Anthropic’s IPO is looking like an increasingly expensive and risky bet after the company released third-quarter financial results yesterday that showed its rate of revenue growth slowing and its expenses climbing at a faster pace compared to prior quarters.
Several analysts Fortune spoke to said math and past experience are not in favor of Anthropic producing stellar returns for investors. That may explain why institutional investors are reportedly pushing the company and its IPO advisors to price Anthropic’s shares at the lower end of a $1.5 trillion to $2 trillion valuation range that the company is seeking in its public stock offering.
Even that may be too pricey, according to analysts. Any IPO valuation above about $1.41 trillion would ask Anthropic’s buyers to pay more than $40 for every dollar the company generated in revenue over the past year—a price level achieved by just 14 of the 4,110 IPOs that took place between 1980 through 2024, according to a study from Jay Ritter, director of the University of Florida’s IPO Initiative. What’s more, those IPOs delivered lower average returns than the broader market, Ritter said.
