My main thing is - why would I buy their stock at the rumored valuation? Regardless of anything else that valuation is basically saying all their growth has been captured, unless they literally take over the world.
If you could go back in time and buy $1000 worth of Amazon when they IPO'd, it would be worth 3.3 million today. Because Amazon's stock value has grown on average 30% year over year for 30 years. Amazon's valuation when they went public was around 400 million.
How much can Anthropic reasonably grow from a 1.5 or 2 trillion dollar valuation? If we want them to grow even half as much as Amazon they'd have to be worth 5.9 quadrillion dollars by 2056. That's 5,900,000,000,000,000, a 16 digit number.
IPOs used to be necessary for growth but that hasn't been the case for many years. Private markets are now so large that the only purpose of an IPO is exit liquidity for employees and early investors. This change has been a major driver of inequality in the states and there are a number of proposals to make it easier for the public to participate.
It's pretty sad that Google, Microsoft, Nvidia, Sequoia etc. are the ones who capture all of this growth and not the public, as would have been the case in the previous generation.
One might ask why the public markets would even offer this liquidity. One important answer is that they are forced to via index inclusion.
So if you know an index buyer who takes satisfaction in staying above fooled-by-randomness active traders, remind them that that they are now the designated unload zone for shares the privates don't want anymore.
I mean Anthropic doesn't have to 5000x to be a decent inclusion in an index fund. It can just go up 10% a year and the index purchasers will be happy.
And yet, active traders still can't beat indexes.
...such as Renaissance Technologies which has only been beating indexes by double digits for 4 decades. Probably just a fluke.
I took the comment to mean "most" active traders, not all. Obviously it's possible to beat the market, it's just very difficult, and many fail trying, especially if it's not their day job.
Agreed, but the issue is that their approach does not scale with more $. There is a reason they do not allow outside investment and it's limited to only employees and early adopters. As a non-profesional (everyone here), it's borderline impossible to find the next Renaissance medallion fund. If it were that obvious who it was, every guy would pile in until their approach no longer works
> As a non-profesional (everyone here)
I wouldn’t be so sure of that
"Buy vanguard etf" is a Google search away. Can you show me where I can invest my money in Renaissance Technologies' funds?
Is RenTech more than a rounding error amongst all active traders?
Is it more than a rounding error amongst ALL (active/passive) traders?
You can thank the JOBS Act of 2012 for that
Is it the EGC lack of disclosure rules (for pre-Unicorns), the fractional share ownership? How is the JOBS Act what drove change?
How so? Could you elaborate on the dynamic that you are identifying?
The laws changed for IPOs. It used to be when the total investors got over 500, including employees holding shares, that would trigger a company to need to go public. It was changed some time ago (not sure if JOBS act or what) to be much higher, like 2000 investors and excludes employees.
This means companies stay private and keep getting private capital/investments (the flip side being private equity in the pre-IPO company) and typically an IPO is really existing shareholders realizing their investment.
So Amazon, Microsoft were forced to go public much earlier, then had their growth. Anthropic has already had growth, Claude AI is well known at this point, and after IPO there may not be as much growth after. In fact, the stock might go down because they have to report their full financials.
Thanks, I wasn't aware of that.
It does seem as if this IPO is the "reward for effort of the last few years" as opposed to "building the runway for the next few years of growth". The latter I can understand as a high risk, high reward investment, whilst the former feels as if it should be a blue-chip sort of investment, but there are too many unanswered questions, or at least too many unique arrangements in the structure for it to be any kind of slow-but-trusted-into-the-future stock purchase.
> It's pretty sad that Google, Microsoft, Nvidia, Sequoia etc. are the ones who capture all of this growth and not the public
the public could buy google, m$, nvidia and so on and benefit from that growth, no?
Anthropic would not have scaled this quickly if it was publicly held. Perhaps, that would've been a good thing.
> It's pretty sad that Google, Microsoft, Nvidia, Sequoia etc.....
Three of those four are public companies, so the public can absolutely participate.
In many ways investing in a very late IPO like SpaceX, Anthropic, or OpenAI is the worst of all worlds for the public investor.
On the one hand you'll never see a 100x return – that's been captured by private equity. But there's still a lot of long-term risk because these companies haven't proven they can deliver free cash flow to justify their valuations. Investing in SpaceX or Anthropic at $1T valuation is very different from investing in Apple or Nvidia.
And think about it.. Because they're so large, Index funds are buying at most 1 year after going public.
The average investor has been lulled into feeling the index is riskless.
I suggest everyone to find a video online by their choice of podcaster interviewing Mike Green to learn more
It’s not riskless, it’s just the benchmark that all active investors and their associated podcasters have to beat.
Active investors usually fall into the same fallacy where people all rate themselves as above average. Mathematically speaking a large portion of active investors have to do worse than average and simply stating FUD about averages won’t change that
The guy from SemiAnalysis said this too. If he buys Anthropic now at $2T and they go to zero, he's fucked, but if they go to $20T, we're all fucked.
