‘Through the Roof’ in AI Valuations. Anthropic, Cerebras & CXMT. ARD #140

Michael Parekh AI: Reset to Zero

23 hours ago

8 MIN READ

Today’s theme: ‘Through the Roof’. And sometimes through the floor. The valuation pendulums of this AI Tech Wave. Mr. Market is swinging hard in both directions right now, sometimes in the same day, and three companies today are good case studies of the whole class: Anthropic pre-IPO, Cerebras just post-IPO, and China’s CXMT. Plus a Gadget AI on Lenovo managing through ‘RAMageddon’, and your questions.

1. Anthropic: investors float $2+ trillion, at 30x revenues

Anthropic is in pre-IPO conversations with institutions, firming up its story ahead of the anticipated fall IPO: the second of the three mega-AI IPOs, after Elon Musk’s SpaceX in June, with OpenAI hopefully to follow early next year. Per the FT’s “Anthropic investors bet on $2tn valuation in record IPO”, early investors are floating trial-balloon valuations north of $2 trillion, against a last private valuation around $965 billion, and about $850 billion for OpenAI: the company that used to be the Coke and is for now the Pepsi to Anthropic’s Coke. Bloomberg adds that Anthropic is in talks to buy world-model startup Decart for about $6 billion.

MP Take: Anthropic’s momentum in AI Coding with Claude Code and Claude Cowork is the engine: applications that did not exist a little over a year ago, now the fastest growing enterprise products in tech history, over $50 billion as of this June, with investors floating $100 to $120 billion in 2026 revenues. I had the infamous task of reaching for ‘price-to-revenues’ as a valuation metric in the early internet days, when I led the internet research effort at Goldman Sachs in the mid-90s. Onereached for it because the business models were nascent, and out in the future. Same here: Palantir has traded at 55 times revenues or more, so the argument goes that Anthropic deserves a 30x P/S multiple (not P/E, price to earnings), implying a $3+ trillion valuation, higher than the peak SpaceX reached post-IPO. As I discussed on the Lumida podcast (see below), the $3 trillion scenarios are being talked about in earnest.

The early investors are showing us the property and pointing at the high ceilings: ‘wonderful, airy, amazing light’ in terms of growth. The floors get discussed after the IPO, by another class of investors. I covered the roadshow warm-up in ‘Anthropic warms up Investors for 2026 mega-AI IPO’ (AI-RTZ #1176).

2. Cerebras: through the floor on execution expectations

Cerebras, the AI inference chip company whose IPO I covered in ‘Chip boom AI IPO this week with Cerebras Systems’ (AI-RTZ #1084), went public in May to a great debut and went up, through the roof as it were. It just reported its first quarter as a public company, per Reuters: revenues about $180 million, up 280%, with annual targets raised. The stock still fell 16%.

MP Take: for most semiconductor companies right now there is enough opportunity for everybody. The pie is big enough; it is not a binary scenario. But the market focused on Cerebras versus Nvidia on the inference side and sent the stock towards the floor anyway, despite Cerebras’s longer-term inference advantages on memory chip costs. Pre-IPO, markets get excited about what is possible in the sometimes distant future, even AI data centers in space and chip fabs in space. Post-IPO it gets real: what have you done for me this quarter versus last quarter. That is the volatility of a public company just out of the gate.

3. China’s CXMT goes through the roof, past Tencent

CXMT, the state-backed leading memory company out of China, went public a few weeks ago and is up almost 500%. Per Bloomberg’s “CXMT overtakes Tencent to become most valuable Chinese firm”, its market valuation has crossed half a trillion dollars, surpassing the peak valuation of Tencent, China’s most valuable company. I flagged the CXMT story in ‘US hamstrung on Memory Chip Supply via China’ (AI-RTZ #1128), and again Monday in ‘‘RAMageddon’ Lobbies DC, & Apple vies for China CXMT’ (AI-RTZ #1175).

