Aswath Damodaran Critiques Anthropic Valuation Cost of Capital

The author presents a self-critique of their recent valuation of Anthropic, addressing feedback regarding revenue targets, compute commitments, governance, and the cost of capital. They argue that a cost of capital of 9.74% aligns with historical market returns and market-implied equity risk premiums, rejecting claims that much higher rates are defensible in the current economic environment. Furthermore, the author outlines how investors should navigate uncertainty through portfolio diversification and awareness of valuation fragilities. Open article →