They're not really a "good investment" unless they are literally worth more than combined GDP of the entire planet, multiple times over. I don't think I'm buying shares of Weyland-Yutani here, but they sure are acting like it.
Why wouldn't the same apply to Spacex? That one sold and is holding it's IPO price.
The market is unhinged. TSLA also continues to maintain an absurd valuation, and my bet is the same dynamic explains SPCX.
While this is true, something to keep in mind is that the liquidity of the market is finite. The market may be able to hold SPCX up currently but adding an additional $100b (and much more as the lockup periods end) plus whatever OpenAI ends up offering might be too much for a lot of these pensions and the other buyers of these shares can manage. They will naturally get included in the indices as they become able to but the question is whether or not all 6 trillion of collective market cap they're attempting to offload will be able to be held up with time. My working theory is that they're aware of this fact to and it's been part of the reason they've been rushing to the door with these IPOs and non-standard lockup periods.
TSLA is the beneficiary of a slow-walked short squeeze. If measures hadn't been taken, it would have have turned into a black hole for the markets. TSLA was not owned by large institutional holders, and was actually bet against by them, the opposite of SPCX. SPCX is currently liquidity for X investors and it will collapse when they have exited.
People need to go to jail this time.
What crime has been committed?
That's the wrong question. The right question is, "What crimes can be construed to have been committed, in order to put enough people in jail for long enough sentences such that the chain of malicious and destructive financial misconduct which lead to the crisis can be severed?".
We put Capone away on tax evasion. Get creative.
Maybe I’m the only person who thinks this, but I think your line of thinking is very dangerous and way more dangerous than ANT or SPCX.
It's down 8% over past 6 months while the S&P500 is up 7%. It's definitely so far been not a great investment, unless you managed to get in and out during that brief huge upswing
Which I did. Most obvious opportunity for a trailing stop order of my entire time trading, lol.
It stands to reason Anthropic will also have a huge upswing. I may eat my words.
There are people playing that same game on the other end, and they have the tools to exploit market swings which you may not have. Those are the people who will benefit from the potential huge upswing, and that money came from somewhere, most likely from your investment.
Playing the stock market is a loosing game. It is gambling where all the rules and all the odds are stacked in favor of a handful of people who gamble for a living. (it is also systemic exploitation of the working classes; so if you are into worker solidarity [you should] you should not partake in said exploitation).
It is not, played over time, a losing game. Just look at the lifetime graph of any major index.
If you just buy and hold, and don't panic sell during a recession, you'll win.
Will other more sophisticated players make money exploiting short-term swings? Sure. Will other players beat your returns? Also yes.
But that money isn't coming out of your pocket, so why does it matter? You're still beating leaving your money in a savings account, where inflation is outpacing interest.
> Playing the stock market is a loosing game. It is gambling where all the rules and all the odds are stacked in favor of a handful of people who gamble for a living
Indeed. And yet opting out is an even bigger loss.
If I understand correctly, the argument isn't that it can't _hold_ it's price, but that it's not worth investing in if the goal is _meaningful gains_.
The fact its price is only holding, as opposed to having maintained its initial growth, is an indicator (for me anyway) that the bubble is pretty close to its maximum size, and it could only take very few more breaths, cough Anthropic and OpenAI cough, to reach critical mass (mixing my metaphors).
But, as they say, bears sound smart, bulls make money.
Only a small fraction of SpaceX stock is available on the market.
Fwiw I agree that SpaceX is generally completely detached from reality and I am as-close-as-I-can-be to sure that Elon is doing some heavy manipulation behind the scenes, but this has changed recently as lockups expired. IIRC the current float is ~30%, compared to it's initial IPO when it was comically low at ~4-5%.
30% is much higher than 4-5%, but it's still much lower than most public companies (~80%)
As others said, the market is generally unhinged currently, with enough extremely wealthy people needing somewhere to put money that doesn't really matter to them, and I suspect some level of "investing in SpaceX public stock" is done to appease/appeal-to Elon.
Holding price is not enough.
Buying a stock that holds its price is equivalent to putting your money in a savings account with no interest.
I presume you mean a stock that holds its price with no dividend?
stock will likely hold inflation adjusted price unlike saving account.
Given gov currently spends 1T annually on servicing debt, I expect US is forced to print money and increase inflation for a long time.
That means public investors have made 0%
If they grow to 20T then buying the index will also be a good investment but with a good risk hedge.
Isn't it likely that inference providers like Anthropic continue to capture more and more of the share of labor as revenue? Everything up makes sense for a year or two as we automate more and more labor, but at some point unemployment will drag the whole market down. It's difficult to see it working out any other way, unless we come up with something like a token tax.
> Isn't it likely that inference providers like Anthropic continue to capture more and more of the share of labor as revenue?
Not if open weight models turn inference into a commodity that's sold at cost.
They will capture share of labour as the labour works today.
