We could soon see an Anthropic initial public offering (IPO).
In fact, the AI company is expected to begin promoting its IPO in November 2026, after delaying plans to go public in October. Heading into the potentially red-hot IPO, some investors think it could be valued at $2 trillion, which would make it one of the biggest stock market debuts ever.
But be cautious.
Instead, what you may want to do is wait until the first-day excitement settles. Highly anticipated stock offerings can fuel a fear of missing out, or FOMO, pushing the opening share price well above the IPO price. If you buy into that early rush, you could end up paying a hefty premium simply because enthusiasm is running high. Instead, you want to consider an exchange traded fund (ETF) that has a history of running with new, red-hot IPOs.
Look at the First Trust US Equity Opportunities ETF (FPX), for example.
With an expense ratio of 0.61%, the FPX tracks hot IPOs, giving investors access to new stocks during their initial, most crucial days on market. By buying it, not only can you avoid paying gobs of money for IPOs that may or may not work out, but you’re also being exposed to multiple hot IPOs at the same time at lesser cost.
Even with its share of high-profile IPO disappointments, FPX has delivered strong long-term gains, climbing from around $11 in 2009 to recent highs near $181. The key advantage is simple: whether individual IPOs succeed or fail, the overall excitement and capital inflows into the IPO market tend to support the ETF over time.
With the FPX, it doesn’t matter if the stock is hot or a dud, the excitement surrounding IPOs continues to send the FPX to new highs.
Sincerely,
Ian Cooper
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