Anthropic IPO Poised to Shake Up Stagnant Market

Wall Street's market for initial public offerings has largely stalled, with investors reportedly consolidating funds for a potentially historic debut by AI developer Anthropic, while being hesitant to overpay for other offerings. Anthropic, known for its Claude chatbot, is targeting a valuation close to $2 trillion for its upcoming IPO, which could raise up to $100 billion. If successful, this deal could surpass SpaceX's $86.2 billion IPO in June and significantly boost capital raised in 2026.

Matt Kennedy, senior strategist at pre-IPO research firm Renaissance Capital, stated that Anthropic is the primary focus for the fourth-quarter IPO market, suggesting its potential fundraising could exceed that of all IPOs from 2025 and 2024 combined. This anticipation has coincided with several prominent companies delaying their own public offerings.

Smart-ring maker Oura recently postponed its Nasdaq listing, which had a target valuation of $15.6 billion, citing market uncertainty despite high demand. Holtec Nuclear, a nuclear services provider, also suspended its planned $825 million IPO on September 17. SoftBank similarly delayed the listing of its data-center firm SB Energy due to valuation challenges.

While some attribute the slowdown to Anthropic's impending launch, market observers point to a combination of challenging market conditions, price disagreements, and global instability. "I think I would point to just the tougher market conditions that we’re seeing now," Kennedy said. "If they could get the valuation they wanted, they’d move forward."

Deutsche Bank analysts Marion Laboure and Camilla Siazon noted that uncertainty surrounding the upcoming US midterm elections, ongoing geopolitical conflicts, and rising oil prices have contributed to the IPO delays. They also highlighted that investor pushback against high tech valuations began in the summer, with concerns about the sustainability of AI spending.

Investors are now seeking greater risk compensation, with buyers reportedly demanding discounts closer to 20%, compared to the traditional 10% to 15%. Jay Ritter, a finance professor at the University of Florida specializing in IPOs, observed a distinction being made between AI-focused companies and others. He explained that while investors are willing to pay a premium for leading AI models like Anthropic's, they view capital-intensive infrastructure like data centers as a commodity business.

Despite the IPO slowdown, substantial capital remains available. US mutual funds alone hold approximately $17 trillion in stock assets. However, a difficult summer for new stock listings has made fund managers more cautious. Data from Dealogic shows that the average US IPO's gain from its offer price has shrunk significantly from late June to late September.

Broader economic pressures, including a Federal Reserve interest rate hike in mid-September that pushed the 10-year Treasury yield to a 19-year high near 5.3%, have given buyers more leverage. Jurrien Timmer, Fidelity's director of global macro, noted that yields above 5.2% offer a compellingly safe alternative to stocks, thus pressuring private valuations.

Through mid-September, 109 US IPOs had raised $146.5 billion, according to Renaissance Capital. The performance of Anthropic's IPO, reportedly scheduled before Thanksgiving, is expected to be a key indicator for the rest of the IPO market. A strong debut could invigorate the market, while a poor performance might freeze it well into 2027. If Anthropic ultimately delays its offering, concerns about the safety risks associated with advanced AI, as mentioned in its draft prospectus, could be a significant factor, according to Ritter.