Anthropic Set Its IPO Share Price Range at $70 to $78, Valuing It at Up to $1.4 Trillion

Anthropic is expected to go public on Thursday, Nov. 19, and its initial public offering (IPO) pricing is expected to fall in the range of $70 per share to $78 per share. On a fully diluted basis, the start-up could be worth approximately $1.4 trillion.

For investors, that figure signals that Anthropic is being valued more for what it could become than for what it is today.

Image source: Getty Images.

Paying up today

Anthropic is being valued as if its business is on course to be one of the world's most valuable operations. If that isn’t the case, it simply wouldn't make sense for its market cap to be greater than Walmart (NASDAQ:WMT) ($1 trillion) or Berkshire Hathaway (NYSE:BRKA)(NYSE:BRKB)($1.3 trillion).

The good news for anyone considering investing in it, however, is that it's not just pure hyperbole. The company’s revenue trajectory looks promising.

• Revenue in 2023: $41 million
• Revenue in 2024: $386 million
• Revenue in 2025: $4.5 billion
• Revenue in the first nine months of 2025: $2.5 billion
• Revenue in the first nine months of 2026: $33.2 billion

Anthropic is also demonstrating its potential through its customers’ willingness to pay. Not only does it have 1,900 customers spending at least $1 million with it on a trailing-12-month basis, but it also has around 250 customers spending at least $10 million on the same basis. In addition, its net revenue retention rate of 900% suggests that businesses may initially adopt Anthropic's services slowly, but increase their spending over time.

There's a lot of reason to be excited about the Anthropic IPO. But even if the stock price climbs in the first few days of trading, it won't be a straight line to success, nor will retail investors get rich after just one day of trading.

What to consider before IPO day

Anthropic was founded in 2021, and its enormous IPO valuation target underscores both its rapid growth and the high expectations for the young company. And when so much of a company's potential future success is already priced into its stock, the company doesn't just have to meet expectations; it has to exceed them.

Once it becomes a public company, Anthropic will have to live up to analysts’ forecasts, and the regulatory and competitive pressures on it are only likely to grow. Its spending will also be more closely scrutinized if it overshadows revenue growth.

Here's what everything boils down to: Anthropic could become one of the most dominant AI platforms on the planet. But anyone who buys the stock at a $1.4 trillion valuation, or anything close to it, will be investing based more on what the company could become. That entails accepting the risk that it falls short of expectations, takes longer to generate the type of profits investors are anticipating, or fails to deliver meaningful gains at all.

That warrants a long-term investment horizon when buying the stock, to let it reach its full potential. It also means that if you want to add this AI company to your portfolio, you’d be best served to keep it as a small, speculative position. If Anthropic is on the path to justifying a $1 trillion-plus market cap, it's still a long way from doing so. That gives potential shareholders plenty of time to let the company prove what it's actually worth before making an investment decision.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Walmart. The Motley Fool has a disclosure policy.