MP Take: Tencent has WeChat, THE super app that every US consumer company from Meta to Google to Apple to Elon Musk tries to emulate: hundreds of millions of people doing their daily commerce and daily lives in one app. Plus hugely popular gaming, high margins, and aggressive AI investment. Yet CXMT, much lower down the tech stack, in the semiconductor basement of the ship as it were, is for now trading above the company at the top of the mountain. It has not even reported its first public quarter yet; this is the honeymoon period. A notable sign of the AI memory boom times, under the wing of the same forces I covered in ‘Nvidia the ‘Kingmaker’’ (AI-RTZ #1171).

MP Overall Take

These three examples show the high-stakes balancing act between expectations and execution realities of newly minted, and about to be minted, public companies. In the US, in China, anywhere: Mr. Market behaves the same everywhere. Greed ahead of the IPOs, Fear after the company is public, with the focus shifting to short-term metrics, in sharp contrast to the longer-term perspectives pre-IPO.

We have seen it with SpaceX itself: out around $2 trillion, as high as $2.8 trillion, as low as $1.3, now floating between $1.5 and $2 trillion, just as its lockup releases over 900 million shares for additional investors to sell into the public market. A trillion-dollar plus-and-minus volatility bracket is to be expected, with proportional swings for ‘smaller’ public companies beyond them. All three companies today are managing the roof AND floor expectations of the investors around them. That is the core job ahead now.

Gadget AI: Lenovo manages through ‘RAMageddon’

Lenovo, the world’s largest computer company, incidentally also out of China, just reported a quarter that beat expectations, per Reuters, by leaning into AI servers for data centers: over 60% of revenues are now on the server side.

MP Take: the biggest computer makers, Lenovo on the Windows PC side and Apple in its own ecosystem (as I covered in ‘Apple’s supply chain locks out most tech memory pressures’, AI-RTZ #1010), have some of the most robust supply chains on the planet, so they can anticipate ‘RAMageddon’ and navigate through it. With memory going from under 5% of a computer’s bill of materials toward 20 or 30% or more, demand degradation is coming. The smart operators are selling more into enterprise and cloud servers while consumers wait out prices. The background is in ’‘RAMageddon’ really here to stay’ (AI-RTZ #1145).

Q&A

Q1: Biggest surprise on ‘RAMageddon’ so far? ANSWER: How well the companies I track are executing through the pressures, Google’s new Pixel line included: raising prices to mitigate, trimming RAM per unit, and navigating the supply crunch.

Q2: What still worries me about ‘RAMageddon’? ANSWER: That despite all the navigation through these stormy waters, real demand destruction is still in the cards across laptops, smartphones and gadgets of all types, measured in the hundreds of billions of dollars. It may also stretch out the transition I call mainframe AI to local AI, from three to five years to longer, as consumers wait on upgrades.

Today’s AI-RTZ #1177 is on Google’s new AI chief ‘KK’, running AI products before AI labs.

Tomorrow it’s ARD 141 and AI-RTZ #1178.

Full Source Reading

For the broader context, see the canonical sources for ARD 140, in today’s narrative order:

Event 1. Anthropic’s $2+ trillion trial balloons

Event 2. Cerebras, through the floor post-IPO

Event 3. China’s CXMT past Tencent

Gadget AI. Lenovo through ‘RAMageddon’

Clips from today

Clip 1. Cerebras: Beats, Raises, Still Drops 16%

The first quarter as a public company: beat, raised, and down 16% anyway.

MP Take: pre-IPO, markets price the possible. Post-IPO, it is what have you done for me this quarter. The pendulum, live.

Clip 2. China’s CXMT Tops Tencent’s Valuation

A memory chip maker from the basement of the tech stack passes the super-app company at the top of the mountain.

MP Take: honeymoon period, yes. But also a sign of how hard the AI memory boom is running.

Clip 3. Mr. Market: Greed Pre-IPO, Fear Post-IPO

The overall take: expectations versus execution, and the SpaceX volatility bracket as the template.

MP Take: a trillion dollars of plus-and-minus is the new normal for the mega-AI IPOs.

Clip 4. Lenovo Rides Through ‘RAMageddon’

The world’s largest computer maker beats its quarter by leaning into AI servers.

MP Take: robust supply chains and an enterprise tilt are how the smart operators manage the roofs and floors of memory pricing.

An impact of the AI Tech Wave worth tracking. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here.)

‘Through the Roof’ in AI Valuations. Anthropic, Cerebras & CXMT. ARD #140

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