Anthropic IPO: Jim Cramer warns of an IPO glut as investors dig into the S-1's 92 pages of risks

Anthropic’s public IPO filing on Monday, Oct. 26, was the moment Wall Street had been waiting for. By Monday evening, the conversation had already shifted from whether the Claude maker would go public to what its offering, and others like it, could mean for the broader stock market.

The most pointed warning came from CNBC’s Jim Cramer, who said a flood of giant stock sales could end up weighing on the rally.

This article is for information only and is not financial advice.

Jim Cramer’s IPO market warning

On “Mad Money,” Cramer argued that the danger isn’t AI itself but the sheer amount of money companies are trying to raise. CNBC reported that companies have raised $148 billion through IPOs so far this year, and Cramer fears new share supply could outrun investor demand.

“Politics can weaken the bull, higher rates can choke it, but if you want to slay the darn thing, use the IPO lance and stab it again and again,” he said.

He drew a comparison to the dot-com era, when a wave of stock offerings eventually exhausted buyers. Unlike then, he said, “This time around the companies are real. They tend to make big money.” His worry is that fundraising by Anthropic, OpenAI and big tech companies including Meta, Alphabet, SpaceX and Oracle could soak up money that would otherwise go into the S&P 500 and other stocks.

“I think both the debt and the equity markets are running out of money,” Cramer said, before adding: “I am not calling a top. I am just saying that I do not like what I see.”

Cramer’s stock pick tied to Anthropic

Earlier Monday, in the CNBC Investing Club’s morning meeting, Cramer took a more upbeat angle. He said he was encouraged that no single customer accounted for more than 10% of Anthropic’s revenue for the nine months ended Sept. 30.

His Anthropic-related pick wasn’t Anthropic at all. Because Goldman Sachs is a lead underwriter, alongside Morgan Stanley, the deal means big fees for Goldman, and Cramer said he would buy Goldman stock, CNBC reported.

The same recap noted that chip stocks were especially strong Monday morning after the filing, with the Nasdaq up about 1% at the time.

What else investors are learning from the S-1

The Guardian’s review of the prospectus highlighted several points beyond the headline revenue and loss figures:

Among the risks, Anthropic wrote that its technical safeguards against misuse “are incomplete, may be outdated in light of evolving threat models, have been and may in the future again be circumvented, or may fail to operate as intended.” It also described what it believes was a large-scale cyberattack in which a Chinese state-sponsored group manipulated a Claude coding tool to attempt to infiltrate about 30 targets.

The filing flags other business risks, too: insurance for AI-related liabilities may not be available “on commercially reasonable terms, or at all,” its infrastructure is concentrated in the US, data center moratoriums are a concern, and US immigration policy could affect hiring. As a public benefit corporation, Anthropic also said its mission obligations could make some short- or medium-term financial goals harder to reach.

When is the Anthropic IPO?

There’s still no date. The S-1 did not include a share count, a price range or a target valuation. The Guardian noted that some investors have valued the company at $1.5 trillion to $2 trillion, and Fortune reported that Anthropic is expected to target a debut during Thanksgiving week, but neither the timing nor the valuation has been set.

The company plans to list on the Nasdaq under the ticker ANT. Shares can’t be sold until the registration statement becomes effective.

What to watch this week

• Fed decision Wednesday: CNBC’s Investing Club said the Federal Reserve was expected to hold rates steady after its two-day October meeting.
• Big tech earnings: Microsoft, Amazon and Alphabet report this week. Cramer said he wants to see which companies may need to raise more money.
• S-1 amendments: an updated filing with a price range would be the next big step toward a debut.

FAQ

Earlier coverage: Anthropic files for IPO: Nasdaq ticker ANT, $16.3B in half-year revenue and an $80.7B loss (Oct 26)