Buy Google Stock Or The Anthropic IPO?

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On October 29, Alphabet fell nearly 13%. Its worst day ever. About $500 billion of value, gone in one session.

Three days earlier, Anthropic filed to go public at a value that could reach $1.5 to $2 trillion.

So the market is saying something strange: the company that sells the AI computing is worth less and less, and the company that buys it is worth more and more. Google rents Anthropic the chips that run Claude; Anthropic pays the bill. Is the market right?

What You Get For Your Money

Look at what you actually get for your money.

$40.6B	Alphabet operating profit, one quarter (Q3)
$0.97B	Anthropic operating profit, its best quarter (Q2)
$3.4T	Alphabet value at $280
$1.5–2T	Anthropic IPO value (press estimates)

Alphabet Q3 2026 release (measured); Anthropic S-1 (reported). Alphabet value = 12.26B shares × $279.84, Oct 30 close.

Alphabet makes about 40 times more profit in a quarter than Anthropic does. It’s priced at about twice Anthropic’s value. Run Alphabet’s quarter for a year and you get $162 billion of operating profit; Alphabet’s value is about 21 times that. Do the same for Anthropic and it’s about $4 billion, at 380 to 510 times.

Own Google, Own Anthropic

Now the twist. If you own Google, you already own Anthropic.

Alphabet reportedly owns about 14% of Anthropic, with a cap just under 15%. At an IPO value of $1.5 to $2 trillion, that stake is worth $210 to $280 billion. That’s 6% to 8% of Alphabet’s entire value. Google also has the right to buy up to $10 billion more at the IPO price.

And Google doesn’t just own Anthropic. It’s Anthropic’s landlord. Anthropic has agreed to spend at least $114.5 billion on Google’s AI computing through 2033. Every time Claude answers a question on a Google chip, Google gets paid twice: once as supplier, once as shareholder.

Owning both through one stock has a flip side. AI stocks tend to fall together: in 2022, Alphabet dropped 44% from its 2021 peak and Nvidia 66%. If one theme makes up much of a $1 million-plus portfolio, a Trefis partner firm can show you how much rides on it.

Meanwhile the rest of Google is hardly standing still. Google Cloud revenue more than doubled to $30.7 billion last quarter, and its profit more than tripled. It has $561 billion of signed business waiting to be delivered. Waymo was valued at $126 billion in February.

Why Did Google Crash?

So why did Google crash? One word: spending. Alphabet spent $51.4 billion on AI infrastructure last quarter, more than the cash its business brought in. Free cash flow was negative $9.1 billion. It expects to spend $195 to $205 billion this year, and much more next year. Its long-term debt has nearly tripled since December, to $125 billion. Investors are asking the oldest question in tech: what if they build it and the profits don’t come?

That’s a fair worry. But notice who the spending is for. A big share of that $561 billion backlog is AI companies, including Anthropic, renting Google’s computers. Google is spending today on contracts it has already signed. Anthropic’s spending, by contrast, is a promise to pay at least $417 billion for computing it hopes to resell.

For most investors, Google is the better bet. You get the AI boom’s landlord, a reported 14% slice of the hottest tenant, and a cash machine in Search, all at about 21 times operating profit. Anthropic is the purer, faster bet, and it could easily outrun Google. But you pay for that speed up front, and you get no cushion if growth slows.

One more thing to know if you’re tempted by the IPO: some Anthropic insiders can start selling on the first day of trading, with four more waves from day 27 through day 76. New stock tends to wobble when those dates arrive. Patience costs nothing here.

For how Anthropic stacks up against Google at its own IPO, see Anthropic IPO vs Google IPO. For the upside case on Google itself, see Google Stock To $1,000?

How Much Of Your Wealth Rides On AI?

Alphabet fell 44% in 2022. Same company, same AI story. If you have $1 million or more invested and much of it sits in a few tech names, see how much rides on one bet in a free 15-minute call with a Trefis partner firm.

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