Evercore ISI strategists warn that upcoming OpenAI and Anthropic IPOs, combined with tax-loss selling, could lead to a selloff in weaker AI-related stocks. Investors may divest from underperforming assets to free up capital for these highly anticipated AI IPOs, increasing pressure on identified struggling companies.
Evercore ISI, led by Julian Emanuel, suggests that the impending IPOs of OpenAI and Anthropic will create a 'make room' effect in investor portfolios. This, coupled with the approaching tax-loss selling season, could lead to investors offloading underperforming stocks to realize losses and reallocate capital into these new, high-profile AI offerings. The identified stocks, including IBM, Tesla, and AppLovin, meet specific criteria for vulnerability, indicating a potential short-term downside as investors rebalance. This presents a risk for holders of these 'struggling' stocks and a potential opportunity for those looking to enter the new AI IPOs.