Key Takeaways
- Anthropic is reportedly targeting a $2 trillion valuation for its IPO.
- Billionaire investor Chamath Palihapitiya expects the deal to price around $1 trillion or less, and he says Anthropic would still raise about $200 billion.
- That’s enough to keep the music playing for now for NVIDIA…but things could get ugly fast.
Anthropic’s IPO continues to be the talk of the town. But I think NVIDIA (NVDA) shareholders will especially be interested in the price tag.
Anthropic is aiming high – on last week’s episode of the All-In podcast, the hosts discussed the $2 trillion valuation Anthropic is hoping for.
Chamath Palihapitiya, doesn’t think it gets there:
“What would otherwise in a very clean sheet IPO maybe would have been a $2 trillion market cap. Now, you know, you’re at one or less.”
He doubled down on X over the weekend: “My bet is that the margin of safety for the IPO buyer is at +/- $1T.”
That’s a trillion-dollar haircut before a single share trades.
Why $1 trillion?
Chamath made the call before the prospectus leaked. His argument is that the regulatory risks are piling up. And big institutional buyers will then do what they always do with a long risk list – ask for a lower price.
According to Chamath’s “rough numbers”:
- A $100 billion run rate, meaning the annualized pace of Anthropic’s revenue.
- $2 trillion, which would be 20 times that.
- $1 trillion, which would be 10 times that.
Ten times sales is still a premium price. It just leaves IPO buyers some more room for things to go wrong.
And if the headlines are any indication, some things are definitely going wrong.
What’s $200 billion among friends?
Chamath sees $1 trillion as a win/win:
“At 1T, it gives a good shot at a big return for the IPO buyer. Most every IPO seller is still booking a huge win. Ant [Anthropic] gets $200B and can go build the company of their dreams.”
And of course, that’s where NVIDIA comes in. Because, while not all the additional compute lands at NVIDIA (Alphabet (GOOGL), of course, builds the competing TPUs)….NVIDIA sits at the center of the overall buildout. Here’s what analysts expect for revenue in the next couple of years…
…which depends on continuous funding for the unprofitable frontier labs to pay for all that compute.
The market is starting to show some real skepticism that the music will go on.
You don’t value NVIDIA at ~20x forward earnings if you think the ’28 growth is locked in. There’s increasingly a feeling of pessimism in the air…and NVIDIA, as the poster child of the buildout, is getting a lot of it.
My two cents: For NVIDIA shareholders, the important thing is an IPO that hands Anthropic enough money to keep things going for another couple of years. It doesn’t have to be at a $2 trillion valuation or even a $1 trillion valuation necessarily – it just needs to come with lots of cash for Anthropic to spend.
Unfortunately, you could see this becoming one of those self-fulfilling prophecies:
- Pessimism drives down Anthropic IPO price / causes further delays
- Those delays spread contagion throughout the AI supply chain because Anthropic / OpenAI’s ability to keep paying for more and more compute depends on these outside funding rounds
- The resulting lower valuation throughout the supply chain drives more pessimism.
Add in the Fed hiking rates which makes financing the buildout more expensive…and you can see a lot of ways this could go wrong.
And ultimately, for better or for worse, NVIDIA is at the center of it.
So what is NVIDIA stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what NVIDIA could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
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!
