Even that may be too pricey, according to analysts. Any IPO valuation above about $1.41 trillion would ask Anthropic’s buyers to pay more than $40 for every dollar the company generated in revenue over the past year—a price level achieved by just 14 of the 4,110 IPOs that took place between 1980 through 2024, according to a study from Jay Ritter, director of the University of Florida’s IPO Initiative. What’s more, those IPOs delivered lower average returns than the broader market, Ritter said.

Against the roughly $35.3 billion in revenue Anthropic booked over the past four quarters, a valuation range of $1.5 trillion to $2 trillion, would mean investors paying between $43 and $57 for every dollar of sales the company generated in the past 12 months.

To justify a valuation north of $1.4 trillion, Anthropic needs a path toward annual after-tax profits of at least $100 billion, Ritter told Fortune. Only a handful of companies have ever earned that much in a year, he said, including Alphabet, Nvidia, Apple and Microsoft.

In the third quarter, Anthropic’s revenue rose nearly 47% from the previous quarter, while compute and infrastructure expenses climbed about 77% to $9.9 billion. About half of that compute bill, roughly $5 billion, came from the company purchasing short-term capacity. Anthropic typically orders compute 12 to 18 months ahead, but is forced to buy more expensive short-term capacity when customer demand or research needs exceed what it has secured. The company attributed the decline in its adjusted operating margin to 15% from 19%, primarily to those short-term costs. 

Tomasz Tunguz, founder and general partner of Theory Ventures, told Fortune that higher compute costs would put increasing pressure on Anthropic’s margins, although he noted that the company’s implied gross margin was still a healthy 85%. Gross margin counts only the cost of serving customers. It excludes the far larger sums Anthropic spends training models and on research, which are booked as separate operating expenses.

The pressure on adjusted operating margins arrived sooner than Tony Trzcinka, an investment grade portfolio manager at Impax Asset Management, said he expected. “The key question is whether revenue can compound fast enough to absorb the future commitments and outpace compute cost,” he told Fortune. He expects the company’s existing obligations and interconnected relationships to limit its ability to borrow at the kinds of low interest rates available to investment-grade companies. This means if Anthropic does need to take on debt to fund its compute capacity, that money will be expensive, further weighing on margins.

But paying more for compute can also help an AI company generate future revenue, Campbell Hutcheson, a senior researcher at Epoch AI, said. Frontier models, such as those Anthropic builds, can command premium prices and help improve the training and inference efficiency of other models, he told Fortune. Because revenue growth often depends on reaching a capability or product threshold first, as with ChatGPT and Claude Code, he said it can be rational for labs to pay a premium to get there first. Hutcheson said Anthropic continued to show “very strong growth, high gross margins” while investing heavily in AI research.

With about $131.8 billion in cash, cash equivalents and short-term investments at September 30, Anthropic has resources to keep investing while it works to improve those economics. Its operations generated $6.6 billion in cash during the first nine months of the year. Ritter said those reserves, combined with IPO proceeds, would allow considerable investment. Trzcinka also views liquidity as a positive for bondholders, while watching for further spending commitments and any borrowing under the company’s revolving credit facility.

In estimating what Anthropic could be worth to shareholders, Aswath Damodaran, a finance professor at New York University’s Stern School of Business, looked a decade ahead. His Oct. 28 valuation—which was produced prior to Anthropic releasing its third quarter results—assumed annual revenue reaching $1 trillion by 2036, a target operating margin of 27.5% and an estimated $100 billion in IPO proceeds. Those assumptions produced an equity value of about $1.475 trillion, which he described as at the lower end of the $1.5 trillion to $2 trillion range.

Damodaran told Fortune that Anthropic’s third-quarter figures gave him little reason to revise his valuation, calling them “the most telegraphed 3rd quarter number of all time.” His earlier post had already discussed slowing revenue growth and continued margin volatility, he said. “If my intrinsic value changed significantly based on this news story, it would be neither intrinsic nor value, just a pricing chase.”

Ritter likewise saw no big surprises in the third quarter numbers, but his research highlights the risk of paying for exceptional growth in advance. In Ritter’s study, the 14 IPOs that commanded the kind of price-to-sales ratio that Anthropic is asking investors to swallow delivered returns averaging 15.4 percent below the broader stock market, measured from their offer prices over holding periods of up to three years, although some companies outperformed. Each company had at least $100 million in revenue over the 12 months before listing, adjusted for inflation to 2025 dollars.

Anthropic has substantial upside potential, Ritter said, but “a lot of things have to go right” for its revenue and profits to grow enough to support such a high valuation.