Anthropic (PC:ANTPQ), the AI startup backed by tech giants Amazon (AMZN) and Google (GOOGL), has significantly raised its growth forecasts. It now expects up to $70 billion in revenue by 2028, compared to just $5 billion this year, according to The Information. The company believes that businesses will drive this growth by using its AI models through APIs (Application Programming Interfaces). Anthropic even predicts that its API revenue in 2025 will be about twice as much as OpenAI’s.
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Separately, the firm’s Claude Code tool is also growing fast, as it’s reaching nearly $1 billion in annualized revenue, up from $400 million in July. Overall, Anthropic’s revenue is expected to hit nearly $7 billion this year, with new forecasts indicating $15.2 billion in 2026 and $38.9 billion in 2027. Unlike OpenAI (PC:OPAIQ), which doesn’t expect to generate positive cash flow until 2030, Anthropic aims to turn profitable by 2027 with $3 billion in free cash flow, and possibly $17 billion in 2028.
OpenAI, in comparison, expects to burn through $35 billion in 2027 and nearly $47 billion in 2028, largely due to its high computing costs for research and development. In addition, Anthropic expects its gross profit margin to swing from -94% last year to 50% this year, and to 77% by 2028. However, if free users are included in the cost calculation (as OpenAI does), margins would be lower at -109% for last year, 47% for this year, and 75% by 2028. Even then, these numbers are close to top-performing software companies, which usually have margins above 70%.
Which Tech Giant Is the Better Buy?
Turning to Wall Street, out of the two stocks mentioned above, analysts think that AMZN stock has more room to run than GOOGL. In fact, Amazon’s price target of $295.62 per share implies 17.5% upside versus Google’s 10%.