There will be, as is always the case, some amount of new labour skills that emerge and I can't say for sure what percentage or amount that might be.
Looking at tech work being increasingly well the last 20-30y, we can imagine new ways of working might be pretty valued.
It always has been the case that some new labor skills emerge, but that only has to be wrong once. And given that how it's always worked is that the new skills used brainpower to make centaurs of people, to use Cory Doctorow's term, that might not happen this time.
Good point - in a way, if we get AGI, investors have financed the way to their potential undoing.
The term singularity is worn out, but the physics parallel is quite apt - a point where the known gears of economics stop working, and it's unknowable what's there until you get there.
What if, here me out, you got to share in the profits of the companies you buy shares in? Let's call those payments "dividends". Theb it doesn't matter how much shares go up in value.
> if they go to $20T, we're all fucked
Maybe I’m naive but I expect any kind of “we’re just taking over the world now” event with any AI company will be met with enough resistance from 99.99999% of the world’s population that they’ll have to make it a sweet deal for us if they want to survive.
Not if they start making killbots.
Our killbot manufacturing process needs 50% of the oxygen in the earth's atmosphere. Thankfully, unlike GPUs and RAM, which we needed to purchase from their manufacturers, we can extract oxygen out of the air at outrageous volumes and minimal cost. This effort has already begun, therefore by the time you read this, you are unlikely to have the ability to disagree, much less protest. And if you do somehow manage to protest, say hi to one of our many killbots, who are likely to also be in attendance, en masse.
Actually we can do classical theory of strategic interaction here. There will be a range of acceptable negotiated settlements to both parties since both parties have some estimate E of the expected balance of power resulting after a war. If A is the amount of surplus value Anthropic expects to lose in a war and H is expected amount of value humanity expects to lose in a war, the the range [max(E - H, E - A), min (E + H, E + A)] gives a whole continuum of mutually acceptable settlements.
Now there will be bargaining friction given that any power sharing agreement with Anthropic will likely increase their future capacity and thus the future expected balance of power, but maybe AI has a long enough utility horizon that we should all expect to be dead by the time it realizes the long-term expectation advantage
They already exist and Ukraine is still stuck in an untenable position because they gave up their nukes.
US has millions of FSD controlled cars on the road already..
Maybe Anthropic should invest in nukes, to avoid Ukraine's fate.
In an era where AI crawls the Internet all day, I've come to regard humor like this as distasteful.
I am not going to censor myself because at some future time, in some datacenter, an AI is going to misinterpret my comment.
that's very virtuous of you. I'm not sure your mild contempt will make much of a difference if/when a profoundly retarded human gives GPT-69 access to "LAUNCH NUKES LOL" button.
> resistance from 99.99999% of the world’s population that they’ll have to make it a sweet deal for us if they want to survive.
The "dark-enlightenment" billionaires have been planning for a "collapse" for years, and their plans involve bunkers, acquiring citizenship in remote places, pervasive surveillance and armed dogbots/drones, the last 2 powered by AI, naturally.
I love the bunker building. Where is Dario's bunker?
Altman already has a couple I think.
Thiel has gone to Argentina but has a backup in New Zealand (w/ Citizenship).
Zuckerberg just bought an Irish castle (a Medieval bunker of sorts) but probably has others.
Musk probably has plans for a Moon bunker complete with Pleasure-Dome. Investor funded of course. Not sure how cosmic rays affect sperm however.
Brin couild opt for Blimps - imagine floating above the reeks and the wrecks like a Meth from Altered Carbon.
Bezos - does he have a bunker?
Zuckerberg's Hawaiian demesne has a fully underground bunker complete with medical clinic. I know several people who worked on it (and disregarded their NDAs entirely, impossible to prevent people in Hawaii from talking story)
> Altman already has a couple I think.
If they aren't patrolled by giant, iris-scanning eyeballs he's missed out on a vertical.
Sadly true, even to the point of paying for not only the pilot to fly their helicopter to the island in the inevitable collapse, but also the pilot's family. Not as a token of generosity of course, no, because otherwise the pilot wouldn't fly them.
And then they need to staff that island with all the accoutrements they are accustomed to from modern society. And defend it with a navy. And presumably pay for all of this with their billions of ... what, exactly?
Haha, indeed all of the preparations are surprisingly short-sighted. Nevertheless it shows the thought process behind many of the so-called 'leaders'.
Whenever I feel gloomy about the future, I try to think how hilariously dumb the bunker building morons are. Then I feel better.
why they are dumb in your opinion?
Being one of the last humans on earth is highly likely to result in being one of the last humans to commit suicide.
I think humans will survive.
I fundamentally agree, but not if the only ones alive are techbros in bunkers, which was my point.
Because if they're needed, they're not sustainable. And if they're not needed, they're a complete waste.
Maybe these sociopaths should try to save the world rather than making fantasy hedges against its collapse (while actively making things worse).
