Investors have been sharply focused on initial public offerings this year, and the next such operation may be launched by AI lab Anthropic. Why are investors so interested in IPOs right now? They’ve offered the opportunity to get in on some of the most exciting companies in the high-growth artificial intelligence (AI) space. AI is booming now, and the market is expected to reach into the trillions by the end of the decade.
Cerebras Systems (NASDAQ:CBRS) launched its offering in May, the biggest operation in 2026 up to that moment. Space Exploration Technologies (NASDAQ:SPCX) a month later completed the largest IPO ever, raising more than $85 billion and entering the market with a value surpassing $2 trillion.
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Now, Anthropic aims to price on Nov. 18 and begin trading on Nov. 19, CNBC reported, citing people familiar with the situation. Should you participate in the Anthropic IPO? Let’s take a look at what history says.
Image source: Getty Images.
The Anthropic story
Before we look at historical trends, though, we’ll first take a quick look at the Anthropic story so far and what we know about the upcoming operation. Anthropic develops the Claude family of models, and its founders, led by chief Dario Amodei, originally worked at rival AI lab OpenAI.
The company has seen tremendous success in terms of demand and revenue, going from zero in sales three years ago to more than $17 billion in the third quarter of this year. And in the first nine months of the year, revenue soared 1,200% year over year to $33.2 billion. Enterprise adoption of Claude has been tremendous, with 11,900 customers accounting for $100,000 or more in revenue on a trailing 12-month basis. These customers use Claude for a variety of projects, from the simple to the complex, and Claude products may be applied to industry-specific tasks such as robotics or drug discovery.
This is positive, but Anthropic also involves some risk. It’s not yet profitable, with a net loss of $104 billion in the first nine months of this year, and the AI lab pointed out in about 90 pages of its prospectus many potential problems that could arise. These include regulatory and litigation risk, and the idea that as AI models become more advanced, the possibility of doing harm grows too.
20% of IPO shares for retail investors
Anthropic this week said that it would offer 825 million shares at an IPO price between $70 and $78, according to a filing. People familiar with the situation told CNBC that Anthropic aims to allocate 20% of its IPO shares to retail investors — as SpaceX did during its IPO.
This sets Anthropic and SpaceX apart from traditional IPOs, in which institutional investors generally have access to most of the shares, and retail investors get in on 5% to 10%. At the highest pricing, Anthropic could raise more than $64 billion, and the company may enter the market with a trillion-dollar valuation.
Should you participate in this IPO? Let’s take a look back in time to see whether IPOs have delivered big returns in their early days of trading.
A look at the 10 biggest IPOs from 1999 through 2023, including companies such as Rivian and Coupang, shows that eight out of 10 fell in their first three months of trading. And this year’s major IPOs followed that trend, with Cerebras declining 29% and SpaceX slipping 6% in their first three months on the market.
So, history shows us that buying a stock during an IPO isn’t absolutely necessary to get in on a potentially big growth story. In fact, in many cases, investors would have been better off buying shares later on the dip. This means that, if you’re on the fence regarding whether you should buy Anthropic right out of the gate, you don’t have to rush to make a decision. If history is right, other opportunities to buy this AI growth player are likely to arise in the months and years ahead.
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Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Space Exploration Technologies. The Motley Fool recommends Coupang. The Motley Fool has a disclosure policy.
