Anthropic IPO Seen as Critical Test for Bank Earnings Amid AI Valuation Drop

Key points

• Anthropic’s IPO, potentially the largest in history, is expected to generate approximately $562 million in fees for underwriting banks, with Goldman Sachs and Morgan Stanley each earning around $112 million.
• Investors have revised Anthropic’s valuation down to $1.5 trillion to $1.6 trillion, a significant decrease from the $2 trillion mark reported earlier in 2026, reflecting growing skepticism toward AI investments.
• Global investment banking activity fell 25% year-over-year in October, while US stock trading volumes dropped 8%, signaling a cooling market that threatens bank earnings.
• US banks broadly tightened lending standards in the third quarter, reversing a four-quarter trend of easing, as borrowing demand weakened across most loan categories.
• The KBW Nasdaq US bank index rose more than 2% from early October to November 2, but individual bank stocks showed mixed performance, with Bank of America shares down 9% and Citigroup down 5%.

Background

Previous coverage highlighted Anthropic’s urgent need for public capital to fund its massive infrastructure expansion, with committed costs exceeding $750 billion. The company reported an $80.7 billion net loss in the first half of 2026, driven largely by accounting charges, despite revenue surging to $16.3 billion. Earlier reports noted that private capital markets could no longer support the AI arms race, forcing Anthropic to accelerate its IPO timeline to November 2026 to secure necessary liquidity.

How outlets are covering it

Evercore ISI emphasizes the financial impact of the IPO on bank earnings, noting that the listing could be the 'swing vote' for the fourth quarter, particularly for Goldman Sachs, Morgan Stanley, and Citigroup. In contrast, The New York Times focuses on the operational challenges Anthropic faces, specifically its struggle to secure sufficient computing power, which has driven an aggressive deal spree. While Yahoo Finance highlights the market’s skepticism regarding AI valuations and the potential for a tech sector reset, Goldman Sachs CEO David Solomon and Morgan Stanley CEO Ted Pick maintain an optimistic outlook, describing the AI investment cycle as being in its early stages. UBS analyst Erika Najarian suggests that midterm election results could further influence capital markets activity, potentially accelerating dealmaking if a Democratic presidential win in 2028 appears likely.

Why it matters

The Anthropic IPO serves as a critical barometer for the health of the AI investment boom and the broader banking sector. A successful listing could restore confidence in AI valuations and support bank earnings, while a poor performance might trigger a wider tech sector reset. Given the significant drop in Anthropic’s valuation and the cooling of investment banking activity, the outcome will determine whether banks can sustain their earnings growth amid rising interest rates and tightened lending standards. This event also highlights the increasing reliance on public markets to fund the massive infrastructure costs associated with AI development, setting the stage for future capital market dynamics.

What to watch

Investors will closely monitor the pricing and reception of Anthropic’s IPO, which is expected to occur as soon as November 16. The outcome will likely influence the trajectory of other AI-related listings and the overall sentiment in the tech sector. Additionally, the midterm election results this week could impact regulatory expectations and capital markets activity, with potential implications for dealmaking in 2027 and 2028. Banks will also watch for signs of further easing or tightening in lending standards as borrowing demand continues to weaken.