> Because if they're needed, they're not sustainable
You can pack enough to survive for decades in that bunker, and then see how world will look like. If you are superrich, it is dumb to not take this chance.
> Maybe these sociopaths should try to save the world rather than making fantasy hedges against its collapse (while actively making things worse).
Its very loaded topic. There are other competing sociopaths, and also 8B of population who don't care about saving world much. But both goals(bunker and saving the world) could be tried simultaniously.
> You can pack enough to survive for decades in that bunker, and then see how world will look like.
These billionaire nerds got lucky, but now think themselves as natural-born leaders — as evidenced by their wealth, but they wouldn't survive the post apocalypse.
If society collapses, and you were an elite ex-special forces armed detail on a billionaire's security team, would you continue to accept their now-worthless dollars, or would you or just take a fully-stocked bunker for you and yours?
Remember there are effectively no cops or courts in this world that would stand in the way of the (former) billionaires from being demoted to farm-hand by those with the guns.
Why don't the cops and soldiers in our world do the same? Who's going to stop them?
> Why don't the cops and soldiers in our world do the same?
Consequences from the aforementioned functioning society that would have collapsed in the billionaire's dystopian survival fantasy.
Also, soldiers running amok in rhe absence of a strong government happens in our world - ask any civilian who's been caught up in an insurgency, or look at places like the Democratic Republic of Congo where armed militias run fiefs, and you have to pay tribute to operate a cobalt or lithium mine "their" area.
Because our current society isn't a survival game where we fight over insufficient food. Mostly. Society ensures that most people don't have to choose between behaving nicely towards their fellow humans and feeding their family.
It seems a lot of the bunkerbros don't realize this value of society. They don't need society any more, they think.
imagination of my inner villain says sec team would have collar activated before entering inner bunker, with little explosive which would activate by AI or zuck if even little attempt of aggression happens.
Unless the surveillance is total and the technology flawless and unbreakable, this scheme is a bet against human ingenuity, and can be neutralized given enough time, creativity or unforeseen loopholes. Off the top of my head, a conspiracy among the help to act as a mutual dead man's switch will stale-mate explosive collars: if one conspirator is killed, junior will get dispatched by an unnamed co-conspirator.
there is no absolute system. Even in today's world military and cops can turn against government any moment as other commenter said. In some cases system converges to stable state, in some not (endless coups and civil wars). The goal is to have more stable state, with security team to have enough incentives to not challenge leader and enjoy what they have.
> You can pack enough to survive for decades in that bunker,
Emphasis being survive. Maybe. These morons seem to think this will be a continuation of their current lives. That somehow people will continue to serve them if society has collapsed. They're delusional.
> There are other competing sociopaths, and also 8B of population who don't care about saving world much.
Oh please! The billionaires think that they're so special, they owe their fortune to their inherent genius. But when it comes to helping the world it's apparently "but but the other 8B aren't doing it, I'm just a regular guy who can't accomplish anything!"
Losers.
the technology isn't the company yeah? maybe AI will take over the world but it's unlikely to be a single firm
> Amazon's valuation when they went public was around 400 million.
This isn't just an Anthropic issue, but more and more of the upside of companies have been captured in private markets prior to IPO for around the last decade. This is a consequence of so much money floating around, that IPOing is now the last stop on the train instead of one of the early/middle stops where a company actually needs to raise money.
This is more of a critique of a broken IPO market and the rise of availability of immense private capital. The public are denied access until the private markets are essentially tapped out.
IPO returns have been horrible for years. Past 5 year returns on S&P is ~80%, on NASDAQ 100 about 100% while IPO's have returned 10-15%.
IPO returns for IPO buyers who hold past lockup expiry, yes, it's been really bad.
Biotech IPOs are even worse. There are 5-year segments where only about 1 in 40 biotech & pharmaceutical IPOs trade above their IPO price at expiry.
On the flip side, in biotech, biopharma and SaaS, 2025 IPOs had nearly 10x the valuations of 2015 IPOs. So you may trade below expiry, but the structure of the earlier deals you participated in, you make way more money anyway.
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> My main thing is - why would I buy their stock at the rumored valuation? Regardless of anything else that valuation is basically saying all their growth has been captured, unless they literally take over the world.
I didn't buy Amazon in the early '00s for this reason, and I won't buy Anthropic for this reason. Maybe I lose out, but I like to invest in stocks that look like good investments.
Regardless of how you felt about Amazon as an investment when they went public my point is - they actually the potential to grow as much as they did. I don't believe Anthropic has the potential to grow even a fraction as much.
My point is only that with Amazon stock, even well after the dotcom crash, the valuation only made sense if they were going to become the biggest, most important company in the world.
At the time, I didn't know whether or not they would become the biggest, most important company in the world. They did in the end, but if you live your life betting on every company whose valuation depends on them becoming the biggest, most important company in the world, you're gonna have a bad time.
