investor, pointed out on X that Meta said in a recent filing that everyone is competing for the same pool of money. In his view, that pool “no longer seems endless like it did back earlier in the year.”
Timing matters too. Aleph co-founder Mike Eisenberg posted that the big tech companies selling stock now “also gotta beat the big IPOs to Market.”
The squeeze shows up in the multiples
When more stock is chasing the same dollars, investors pay less for each dollar of earnings, even if the earnings hold up. Nvidia’s forward P/E has already slid to the bottom of its three-year range.
At 17x, it’s well below its 30x three-year average and far from its 47x peak in June 2024. Over the same stretch, analysts have raised their fiscal 2028 EPS estimate for Nvidia by 25% since the end of June, to $15.92.
Microsoft has more room to fall. Its forward P/E has come up off June’s low but is still below its three-year average.
If Anthropic soaks up a big share of the money investors have set aside for AI, Microsoft’s multiple has plenty of room to slide back toward that 19x low.
A hot Anthropic IPO helps the cloud giants
Cramer’s own point cuts both ways, though. A successful Anthropic IPO, he said, “will give investors much more confidence that the AI data center theme has legs.”
Amazon and Alphabet have the most riding on it. Cramer said their “cloud growth is hostage to Anthropic.” Both also own stakes in Anthropic, so a strong debut would push up what those stakes are worth. Amazon reports on Thursday, and its cloud numbers will be the first real check on how Anthropic’s spending is holding up.
My take: For the listed AI names, the bigger near-term risk is all the new stock coming to market, more than any drop in demand. At 17x, Nvidia’s multiple already looks priced for a crowded market. Microsoft’s 27x doesn’t, so I’d expect Microsoft to feel Anthropic’s pull first.
Strong cloud numbers this week could change that, though. And once Anthropic starts marketing its IPO, which could be as soon as the week of Nov. 9, we’ll see how much money it really pulls in.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
