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Anthropic is preparing a Nasdaq listing, reportedly targeting mid-November, with investors now eyeing a valuation of $1 trillion to $1.5 trillion—down from earlier talk of $2 trillion. The timing follows a steep Nasdaq selloff and midterm election results in which candidates favoring stricter AI regulation won in several states, and local communities rejected data center proposals in 40 of 41 ballot measures.
Following midterm election gains, Reuters reports that the new Democratic majorities in the House and Senate are preparing legislation targeting AI companies and data centers. The proposed measures reportedly include rules to curb energy-price increases tied to data center growth and a bill establishing product liability standards for AI developers.
A recent decline in AI-related stocks has pushed the S&P 500 about 6% below its record high, a relatively mild pullback by historical standards. Tech shares fell harder, with the Nasdaq down 11% and chip stocks down 36%, a drop comparable to the 35% chip-sector decline seen during the Covid crash. The tracking data is being updated daily.
Investors in Anthropic now doubt the AI company can reach even a $1.5 trillion valuation at IPO, down from earlier talk of $2 trillion, according to people who spoke to CNBC. One investor called $1.5 trillion a 'stretch' and suggested $1 trillion to $1.25 trillion is more realistic, though figures could shift with market conditions. Anthropic, which was privately valued at $965 billion in May, declined to comment and is expected to begin its IPO roadshow next week under the ticker ANT.
Prospective investors in Anthropic's planned IPO are now discussing a valuation of $1.2 trillion to $1.3 trillion, down sharply from $1.4-1.5 trillion just days earlier and from $2 trillion floated in early October, Bloomberg reported. The repricing followed a 6.4% Nasdaq 100 plunge that erased roughly $2.3 trillion in market value, and the Wall Street Journal reported some major prospective investors want an even lower price, with one suggesting near $1 trillion. Anthropic declined to comment.
US stock markets saw sharp declines on Thursday, with the Nasdaq hit hardest among indices tracking major tech firms including Alphabet, Nvidia, Meta and Apple. The sell-off followed this week's midterm elections, in which Democrats secured sweeping wins that give the party full control of Congress. Several prominent Democratic candidates had campaigned on curbing the unchecked growth of data centres that support AI development.
Technology shares rose on Friday morning, clawing back some losses from Thursday's sharp sell-off that erased trillions of dollars in market value across US, Asian and European markets. Nvidia rose more than 6% after shedding hundreds of billions on Thursday, while SpaceX and Tesla also posted gains, as the Nasdaq opened up 1.23% following stronger-than-expected US jobs data showing 165,000 new jobs added in September.
Major Asian tech and chip stocks sold off sharply Friday after the Nasdaq Composite fell 5.5% overnight and entered correction territory. SK Hynix, Samsung, TSMC, SoftBank, Advantest and Tokyo Electron all posted double-digit or near-double-digit losses, with the Philadelphia Semiconductor Index dropping 12.2% in the prior session.
Apple shares fell in premarket trading after the company's revenue beat expectations but its margin outlook disappointed investors, adding pressure to an already shaky tech sector. Separately, oil prices surged overnight following reports of an attack on Iran's Qeshm Island, while Asian and European chip stocks slid as the Nasdaq-100 remained in correction territory after closing more than 10% below its October 6 peak.
US stocks swung from early-week gains to steep losses, with the Nasdaq falling 1.4% Thursday and nearly 3% Friday after weak tech earnings, ending the week down 2% and October down 5.3%. The S&P 500 dropped roughly 2% for the week while the Dow, buoyed by a shift into defensive stocks, lost under 1% weekly but gained 1.7% for the month. Chipmakers initially rallied on Anthropic's IPO filing and SK Hynix's record profit, but Intel's weak outlook sent its shares down more than 28% Friday, and Fed Chairman Kevin Warsh's hawkish comments on inflation added to investor unease.
CNBC's Jim Cramer said Wall Street volatility likely isn't finished after a rough week in which the Nasdaq, S&P 500 and Dow all reversed early gains to close lower, driven by renewed doubts about the AI trade. He pointed to upcoming catalysts including Tuesday's midterm elections, a jobs report, overseas uncertainty, and more corporate earnings, including Apple and Palantir on Monday. Cramer advised against trying to time a market bottom and instead suggested buying quality companies that have been sold off.
Alphabet, Amazon, Meta and Microsoft have disclosed plans to spend over $740 billion combined on capital expenditures this year, largely tied to AI data centers and chips. Alphabet reported negative free cash flow of $9.1 billion in the third quarter, its second straight quarterly loss on that measure, even as its quarterly capex rose to $51.4 billion. The news hit markets Friday, with the Nasdaq falling 2.9% and chip stocks including Nvidia, Broadcom and Qualcomm declining sharply, following Alphabet's 12% drop the prior day that erased $500 billion in market value.