How much demand is expected from the first pure-play generative AI IPO?
Julie Hyman, Pras Subramanian, and Jake Conley from The 8:30 Hosts talk with Avery Marquez, director of investment strategies at Renaissance Capital, about the much-anticipated IPO of Anthropic (ANTH.PVT). They discuss the strong demand expected on the first day of trading for the first company focused entirely on generative AI to go public.
Avery, let me ask you next. Your firm does a lot of great work studying IPOs and the market as a whole. This IPO looks like something we have never really seen before. A company like this going public is unusual, and the market has not tested this situation before.
Tell us what you expect to happen on the first day of trading. What might happen to this IPO over the three months after its shares begin trading?
Yes, I think it would be unreasonable to say there will be no demand for these shares. The type of business and the company itself are big reasons. This is the first company focused entirely on generative AI to go public. It is also a very large and well-known name.
I do think there will be a lot of demand when the shares first begin trading. What happens over the next three months will depend a lot on the share price. If the company is priced as if everything will go perfectly for months or even years, it will have to meet those high expectations. Investors will need to see strong results in its first earnings report. They will also need to make money on their investment if they are going to keep putting money into the company.
So, yes, I expect strong demand when the shares first begin trading. After that, a lot will depend on the value the company sets when it prices the IPO.