Private tech valuations face pressure after U.S. market correction

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Private tech valuations under pressure

Highlights

U.S. tech stocks lost trillions on Thursday, with the Nasdaq posting its worst drop since Trump's 'Liberation Day' tariffs, before rebounding Friday.
The Nasdaq is up 6% year to date but down over 4% in the last six months, highlighting widening gaps between public and private tech valuations.
Anthropic's upcoming IPO roadshow, expected within a week, could test private AI startup valuations if the company scales back valuation targets.

Public market signals test private pricing

As reported by Axios, the latest selloff in U.S. technology shares is renewing scrutiny of whether private market valuations are keeping pace with weaker public market performance.

U.S. tech stocks shed trillions of dollars on Thursday, with the Nasdaq Composite posting its worst percentage drop since President Trump unveiled his "Liberation Day" tariffs. While some investors point to midterm election results and concerns that some Democrats want to slow data center construction and other AI-related expansion, the immediate trigger remains unclear because stocks rallied on Wednesday and the Nasdaq is rebounding on Friday.

For investors, the more relevant measure is the broader trend across the year rather than a single trading session. The Nasdaq is up about 6% year to date but down more than 4% over the past six months, raising questions about whether fast-rising private technology valuations, especially among high-growth startups, can continue to diverge from public market direction for long.

Retirement exposure and IPO outlook

An added tension for the sector is that retail financial exposure to private assets is poised to increase even as parts of the electorate show less support for rapid AI expansion. Alternative investments such as private equity and private credit are moving closer to 401(k) portfolios, while "Trump Accounts" could also receive donated tech stocks, though on a smaller scale.

The next major test for private market pricing could come from Anthropic's expected IPO process, with a roadshow likely to begin within about a week. If the company lowers its valuation ambitions, that could embolden investors to push harder in private deal negotiations and reset expectations across the AI startup market.

Our earlier analysis of the Nasdaq 100’s decline highlighted how tech stocks stayed under persistent selling pressure even as strong SpaceX results and ongoing AI enthusiasm failed to spark sustained buying. We also noted the index trading below key short- and medium-term moving averages, with attention on whether support levels would hold or further downside could open up in the near term.

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