Anthropic IPO targets $1.4 trillion, six times oversubscribed

Anthropic's listing comes after AI stocks fell for a second straight day on Friday, following Jensen Huang's sudden resignation as CEO of Nvidia. Huang had been at the center of the AI boom, and his departure leaves a question mark over Nvidia and the wider sector. Nvidia reports earnings on Tuesday, but Anthropic's IPO is being framed as the bigger potential driver for AI stocks.

The offering itself has been scaled back in part because of increasing investor skepticism about the AI trade. Anthropic reported run rate revenue of $81 billion for October, which at the $1.4 trillion target would put it at approximately 17 times sales, on par with software stocks like Snowflake and Datadog. It is also reporting triple-digit revenue growth and adjusting operating profit, and it has established itself as the leading AI lab, making it a more attractive proposition than the average SaaS stock.

The company will use a staggered lockup, letting directors, officers, and non-founder employees sell up to 10% of their holdings once the stock starts trading, while others wait 180 days or longer. A surge on opening day is likely to cast a halo effect on the broader AI trade, and Anthropic could displace Nvidia as the central stock in the AI narrative, since Claude and its derivatives represent the AI product for sale.