Outflows from tech stocks, a rocky start, and market distortions: Why Anthropic’s IPO Is Risky

Strategists see three threats to the stock market in Anthropic’s IPO, according to Business Insider. The developer of the AI model Claude published a draft prospectus on Monday and is expected to go public on the Nasdaq in November with a valuation of $1.5–2 trillion. These are challenging times for AI stocks: amid growing investor concerns about the sustainability of the AI boom, the Nasdaq 100 index has fallen 6% from its early-October peak.

Money will flow out of other tech stocks. To make room in their portfolios for Anthropic, investors may sell other stocks, Thierry Wizman, a director at Macquarie, told Business Insider. According to him, shares of chipmakers and cloud-based AI providers—which are already under pressure—are likely to be hit harder than others. Tech giant Meta is also vying for investors’ money: on October 26, it announced a $95 billion stock offering to finance AI projects, and the very next day increased the offering to $97.5 billion.

A Disastrous Debut. Art Hogan, a strategist at B. Riley Wealth Management, fears that Anthropic’s IPO price will be too high and that the stock will plummet as soon as trading begins. This is exactly what happened last week to South Korean cloud-based AI provider Elice, whose shares fell by a third on their first day of trading, sending a warning signal to investors. Once Anthropic goes public, its stock will likely become the main barometer of the AI boom, according to Bloomberg. If Anthropic’s debut is unsuccessful, it could trigger a revaluation across the entire tech sector, warns CNBC. “If it doesn’t live up to expectations, the whole thing will be a bit like a house of cards,” the network quotes Sapphire Ventures co-founder Jay Das as saying.

The market will become even more dependent on AI. Currently, the technology sector accounts for about 40% of the S&P 500’s market value. Anthropic’s IPO will further increase the share of Big Tech in the market’s total market capitalization, warns Business Insider. eToro analyst Bret Kenwell estimates that if Anthropic is valued at $1.5 trillion, the combined market capitalization of the ten largest U.S. companies will exceed $29 trillion, and there will be no companies unrelated to AI: Anthropic will displace Warren Buffett’s Berkshire Hathaway from the list.

Some investors quoted by Reuters do not consider the IPO to be a good time to invest in Anthropic. Josh Stevens, Chief Investment Officer at Cresalta Investment Management, is optimistic about AI but will not rush to buy at the IPO: “Even with great ideas and business models, stock prices fall to attractive levels when investors reassess the balance of supply and demand. That’s when the opportunity to buy arises.”

Thomas Hayes, chairman of the board of directors at Great Hill Capital, believes Anthropic’s $1.5 trillion valuation is too high. He acknowledges that the price may rise initially, but in the long term, he expects more favorable entry points than an IPO.

Among the most intriguing details in the document, Axios highlights information about the expansion of the deal with Elon Musk’s SpaceX. Anthropic’s payments for SpaceX’s computing power could increase 2.5-fold: to $3.1 billion per month from $1.25 billion at the time SpaceX filed for its IPO, with the total amount reaching up to $120.5 billion by 2029. Starting in the first quarter of 2027, either party will be able to terminate the agreement by giving the other 90 days’ notice, according to the prospectus.

Axios also noted another fact: Anthropic estimated that customers who used its models in violation of the terms of use or contract terms accounted for 5–7% of revenue for the first nine months of 2026. The company expects this share of revenue to decline, as it has tightened controls—particularly in August and September—but does not know how significantly or when this will affect sales.

Tomáš Tunguz of Theory Ventures, as quoted by the publication, sees arguments on both sides. The company’s rapid growth with high margins and its second-quarter operating profit speak in its favor. Working against it are $637 billion in commitments to pay for computing power and no guarantees that customers will remain loyal to Anthropic. The IPO will be a test of investors’ confidence that demand for AI will last long enough to pay off the infrastructure being built to support it, Axios concludes.

This article was AI-translated and verified by a human editor