I'm old enough to remember when IPO's existed to generate equity financing for growing companies. Now they exist to facilitate exit liquidity for mature companies, but a two decades of near-zero interest rates and enough inflation and wealth consolidation to make the "qualified investor" requirements trivial will do that. We're living in the days of the pink sheets again, where you really have to invest in small companies with very little reporting on them, but you already have to be wealthy to have access to those investments.
Trading vs investing my friend
The problem with your reasoning is that something can be a good investment and not have the growth trajectory of Amazon. You can't pick the (more or less) maximum growth example and then say anything less is a bad investment. Anthropic doesnt need a 3000x return. They need to beat alternative uses of that money.
Your argument that it's overvalued isn't really tethered to anything. It's about as whimsicle as the people saying "well it's worth any price because AI is the future." Of course the price matters.
Here is some way to start thinking about it. A lot of mature companies trade at 20-25x times earnings. So $2T needs roughly $80–100B a year in profit eventually. At 25–30% net margin, it means about $300–400B in revenue (something like Microsoft). Or 20%/450B (Google) or 10%/800B (Amazon). Anthropic is still growing rapidly. And intuitively i don't think it's crazy to suggest they may look like one of the current big tech companies in the future.
>Regardless of anything else that valuation is basically saying all their growth has been captured, unless they literally take over
Absolutely not. Not even close to true. They dont even need to become the biggest company.
Ok, but I don't want Anthropic to be worth 2 trillion. Because then I'm just breaking even. I want, lets say, 5x that. I don't think anyone would buy it for only that - but even at 5x they need to be making $400-500B a year, 3x what Microsoft is currently making.
At reasonable expected returns stock market will 5x in about 18-19 years. Anthropic has a lot of time to get to that 10T.
I disagree. AI is supposedly a more disruptive technology than a simple e-commerce website created by a single dude.
What do you disagree with?
It’s a great question. It’s a rational line of thought. However, the market can stay irrational longer than you can stay solvent (if you were planning to go the opposite way).
Oh I'm certainly not betting against them in the short run. I mean people are out here buying Tesla and SpaceX still.
In a world where most stocks don't pay dividends, rationality is kind of out the window. As long as these companies don't go outright bankrupt, or have to sell a bunch of new equity to stay solvent (and therefore dilute existing shares) there's no actual monetary consequence of a company doing good or bad. It's literally just going on vibes
Honestly, in a company that isn't returning capital to shareholders, I don't see the point if it's a company that isn't somehow subject to a potential acquisition. If you don't have a path to monetize your stake, why buy it? These days, just vibes. TSLA and SPCX might as well just be another crypto like Bitcoin
Jack Clark (says that he) thinks that US GDP could grow by 50% by 2030 [0]
> Speaking at the 2026 Per Jacobsson Foundation Lecture during the IMF and World Bank annual meetings in Bangkok, Clark pointed to an extreme economic scenario modeled by Anthropic economists in which U.S. GDP could reach roughly $44 trillion by 2030, which is a nearly 50% increase from the current $30.77 trillion in just four years.
If the total value of US public companies also increased by 50% in that time, they'd collectively be worth about $112T. I guess Anthropic could be worth 10% of that in some scenario? And if we're in that world probably capital has increased a lot faster than labor so US public companies could be worth like 150T or something. Who knows. Nothing about valuations makes sense any more, so what's one more drop in the nonsense bucket.
[0] https://finance.yahoo.com/technology/ai/articles/anthropic-c...
Well I think it'll grow by 70%! I'm a thought leader now, speaking fees on asking thx
You and I can make it grow $10 trillion tomorrow.
I'll write a song for you and sell it to you for $5 trillion dollars and you pay me with a $5 trillion painting.
I mean they're basically printing money and making up new formulas to calculate GDP and inflation, 50% is low, let's aim for 500%
who gives a shit what Jack Clark thinks? I’d be shocked if anyone at Anthropic did. In an industry full of grifters and leeches you’d be hard pressed to find a bigger one.
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Not if we get run-away inflation ;)
Discount rates get updated to reflect it… just fyi
This comment is just repeating a point made in Casual Finance's youtube video here: https://www.youtube.com/watch?v=roe3SgezmmU (timestamp 1:06)
the irony that this argument was made by an AI account is now being copied to argue against the value of the company responsible for making it
People said similar things about facebook, and similar things about Nvidia stock recently (not ipo, but similar "why buy at this price"). Global GDP is over $100 trillion every year, there is a lot of business to do in the world, AI might be able to do a lot, it might be very profitable.
The number might be too high, but doesn't take more than a little imagination and some basic facts about the world to see how it could be worth 20 trillion in 10 years.
Don’t worry AI will tell us how to time travel, you can get your AMZN no problem or just a sports almanac from the future… infinite growth if you can travel into new dimensions :-/
As explained very well here https://m.youtube.com/watch?v=roe3SgezmmU&ra=m
To be fair, if you told Amazon investors in 1997 that their investment would go up 3,300x and Amazon would be worth $2.7 trillion in 2026, they’d have called you insane too. There isn’t a mathematical reason Anthropic can’t be worth that in 2056. I don’t think it will be, but not because of the compounding returns.
