There is no doubt that we are in a FOMO market based on the IPO craze. But even if SpaceX gaps up on the first day of trading, the typical IPO stalls within a few months as insider stock lockups expire and insider selling picks up. As an example, Rocket Lab () has been under selling pressure recently on reports of significant insider selling.
Personally, I do not analyze IPOs until they have traded for a year or so. That way, I can get my risk-reward analysis, calculating the alpha and standard deviation. I like to wait a year and get four quarters of fundamentals I can analyze to see if the stock fits my criteria.
The smart move isn’t necessarily chasing IPOs. It’s understanding where new supply is entering the market. There is a theory that some of the recent AI selling pressure was due to investors raising money to buy SpaceX, but I should add that there is a lot of cash on the sidelines.
Frankly, I think the IPO will be even more successful than SpaceX, since the excitement over the company’s Grok AI has explosive growth. Anthropic seems to be the AI leader right now and a legitimate competitor for Palantir (PLTR). If you’re excited about AI, it’s hard not to be excited about Anthropic.
In the end, the IPO boom this year will be an all-time record, so underwriters, like Goldman Sachs, will prosper from record underwriting revenue. An IPO boom is great for investor confidence and will help to boost the entire stock market. There is no doubt that we remain in the midst of a FOMO (Fear of Missing Out) market, so the investor stampede is expected to persist.