Anthropic, the AI research company behind the Claude model, is preparing for an initial public offering (IPO) that could see its valuation reach $1 trillion or more, following a recent private funding round that valued the company at $965 billion. This places it in a competitive race to market with other tech giants like SpaceX, which went public in June with a valuation exceeding $2 trillion. The company confidentially filed its intentions with the SEC before OpenAI, indicating a desire to be an early mover in the public AI market.
Retail investors interested in Anthropic's IPO should exercise caution. Historically, IPOs, while often seeing an initial price surge on their first day, frequently underperform the broader market in the long term. Data from Bloomberg on US IPOs over five years ending in 2025 shows a median return of -23.8% and an average return of 6.3% from IPO to May 2026. Only 35% of these IPO stocks had positive returns, and a mere 23% outperformed the S&P 500. This underperformance is often linked to artificial supply constraints, such as lock-up periods, which typically prevent insiders from selling shares for 180 days post-IPO, potentially leading to price drops when these restrictions lift.
Furthermore, Anthropic, like OpenAI, is currently not profitable. Both companies have regularly sought new capital from investors to fund the substantial costs associated with training and operating their AI models. Transitioning to a public company may necessitate a shift in this practice to avoid diluting existing shareholders through frequent new share offerings. While the immense hype surrounding these companies might allow for continued capital raises, there's also pressure to demonstrate profitability. This financial challenge, combined with the risk of falling behind competitors if spending slows, presents unique risks for investors considering these historically large yet unprofitable entities.
