Tech Stocks Battered by Sell-Off Wave, Anthropic's $1.5 Trillion IPO Faces Valuation and Timing Test

Author: Zhao Ying, Wall Street Insight

AI star Anthropic is facing a major test regarding its listing plans. In the two-day tech stock plunge following the midterm elections, Nasdaq Composite component stocks lost $2.5 trillion in market value in a single day. Originally considered a "must-buy" target, Anthropic's IPO now faces pressure on both valuation and timing.

On Thursday, according to reports from The Wall Street Journal and Reuters, sources revealed that three main investors planning to participate in the IPO have explicitly stated that the $1.5 trillion target valuation may be difficult to achieve, with one believing the actual valuation might be closer to $1 trillion. Meanwhile, some investors have directly questioned whether the roadshow can start as scheduled during the week of November 9, and market confidence in Anthropic completing its listing this year is rapidly fading.

This situation carries profound implications for the broader market. Anthropic has deep business ties with tech giants such as Google, Amazon, and Nvidia. Its IPO was expected to break the record set by SpaceX in June this year, becoming the largest public offering in history. If the listing plan is thwarted or forced into a significant discount, it could further dampen the already fragile sentiment in the AI sector and exert pressure on the broader market heavily weighted toward tech stocks.

Tech Stock Liquidity Stampede: AI Infrastructure Myth Faces a Reality Check

The trigger for this round of tech stock sell-off was this week's midterm election results. The outcome brought a wave of AI policy skeptics into positions of power, and multiple states passed moratoriums that could delay U.S. data center construction, directly striking at the core logic of AI infrastructure investment.

Over the next two trading days, AI-related assets faced a collective sell-off. More than 50 S&P 1500 tech stocks on the Nasdaq fell by over 10% in a single day. Data center and computing power concept stocks such as CoreWeave, Nebius, and IREN led the declines, with their respective market capitalizations halving over the past month. Credit default swap spreads covering CoreWeave and SpaceX hit record highs, significantly raising the market's implied expectation of defaults in the coming years.

Keith Lerner, Chief Investment Officer at Truist Advisory Services, stated that the tech sector underperformed the S&P 500 by 10.7% over the past month, marking the most extreme single-month lagging performance since May 2002. He described the current sell-off as "uncomfortable but not abnormal," while warning that "the rubber band is being stretched tighter and tighter." Data from Vanda Research shows that retail selling intensity is the strongest since the pandemic.

Microsoft also tightened regulatory oversight during the same period on partial data center projects for emerging cloud service providers such as Nebius, IREN, and Nscale, further exacerbating market concerns about a slowdown in AI infrastructure investment.

Valuation Disputes and Missing Key Data: $1.5 Trillion Hard to Swallow

Anthropic had originally planned to complete its listing the week before Thanksgiving, aiming to raise up to $100 billion against an approximate valuation of $1.5 trillion. Earlier this year, the market once anticipated its valuation could reach as high as $2 trillion.

Now, according to Reuters citing four sources familiar with the matter, some investors have begun to view the $1.5 trillion figure as a valuation ceiling rather than a reasonable baseline, demanding greater pricing discounts from the company before willing to lock in subscription commitments. Investors' concerns stem not only from market volatility but also from a review of Anthropic's fundamentals; the company continues to post quarterly losses and has undertaken large-scale capital commitments to AI infrastructure construction partners.

Investors are still awaiting Anthropic's October revenue data, left blank in the latest S-1 amendment, to assess whether the company has regained momentum after slowing growth in recent months. The absence of this key data makes it even harder for institutional investors to make large-bet decisions in the current market environment.

According to The Wall Street Journal, another major investor bluntly stated that even if the market rebounds, convincing institutional investors who recently suffered losses in this sell-off to place heavy bets on the AI sector again remains a massive challenge. This investor did not rule out the possibility of Anthropic delaying its listing.

Evaluating Multiple Paths: The Cost of Delay Amid a Dilemma

Anthropic executives and their advisors are expected to hold meetings within the next few days to discuss subsequent IPO arrangements. According to sources familiar with the matter, the company deliberately avoided publicly committing to a specific timeline throughout the preparation process to retain flexibility for adjustments. As of September 30, the company held $146.6 billion in cash on its books.

Under external pressure, Anthropic faces several strategic options: proceed with the listing at a lower valuation, reduce the fundraising scale, or simply postpone until market conditions improve.

However, delaying the listing is not without costs. Postponing the decision could further intensify external concerns about the health of the AI ecosystem, especially against the backdrop of clear political signals restricting data center construction. Meanwhile, as one of the most highly valued AI companies, if Anthropic is seen as struggling to complete financing, it could transmit negative effects to the broader market valuation, which is heavily concentrated in large-cap tech stocks.

OpenAI Financing Contracts: The AI Capital Feast Accelerates to Recede

By comparison, the experience of AI rival OpenAI similarly underscores the cooling funding environment. According to The Wall Street Journal, OpenAI's latest round of financing has completed only about $11 billion so far, less than half of its initial $30 billion target, and the actual transaction valuation also fell short of prior expectations, settling at $1.25 trillion.

Cherry Lane Investments partner Rick Meckler maintains cautiously optimistic views about the long-term market prospects: "These companies will eventually become part of the future, they will eventually list, and investor interest remains. Private market valuations have run high for a long time, so seeing a certain correction now is normal." However, under current market conditions, whether this optimism can support Anthropic in completing its listing at a desirable price remains to be seen.