Anthropic’s IPO is coming later this month, and it could fetch a valuation as high as $2 trillion, which would eclipse the valuation at which Space Exploration Technologies Corpwent public earlier in the year. It’s a hefty valuation, to say the least, for a business that faces a lot of competition in artificial intelligence (AI) and which still isn’t truly profitable.
Rather than buying Anthropic’s IPO, there are three better AI stocks that investors may be better off owning right now. Alphabet(NASDAQ:GOOG)(NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), and Microsoft(NASDAQ:MSFT) are all iconic tech giants that are trading at some very reasonable valuations. Here’s why they can be better and safer investments to hang on to for the long haul than Anthropic.
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Alphabet
Shares of Alphabet fell last week after the tech company posted less-than-exciting quarterly results. They fell short of analysts’ expectations, and so the stock nosedived to nearly its 52-week low.
But Alphabet is a terrific business, with plenty of solid assets, including Google Search, YouTube, and its Gemini chatbot, which rivals Anthropic’s Claude. With Alphabet, investors get exposure to a leading AI chatbot without having to take on all the risk that comes with investing in an IPO and a company that still has so much to prove.
Alphabet’s recent results may not have beaten analyst expectations, but they were still incredibly strong overall. The company’s revenue totaled $127.6 billion for the September quarter, which was an increase of 25% year over year. And its operating income totaled $40.6 billion, which was 32% of its top line.
This is an unstoppable AI stock to own, and with Alphabet trading at a forward price-to-earnings (P/E) multiple of just 18, based on analyst estimates, it can be a fantastic buy right now.
Amazon
Another company that gives investors plenty of exposure to AI is Amazon. It too is a growth beast, particularly in e-commerce where its online marketplace is a go-to option for consumers all over the world.
It has invested billions in Anthropic, being one of its key investors. For investors, buying shares of Amazon is a way to get some indirect exposure to Anthropic. It’s not quite the same as buying the IPO directly, but it’s also a much safer option overall; Amazon isn’t going anywhere, and its operations remain robust.
