Why AI stocks rallied after Anthropic’s IPO filing

Artificial intelligence-linked stocks rose on Monday after Anthropic disclosed paperwork for its initial public offering (IPO), reviving investor enthusiasm for the sector even as concerns grow over debt-fuelled spending on AI infrastructure.

Nvidia, the world's most valuable company, gained nearly 3%, while Microsoft and Amazon advanced almost 1% each. The Philadelphia Semiconductor Index climbed more than 3%, reflecting broad-based gains across the chipmaking industry.

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According to Reuters, a successful listing by Anthropic, a major player in the AI industry, could reshape how investors value companies across the sector, including semiconductor manufacturers and infrastructure providers. The IPO could also influence capital flows as investors reassess their exposure to established technology giants and consider new avenues to participate in the AI boom.

The overlapping investment relationships between major technology companies, Anthropic and its chief rival OpenAI add another layer of complexity to the market. Some of the industry's biggest technology companies have invested in both AI startups, potentially creating competing interests as the companies move towards public listings.

Among other AI-related stocks, shares of neocloud providers CoreWeave and Nebius Group rose 5.7% and 2.3%, respectively, following Anthropic's filing, reversing earlier losses after comments from SpaceX Chief Executive Officer Elon Musk weighed on the stocks, Reuters reported.

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Data centre operators Applied Digital and IREN advanced 1% and 3%, respectively, while memory chipmaker Micron rose 3%. Data-storage companies SanDisk, Western Digital and Seagate Technology gained around 2.5% each.

Chipmakers AMD and Broadcom climbed 2.5% and 3%, respectively. Zoom Communications, an early investor in Anthropic, added 1.5%.

OpenAI IPO in focus as investors assess AI valuations

Investor attention is now shifting towards a potential IPO by OpenAI, another major player in the generative AI market. The prospective listings of the two companies could provide investors with new benchmarks for valuing AI businesses and assessing the industry's long-term growth prospects.

However, the implications for the broader AI trade remain uncertain, particularly as companies continue to commit substantial capital to data centres, computing capacity and other infrastructure required to support the technology.

Reuters reported that Michael Smith, head of the growth equity team at Allspring Global Investments, sees potential investment opportunities beyond the sector's biggest names, particularly among smaller and mid-sized companies addressing infrastructure challenges.

Companies capable of resolving growing infrastructure constraints efficiently and quickly could emerge as attractive investment opportunities as demand for AI computing expands.

The latest rally suggests that Anthropic's IPO filing has renewed interest in AI-linked stocks, although questions over valuations, financing costs and the sustainability of infrastructure spending remain central to the sector's outlook.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)