Einstein once said “compound interest is the eighth wonder of the world.” It’s very hard for humans to comprehend compounding returns.
Let me put it this way.
For Anthropic to show similar returns over 29 years, it would be valued at many times the current total market cap of the S&P 500. At Amazon’s current value after 29 years of growth, its market capitalization is about 1/3 the total market cap of the S&P 500 at the of 1997.
It’s quite hard to justify that in terms of future cash flows. At even a quadrillion dollar valuation and a 20x revenue multiplier, they’d need $50 trillion in revenue… or roughly 1.5 quarters of current US GDP.
So while mathematically possible, it’s quite improbable.
> There isn’t a mathematical reason Anthropic can’t be worth that in 2056.
"There isn't a mathematical reason Anthropic can't be worth 165x the actual US GDP by 2056".
I'm not suggesting you invest necessarily, but I'll give you the counterpoint.
Amazon would have gotten you rich, but it wasn't there when it IPOed. Anthropic is growing fast, at 4.7B, 11.6B and 16.7B last 3 quarters.
I think people want to believe that AI will be both productive and replace traditional search / ad revenue, which would give it a solid standing for valuation...
Here's a random anecdote for you:
Back in 2018, I sold a bunch of Nvidia stock. I had bought it in 2014, when deep learning was taking off, and it had gone up 10x since then. It was obvious that all the growth had been captured and it was time to get out. I remember feeling pretty smug about timing things just right.
Nvidia's market cap in 2018 was around $150B, and the largest company in the world was Apple at ~$800B. And part of my thinking at the time was, well... Nvidia is already worth about a fifth of the most valuable company in the world. How much can they reasonably grow from this valuation?
In hindsight, I can tell you: the answer is 35x (as of now, and who knows in the future). The idea that any company, much less Nvidia, would be worth $5T within a decade was laughable back then, and yet, here we are.
Nvidia going 35x from $150B doesn’t answer the parent’s point. Matching Amazon’s returns from IPO would require a vastly bigger multiple from an already much higher starting valuation. “People underestimated Nvidia” isn’t an explanation for how Anthropic gets to a quadrillion dollars. It can be hugely successful without giving IPO investors Amazon-like returns.
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Nvidia at $150B however wasn't representing anywhere near 5% of the US GDP.
If ANT lists at 5% of the US GDP and goes up 35x, it'd be worth 175% of the current US GDP.
Except in some hyperinflation scenario, I don't see how that makes any sense.
We don't buy public companies expecting AMZN level return from every single one of them.
I think the strategy is to IPO with a massive valuation and a small amount of float and then hold the valuation long enough to get into a cap weighted index like the S&P 500. At that point investors can harvest the monthly inflows of global investors who blindly dump money into passive index funds.
The thesis here is that in the past short sellers would short sell overvalued stocks in the index and buy undervalued stocks and drive price discovery and that those mechanisms are broken due to:
- Passive index funds dominate the market and swamp the ability of active traders to drive price discovery
- Massive returns of these funds over the last 15 years have made beating the benchmarks difficult and leading investors away from actively managed portfolios
- The rise of meme stocks, options trading and crypto bro traders driving out hedge funds and institutional short sellers - Stock tickers and crypto being seen as disconnecting from the US Treasury’s as an anchor for risk free returns to a “Snow Crash” model where assets represent a stake in a new world order.
the market cap of the world's most valuable public corp has grown at ~24% annually over the past decade (Apple @ 2016 vs Nvidia @ 2026)
in 2016, who would've thought this kind of growth...
The reason to buy any individual stock is you believe it will outperform the market as a whole over N years. If you think all the growth has been captured already and Anthropic will stay below opening price + market growth forever then of course you shouldn’t buy it. But plenty of people don’t think that.
But why would we expect Anthropic to outperform the market over N years when they're opening at such a high valuation? It feels like most of the potential future growth short of world domination is already priced in.
The stock might just appreciate at 10perc YoY. Thats enough to outperform the market. What will almost certainly be true however is that there is going to be a lot of volatility.
Besides the financials I do think there is merit to consider what you do as an investor. You make it easier for the company you invest in to access capital and in such a capex heavy world that is actually meaningfull. So if you believe anthropic is creating more long term benefit for the world than say Google, you might want to buy regardless of direct financial expectation.
This is nonsense.
Only the investment management business cares about alpha.
Individuals pick stocks because they believe they can generate the greatest absolute returns.
You live in dream land if you think the average trader even knows what cost of equity is.
I feel like you're treating the stock market like a horse race. Amazon outpaced the stock market by 3x over the last 30 years, and it's just incredibly unrealistic to make that the standard for buying a stock. Anthropic shouldn't be expected to increase any more or less than the rest of the market and that's if you don't believe there's a bubble. (A bubble is by definition when prices don't reflect actual value)
The only reason to buy this stock specifically is if you think it will outperform the market though, otherwise you're taking a more risky position with no upside.
