Anthropic Could Go Public in Weeks. Here Are the 5 Numbers That Will Actually Matter.

Anthropic confidentially filed to go public on June 1, and its actual S-1 could drop within weeks. When it does, there are a few headline numbers many investors will likely fixate on, such as its expected $2 trillion valuation and the potentially record-breaking amount of money the company aims to raise.

However, from a long-term investment perspective, these are among the least important numbers, especially when taken in isolation. Here are the five things I'll be reading very carefully when Anthropic's public S-1 is filed, which could help me decide whether the stock is worth owning.

Image source: Getty Images.

5 things that matter more than Anthropic's $2 trillion valuation

1. Booked revenue

Anthropic has reported its revenue run rate several times, and the growth certainly sounds impressive. It reported its run rate went from $47 billion (annualized) in mid-May to $65 billion at the end of July, with roughly $11.5 billion in booked revenue for the second quarter. There is also a question of gross revenue versus net revenue. In other words, how much is passed through to third parties and how much is actual revenue for Anthropic.

The company's S-1 will include audited, booked numbers for the first time, so we'll have actual figures to perform valuation analysis.

2. Gross margin trends

We don't know what Anthropic's gross margins are, with several analysts projecting that Anthropic will have gross margins in the high 70s (percentage) and will reach positive free cash flow by 2028. But when the S-1 comes out, we'll know where gross margins stand now and how they've evolved over time. Gross margin is especially important for a fast-growing software company that isn't yet profitable, so this will be a key piece of information.

3. Compute commitments

Anthropic's reported obligations include more than $100 billion to AWS over a decade, $50 billion to Fluidstack, and $30 billion to Microsoft's (NASDAQ:MSFT) Azure. But these likely don't tell the full story. Recent reports put Anthropic's cloud, chip, and data center commitments at more than $500 billion over the next decade. Anthropic's S-1 will include a table of contractual obligations, and this will be a very important number for investors to pay attention to.

4. Related-party revenue

There has been a lot of attention paid to the "circular" deals we've seen in the AI space. For example, Nvidia (NASDAQ:NVDA)agrees to invest in a business, with a promise that it will buy that business's products. The concern is that revenue coming from your own investors is lower quality than demand from outside customers. We know that Amazon , Alphabet (NASDAQ:GOOGL), Microsoft, and Nvidia are all investors in Anthropic to one extent. We should get details on how much of Anthropic's revenue comes from the same companies that back its business.

5. Risk factors

In any investment prospectus, a company must thoroughly discuss its risk factors. I'll be paying close attention to Anthropic, especially regarding regulatory risk. There was a period of nearly three weeks in June when Anthropic's two most powerful models were unavailable after the company suspended access to comply with U.S. Department of Commerce export controls, so this is important for investors to read and understand.

The bottom line

Anthropic's valuation is likely to break records, but it isn't enough to make an informed investment decision all by itself. But it's also not necessary to read the entire S-1 cover-to-cover in order to get a sense of what you're buying.

To be perfectly clear, we don't know exactly when Anthropic will drop its S-1. It could be within weeks, or management could decide to wait. But in any event, if you understand the five things discussed here and pay close attention when they're revealed, you'll be in a strong position to put Anthropic's valuation into the proper context.

Matt Frankel, CFP® has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.