Should you invest in AI stocks now? Nvidia’s slump, Anthropic’s IPO and 5 strategies to consider

Nvidia shares suffered their steepest weekly decline in more than 18 months, while Anthropic’s proposed IPO drew orders six times the available shares. The contrasting signals suggest investors are becoming more selective about AIQ

The AI trade is sending two very different signals this week!

Nvidia Corp. stock notched its worst week in more than 18 months, as its share price continued to reel after Jensen Huang’s ouster from the top chipmaker. The stock fell 2% to close at $162.85 Friday, extending losses over the last five trading days to 13%, the worst weekly decline since April 2025.

On the other hand, Anthropic PBC's proposed initial public offering (IPO) has attracted six times the orders for the shares available. The company is looking to raise up to $64.4 billion through the public offering, alongside a $26 billion private placement. The combined offering would be bigger than SpaceX's IPO, making it the largest listing of all time.

The contrasting developments raise questions about the sustainability of the AI rally and what investors should consider as the sector enters its next phase.

AI investors are becoming more selective

The developments do not necessarily signal that investors are abandoning artificial intelligence. Instead, they are becoming more selective about where they put their money.

Anthropic's annualised revenue run rate has risen from around $65 billion in July to approximately $81 billion by October. Its first-half revenue reached $16.3 billion, compared with just $1.16 billion in the same period last year. According to Jain, this demonstrates the growing commercial demand for AI products and services.

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At the same time, AI investment cycle is broadening. “Investors are looking beyond chipmakers and infrastructure providers towards companies building AI models, applications and businesses that can generate recurring revenue from the technology.”

Sanchari Ghosh