Key Highlights

● Anthropic's reported $2 trillion IPO target faces investor pushback, with some eyeing $1.5 trillion.

● Third-quarter revenue was reported at roughly $16.8 billion to $17 billion.

● More than $1 trillion was reportedly erased from chip and AI-related stocks this week.

● City Therapeutics priced its IPO at $18 a share, raising about $200 million.

The reported target

Anthropic, the privately held developer of the Claude AI models, is preparing for an initial public offering. Its reported valuation target of $2 trillion for a planned November IPO is facing resistance from investors, according to market reports, with some eyeing a valuation of about $1.5 trillion instead.

Either figure would be an enormous valuation for a newly listed company. The gap between the two numbers reflects a tension that has run through markets all week: strong demand for AI, set against growing unease about how much investors should pay for it and how the build-out will be financed.

Strong growth, cautious buyers

Anthropic's business has been growing quickly. The company reported third-quarter revenue of roughly $16.8 billion to $17 billion, a sharp increase from the prior quarter, according to market reports.

But the backdrop for a giant AI listing turned harsher this week. Market commentary described investors shifting from asking what AI can do to asking how it will be financed, and one report said more than $1 trillion was erased from semiconductor and AI-related stocks over the week. The Nasdaq Composite sank 572.99 points on Friday to 26,140.03, its worst week since the week ended June 26.

Valuations under pressure

Highly valued AI names bore the brunt. Palantir Technologies (NASDAQ:PLTR) tumbled and entered correction territory relative to its Oct 9 record, with coverage estimating it lost about $34 billion to $35 billion in value. Snowflake (NYSE:SNOW) tumbled, and in a 45-stock software basket, 41 names fell, erasing roughly $130 billion.

CoreWeave (NASDAQ:CRWV), which rents AI computing capacity to developers, plunged to $61.39 amid attention on its debt load of more than $50 billion. Nebius Group (NASDAQ:NBIS) also plunged.

One market commentator said, "That is a change in character, and it's another reason the leaders no longer look like a safe haven."

The IPO window

The new-issue market remains open. City Therapeutics (NASDAQ:CTY) priced its IPO at $18 a share, raising about $200 million, in a deal led by Goldman Sachs and Jefferies. SpaceX, which trades under the symbol SPCX, slipped on Friday and fell for the week amid AI and debt worries, even as Evercore ISI raised its price target to $275 from $230 and kept an Outperform rating.

Index providers are also shaping demand. MSCI (NYSE:MSCI)'s rule on "non-operating companies" could remove Strategy (NASDAQ:MSTR) from its global indexes, with a final list due Nov 11, according to market reports.

Pricing a giant

For an IPO of this size, the final price will depend heavily on how public markets value comparable AI businesses in the weeks before launch. Big Tech earnings next week will be a key input. A senior market analyst said that "upcoming Big Tech earnings will still need to demonstrate that the enormous investment in AI is translating."

Anthropic's November Timeline and Pricing

The Federal Reserve announces its decision on Oct 28. Meta (NASDAQ:META) and Tesla (NASDAQ:TSLA) report Oct 21, alongside IBM (NYSE:IBM), SAP (NYSE:SAP), Texas Instruments (NASDAQ:TXN) and Lam Research (NASDAQ:LRCX), and Netflix (NASDAQ:NFLX) reports Oct 20. Any update on Anthropic's planned November timing or pricing will be closely followed.