The Anthropic IPO Could Come by October. Will It Do Better Than SpaceX?
Key Points
Anthropic is expected to go public this year at a valuation that could be around $1 trillion.
SpaceX stock has been struggling in recent weeks due in large part to its extremely high valuation.
Anthropic's business is narrower than SpaceX's, but it, too, may be plagued with deep losses.
The largest initial public offering (IPO) is in the books with Space Exploration Technologies Corp (NASDAQ: SPCX), also known as SpaceX, officially beginning trading last month. There are, however, a couple of highly anticipated IPOs still expected to come this year, including OpenAI and Anthropic, two big players in artificial intelligence (AI).
Both companies are expected to go public in the near future, and while there's no word on when OpenAI's stock might begin trading, Anthropic's IPO could be coming soon, potentially by October. Could it be a great buying opportunity, and will it do better than SpaceX?
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Anthropic is meeting with investors, suggesting the company is moving closer to its IPO
According to a CNBC report, Anthropic has been scheduling meetings with investors, a sign it is getting closer to its highly anticipated stock offering. However, the IPO may still be a few months away, with Bloomberg projecting it may not be available until October. But a date hasn't been formally announced, nor is the S-1 filing available yet, which details the company's financial results and growth opportunities.
Anthropic is known for its Claude AI models, which are highly popular with coders. It was most recently valued at $965 billion, all but ensuring it'll hit the market at a much lower valuation than SpaceX, which reached a $2 trillion market cap on its first day of trading.
SpaceX has been able to drive a high value despite incurring losses totaling nearly $5 billion last year. The big question mark around Anthropic is whether its losses will be as big or if the company is much closer to profitability. Those details, however, won't be available until the S-1 filing is released, which should be closer to the IPO.
Will Anthropic be a better buy than SpaceX?
SpaceX's stock did well on its first day, but it has been falling in recent weeks, under the weight of its massive valuation. Anthropic is likely to be more modestly valued, but its growth prospects will also not be nearly as massive or promising as those of SpaceX, which is pursuing opportunities not only in space but also in AI and the telecom sector. Thus, the AI stock may still look expensive in relation to its overall size.
Anthropic may encounter similar challenges to SpaceX, given that its valuation is likely to be rich out of the gate, which could impact its early returns, and that's why I don't think it'll do a whole lot better than SpaceX, if at all.
David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.