Dean of valuation Aswath Damodaran pegs Anthropic's worth at $1.475 trillion ahead of mega IPO
AgenciesAnthropic’s future valuation hinges on revenue growth, compute costs and its ability to sustain a premium position in the AI market.
This figure places the AI firm just below the lower end of the widely discussed $1.5 trillion to $2 trillion IPO pricing range. In his latest blog post, Damodaran stated that Anthropic’s story will continue to evolve and change once it starts trading. “Given AI's presence in the economy and markets, I can guarantee you that it will be a roller coaster.”
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What Anthropic’s IPO papers show
Citing data from Anthropic's recent prospectus filing, the Dean of Valuation noted that the company’s revenue has grown exponentially over the last year, with revenues in the first two quarters of this year about fourteen times as high as the revenues in the first two quarters of the last year. But the sobering news is that revenue growth slowed down in the third quarter of 2026, as OpenAI increased market share, compute capacity acted as a constraint and some enterprises moved to cheaper open source models.
The financial statements in Anthropic's prospectus do not currently show investment for compute. Neither the capex in the statement of cash flow nor the debt in the balance sheet currently shows substantial investment in compute power. “Before you accuse Anthropic of hiding the truth (or worse), the company is open about its future compute power commitments, reporting hundreds of billions in compute commitments in future years. The good news is that Anthropic is now catching up with OpenAI, which had the lead on compute power, but the bad news is that this catching up has not been cheap, in terms of cost commitments in future years,” Damodaran said.
The analyst however pointed out that Anthropic’s argument that its customers, once they adopt Claude models within their enterprises, will find them so integral to operations that they will not abandon them, is yet to be tested. "On the financing front, committing to hundreds of billions in compute, purchase and lease commitments exposes the firm to default risk (with a bond rating of BB+), but in response the company will argue that its access to new capital, as a publicly traded large market-cap company, will make this risk recede."
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How to value Anthropic
Anthropic’s prospective listing will make the company the first such AI company to debut on the market, making it a benchmark with no other listed company to compare with. In this context, Damodaran said the value of Anthropic, and any of the other AI product and service companies that will come later, ultimately rests on how big one believes the AI products and services market will become, and what portion of that market the company will inhabit.
“I believe that AI will have the power to disrupt some industries, and that its most powerful (and highest priced) models will displace white collar (and highly paid) employees, yielding an end market size of $5 trillion or greater for its products. In my view, and that is based on a very early reading of the AI business today, Anthropic is aiming for the premium portion of the market and looks like a leader in that portion of the market,” Damodaran wrote.
The analyst believes it is possible for Anthropic’s revenues to approach a trillion dollars in a decade. For perspective, there is no company in the world with more than a trillion in revenues today, with Amazon and Walmart sitting at around $700-750 billion.
“Rather than drown you in cash flow line items, I will present my Anthropic valuation, with a trillion in revenues by 2036, a target operating margin of 27.5% (with the target margin of 32.5% adjusted for regulatory drag), reinvestment that delivers three dollars of revenues for every dollar of capital invested over time and a cost of capital of 9.74%,” Damodaran concluded.
Ashwath Damodaran lists 3 scenarios to judge Anthropic IPO valuation
In his upbeat scenario, the analyst estimates Anthropic’s value for equity of $1.475 trillion. However, in its worst case scenario, Anthropic’s target revenues limp to $200 billion in 2036, margins converge on the mass market, compute power stays scarce and costly, and other headwinds push the company's value to a negative $373 billion. In this case, the company will not survive
His best-case Anthropic scenario sees target revenues surge to $1.5 trillion in 2036, margins converge on the premium market (40%), compute power becomes cheap (sales to capital of four), cost of capital falls to the first quartile for US companies (7.79%), and the regulatory effect on margins is non-existent, yielding a value of $4.04 trillion for equity.
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