Put another way, the risk has to be worth the potential reward - expecting Amazon-like returns might be unrealistic, but what level of returns would be necessary to counteract the amount of risk you're taking on if you buy Anthropic stock? And what kind of valuation would Anthropic have to reach for that to be possible?
Exactly. And for every Amazon, there's 100 companies that no longer exist.
It makes more sense if you only look at it from the perspective of personal finance.
If I expect Anthropic to perform as well as the market, I can lower my risk substantially and see a lot of its upside with the right mix of ETFs. It doesn’t make sense to take on all that risk if I have a much less risky path to the upside. On the other hand, if I expect it to outperform the market, it might fit in my high risk bucket. So from the perspective of individual investors, it’s about matching risk levels and returns.
Buying for dividends?
"How much can Anthropic reasonably grow from a 1.5 or 2 trillion dollar valuation"
Bahhaa. I love it when a normal guy just exposes the issue. Yes. 10 trillion is getting close to us GDP lol.
Love one of the last lines in the introduction. "bring forth an age of miracles". Lacking in optimism and ambition they certainly are not.
I mean, I understand you’re using your brain to do this analysis. But somehow, the valuation will grow and investors will make money.
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It's AGI dude, your calculator can't even reach the valuation multiplier needed to compute your gains. /s
Valuations are a function of growth rate.
Anthropic growth rate is truly unprecedented at it's scale.
They are 10x revenue YoY.
Note: I'm not justifying it, just explaining how the markets are rationalizing it.If I was selling dollars for 50c and Nvidia, alphabet and Amazon giving me dollars for a piece of my company, my revenue growth would be the same. That’s what Anthropic is doing.
That's no longer the case though anymore according to the S-1.
lol yeah if you completely discount the actual amount they paid for that compute which is hidden in the 70Bn of debt which is waved away as a non operating loss, sure.
That's per inference compute right? Or does it also include training compute?
It’s per unit of bullshit. No one knows what the true cost of Anthropic’s compute is because of circular financing.
Stop posting nonsense ok?
Valutions are a function of cash flows, growth of those cash flows and risk. Don’t forget to discount properly on your way out.
Hackernews commenters generally dont care about the Anthropic's financials because they have unassailable grievances.
At $2T Anthropic would need to look roughly like Alphabet today by 2030 for investors to earn a normal market return (20-25X earnings). That or similar baselines should be the basis of discussion, not if AI is overhyped, if it will grow faster than Amazon did, oligarchy(?), etc.
Why would you expect this to be a magical making money stock?
Unless you have special insight, you should assume all stocks are equally good buys.
There's not going to be an IPO at a price where everyone agree that it'll see a 30% growth over 30 years. Obviously that'd be priced in.
"Unless you have special insight, you should assume all stocks are equally good buys."
Lol maddest thing I've read all day
"priced in"
I smell your efficient market hypothesis argument, before you even begin just keep in mind that does not apply here, it's an IPO, the price is not set by the secondary market
Even so, I'm not a fan of EMH
> "Unless you have special insight, you should assume all stocks are equally good buys."
> Lol maddest thing I've read all day
didn't someone like the WSJ to a long term experiment picking a basket of stocks by throwing darts at the paper? They beat most/all established funds over 5 years or something like that. I don't think it matter much, i just buy VOO when i get my bonus and go back to living my life. That strategy is on track to put two kids through college.
You're doing amazing then, good for you!
Regarding the stock picking experiment, yes, there have been many similar experiments. The premise is just pick a random basket of stocks and see how it performs over decades. Indeed those have outperformed cap-weighted the indexes, most of the time.
How? If you pick a random basket of stocks, you'll end up with mostly small-cap stocks. Cap-weighted indexes are heavily driven by a few large stocks. Most years, small-cap outperforms large-cap (Fama-French 5-factor model[1]). So the "monkey picks stocks" experiment is actually just an exercise in harvesting what is called the "size premium".
Since the AI boom, large-cap has been significantly outperforming small-cap, so if you run the same "monkey picks stocks" experiment, it would likely underperform most of the time.
If you want to easily visualize this, just go on TradingView and compare SPY (cap-weighted S&500) with RSP (equal-weighted S&P500).
[1] https://www.quantt.co.uk/resources/fama-french-model-explain...
It's simpler: If this stock was such a great deal that everyone would buy the it over anything else, then clearly Anthropic had set the price too low.
I would actually argue that if they price the IPO too low, people would assume they are not confident in their company and the whole AI sector would sink.
Almost like a "Veblen good" type investment.
They basically have to price it at an unreasonable valuation so that people curse them while they take it. There's no way around it.
I think the argument is that the valuation is so high because the enormous growth IS priced in, but still being far from guaranteed. Meaning there's only downside: if the enormous growth is realized it would be a wash for your investment since it is already priced in, and in the plausible scenario it fails spectacularly or only grows moderately your investment will lose a lot of value.
