SpaceX, what I wrote about last week, is not the only IPO in the news lately.
Anthropic—the company behind the AI assistant Claude—now is in the process of filing with the SEC for an IPO. This potentially puts them ahead of OpenAI—maker of ChatGPT—to begin publicly trading on Wall Street.
This year is shaping up to be a massive year for the public to invest in some of the biggest companies in America.
Amid all the hype, investors need to know that volatility may ensue. One researcher over at Truist put together this chart revealing the kinds of drawdowns that IPOs can have in their first year.1
On average, hot IPO stocks have been cut in half in their first year.
This does not mean that past performance dictates what newly publicly traded stocks like SpaceX or Anthropic will do or how any given company may perform over the long term.
The lesson is simply that investors must understand that with all the hoopla and salesmanship promising future wealth, you must be prepared to see massive drawdowns along the way.
I do not make predictions about individual companies, but what is important for you to know is that even the best companies can suffer significant dips in price.
For example, Apple has experienced massive declines throughout its history. Since 1990 it has been off more than 50% several times and has even suffered 80% declines.
But guess what: investing $10,000 back then would now be worth over nine million dollars.
Many have not been able to stomach the movements and bad news around even the best stocks.
If you live by hype, you will likely die by the panic.
FOMO and crowd-following are not a great way to invest. Or to live.
Being shocked by stocks declining is like being flabbergasted at frost in winter. The sunshine of summer doesn’t last forever.
Remember volatility is the subscription price you pay for investing and volatility and risk are not the same thing.
These companies may prove to be phenomenal. Even so, know yourself. Know your goals. Invest accordingly.
If you or someone you know need help dealing with all the hype this summer, talk to one of our advisors.
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Source:
1. Chart posted by Creative Planning’s CEO Peter Mallouk at X on June 3, 2026. Accessed online.