Anthropic’s 45% Q3 growth tests AI capex trade

Anthropic’s Q3 revenue rose 45% to $16.8 billion, slower than Q2’s triple-digit pace, Seeking Alpha’s Wall Street Lunch podcast transcript captured Oct. 15 said.

The shift matters because investors expect Anthropic to reach $110 billion in annualized revenue by year-end, while the transcript said AI names saw initial selling before buyers returned.

Seeking Alpha, citing the Financial Times, said Anthropic told investors it remained cash-flow positive, producing $1.70 in revenue for every $1 spent on computing power. That ratio is central to investor scrutiny of whether AI companies can convert heavy infrastructure spending into durable revenue.

In the Oct. 15 episode, Menlo Ventures partner Matt Murphy, speaking on CNBC, said, “there's a lot of talk about slowing, but the data doesn't suggest it.” He added: “Our data continues to show that Anthropic's gaining market share, not losing.”

Murphy said companies are testing open-weight models, whose parameters can be accessed or adapted, to reduce costs. But he said most businesses would limit their use to about 20% to 30% of tokens, the units AI systems process, because “frontier intelligence matters” for higher-quality applications.

The transcript placed that debate beside a hotter U.S. inflation reading. The Producer Price Index rose 1.3% in September, versus a 0.5% expected increase, lifting annual wholesale inflation to 6.3%.

Core PPI, which excludes food and energy, rose 0.7%, compared with a 0.3% consensus estimate.

Final demand goods prices increased 2.6% in September, the largest rise since that category was first calculated in 2009, the transcript said. Final demand energy prices rose 10.8%, including a 20.3% increase in gasoline prices. SoFi strategist Liz Thomas said headline PPI would still have risen 0.6% without the energy increase, according to the transcript.

Seeking Alpha said Treasury yields slid despite the PPI figures and a hotter core CPI reading on Wednesday, without giving yield levels or basis-point moves. The transcript attributed the counterintuitive bond reaction to investor concern that slower AI revenue growth could reduce future capital expenditure and ease inflation pressure.

Conor Sen, founder of Peachtree Creek Investments, described the bond-market rebound as “intellectually devastating for the Fed and tech supporters,” according to the transcript. He said he did not think the AI expansion was over, but that the market reaction showed tech hyperscalers “bleed like anyone else.”

The episode also highlighted several company moves. FMC was shedding about a third of its value after cutting Q3 guidance, citing weaker-than-expected demand and price reductions on some products. Chief Executive Pierre Brondeau blamed “challenging market conditions and elevated levels of higher-priced FMC products held in inventory by certain channel customers.”

Penske Automotive Group rallied after agreeing to be taken private by Motown Acquisition Corp., an entity owned by Penske Corp. and Mitsui & Co. Holders of Penske Automotive common stock other than the buyers will receive $212 a share in cash, the transcript said.

Manpower Group fell after quarterly sales missed Wall Street expectations and investors focused on a gap between adjusted and unadjusted earnings per share, according to the transcript. The company named Chief Strategy Officer Becky Frankiewicz as CEO, succeeding Jonas Prising, who will become executive chairman.

BofA cut earnings estimates for auto dealers including AutoNation and Group 1 after its Auto Dealer Survey found more repair deferrals and softer dollars per repair order in parts and service. The transcript said parts and service account for half of gross profit.

Source: podcast transcript, Seeking Alpha, Oct. 15