TradFi News | Nasdaq Sheds $2.5 Trillion in Post-Midterm AI Selloff as Investors Question Anthropic’s $1.5 Trillion IPO Target

Companies in the Nasdaq Composite lost about $2.5 trillion in market value on November 5, as investors sold AI stocks over concerns that Democratic control of Congress could bring tighter oversight of the data center buildout. The Nasdaq fell about 5.5% that day.The selloff has put a spotlight on Anthropic’s planned initial public offering, expected to be the largest on record, with some prospective investors now questioning both its valuation and its timing.Stocks Rallied, Then ReversedUS stocks opened higher on November 4 after Democrats won control of both the House and the Senate, according to projections by NBC News and CNN. The Dow rose 1.9% at the open.The rally reversed the next day. Nvidia fell about 7% and Broadcom about 8% during the session, according to The National. The Invesco QQQ Trust closed November 5 at $647.05, down 9.55% over the week. More than 50 tech stocks in the S&P Composite 1500 fell 10% or more in the two days after the November 3 vote.The selling spread to crypto, where more than $1 billion in leveraged positions were liquidated over 24 hours, according to CoinGlass.What the Data Center Debate Is AboutThe fears center on data center policy. In March 2026, Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez introduced a bill that would pause construction of new AI data centers nationwide until Congress passes federal AI safeguards covering workers, consumers, the environment and civil rights. Coverage of the bill has not shown support from Democratic leadership.Republicans have backed a different approach. The SANDBOX Act, championed by Sen. Ted Cruz, would let companies test AI under controlled conditions. The White House supports a single federal standard.UBS analysts estimated that around 30% of expected 2028 US data center capacity additions could be at risk if construction is paused.Is AI in a Bubble?Investors are split.The bear case:Independent research firm New Constructs values Anthropic at just $150 billion and called the IPO an “unprecedented test of investor gullibility.”Investor Michael Burry has also criticized the valuation.Keith Lerner, chief investment officer of Truist Advisory Services, described a “buyers’ strike in tech.”The bull case:Anthropic’s Q3 revenue rose to $17.0 billion from $1.4 billion a year earlier and grew 47% from Q2’s $11.6 billion. Its operating loss narrowed to $567 million, according to its amended filing.Axios reported in late September that OpenAI’s annual recurring revenue is approaching $70 billion.AI stocks also bounced in pre-market trading on November 6, with IREN up 18.25%, SanDisk up 10.17% and Micron up 8.30%.Anthropic’s IPO: What the Filings ShowAnthropic filed its public S-1 on October 26 for a listing on the Nasdaq Global Select Market under the ticker ANT. Goldman Sachs and Morgan Stanley lead a group of 22 underwriters. An amended S-1 filed November 2 added third-quarter results:Revenue of $17.0 billionAn operating loss of $567 millionCash of $146.6 billion as of September 30About $895.4 billion in purchase commitments and leasesThe filing still leaves the price range and share count blank.The offering is expected to raise up to $100 billion, according to reports. Anthropic’s last private valuation was $965 billion, in its May Series H round.Timing and Valuation Under PressureAnthropic is aiming to list in the week of November 16, according to Yahoo Finance. But three unnamed prospective investors said the roughly $1.5 trillion target valuation will likely need to come down. One suggested it could land closer to $1 trillion, and another raised the possibility of a delay. Investors had once expected as much as $2 trillion.Four people familiar with investor discussions said buyers doubt the roadshow can take place in time. Executives and advisers plan to meet in the coming days. Anthropic declined to comment.At $1 trillion, Anthropic would trade at about 15 times its annualized Q3 revenue, or about 22 times at $1.5 trillion.Signals to WatchA price-range amendment. The next confirmed signal will be an S-1 amendment setting the price range, which had not appeared on the SEC’s EDGAR database as of November 5.Policy detail. Investors will be watching for concrete statements from congressional leaders on data center rules once the new Congress is seated.The rebound. Whether AI stocks hold their November 6 pre-market gains will show if the selloff was a reset or the start of a deeper correction.