It's an IPO, nothing is "priced in" until is actually being transacted in the secondary market
There's a good reason IPOs are shown to underperform the market
Yes, lots of downsides on this one, but people see it as a call option on a future where AI replaces all jobs, what would you pay for that? A rational response from someone that accepts the premise of the question is likely "anything"
> It's an IPO, nothing is "priced in" until is actually being transacted in the secondary market
Well, priced into the IPO price by Antrophic. It was you who said it would be priced into the IPO at launch, I just used the same terminology you did: "There's not going to be an IPO at a price where everyone agree that it'll see a 30% growth over 30 years. Obviously that'd be priced in."
If you don't think one should assume the market's expectations of future results are accurately priced into the IPO price, it's an argument in favour of the comment you tried to argue against, not contrary to it.
> Yes, lots of downsides on this one, but people see it as a call option on a future where AI replaces all jobs, what would you pay for that? A rational response from someone that accepts the premise of the question is likely "anything"
Even if you buy that premise, there are more premises needed. First (1) AI replaces all jobs, then (2) private AI models will be able to convert it into profit without being contested by open models, razor thin margins due to competition, regulation/nationalisation, or general societal upheaval, finally (3) Antrophic specifically will "win the race" and capture the lion's share of that market.
That being said, I would not bet any money on the stock losing value in any reasonable time frame either. It's enough to take a quick look at Tesla to see that fundamentals or actual results does not necessarily matter for a hyped sci-fi stock, even in the long term.
> priced into the IPO price by Antrophic
If that's what you think "priced in" means, I've a brand new company with a 1 trillion $ valuation priced in, would you like to buy some shares from me?
> It was you who said it would be priced into the IPO at launch
I actually said in my initial comment that the "priced in" argument is not even worth invoking, but here we are.
> If you don't think one should assume the market's expectations of future results are accurately priced into the IPO price, it's an argument in favour of the comment you tried to argue against, not contrary to it.
The comment I answered to initially said "Unless you have special insight, you should assume all stocks are equally good buys.", written by someone else. To which I replied "I smell your efficient market hypothesis argument, before you even begin just keep in mind that does not apply here, it's an IPO, the price is not set by the secondary market"
> (2) private AI models will be able to convert it into profit without being contested from open models, razor thin margins due to competition, regulation/nationalisation, or general societal upheaval, finally (3) Antrophic specifically will "win the race" and capture the lion's share of that market.
Very good arguments
Sorry, I confused you with the user thomasahle that I initially responded to, which explains the confusion here. I don't think we disagree with each other.
Indeed, we're in violent agreement hahaha
Or nothing since there is no market or spending with no jobs for people?
It is my belief that while humans exist, there will be markets, one way or another. There will always be exchanges of value between people. There will always be people at different levels, and a form o currency to qualify for the higher levels. Even in communist societies this was true
So, a future where there is no market can only be a future where humans are extinct, in my opinion (some form of communism won't work)
If someone believes markets will still exist (one form or another) and there will still be exchanges of value between people, even in the most maximalist AI future - then I think it becomes rational for said person to seriously consider buying AI labs, even at stupid valuations
Admittedly I've formulated my previous comment wrong, I should've written "a future where AI has the potential to fulfill all jobs known today", instead of "a future where AI replaces all jobs"
As mentioned in other comments, I'm not trying to convince anyone to do anything, I'm here just to argue different points and positions
In today's world, yes.
But in the past, rules & regulations basically forced companies to IPO at a certain size. This meant that when they IPO'd, there was still growth upside.
Those rules are gone now, so they can stay private and have all the growth happen privately. When they IPO now, it's more just an exit. The growth was captured by insiders only.
There weren't any size caps on IPOs and no regulation can tell a company what multiples to IPO at, that's just false information
If it was really "just an exit", people wouldn't buy the IPO and it would flop
Of course people believe there is room for more growth, that's why they are buying it
Even in this thread you can see people (not me) arguing that the IPO is too cheap and it's easily worth 3 trillion $ like numbers mean nothing
Possibly parent is thinking of https://en.wikipedia.org/wiki/Jumpstart_Our_Business_Startup... which did change some conditions, though not in terms of "multiples".
People participate in betting and chance games even if the odds are against them.
Sometimes, there is no logic behind what people do, ultimately hoping to strike gold once while wasting money otherwise.
If that's your interpretation of things, that there is no logic behind some of the smartest people in the world throwing tens of billions at Anthropic with no logic behind it, I have no further comments
they were not forced but they were forced to report like a public company even if they didn't IPO. all the cost with none of the benefit was an incentive to IPO earlier.
No
But those other ones at least have the room to potentially do that, even if most won't. So what GP is saying is that this is a magical stock indeed, but the other way around, in that it's magically capped.
The point OP is making is that it is not, in fact that its the opposite: its a magical valuation that almost guarantees you lose money.
Also rare for an IPO, I assume.