Introduction

Artificial intelligence (AI) is a branch of computer science that focuses on the development of intelligent machines and algorithms. AI’s primary goal is to create systems that can think and act like humans by understanding and responding to complex data sets. AI technology has been used in a variety of industries, including healthcare, finance, retail, and transportation, to increase efficiency and accuracy. In recent years, AI companies have begun to launch initial public offerings (IPOs). An IPO is when a private company sells shares of its stock to the public for the first time, allowing investors to purchase a stake in the company. This article will explore what year did AI open their IPO, analyzing the factors driving AI IPOs, evaluating the performance of AI stocks post-IPO, and discussing how AI companies are valued at the time of their IPOs.

A Timeline of AI IPOs from the Past 10 Years
A Timeline of AI IPOs from the Past 10 Years

A Timeline of AI IPOs from the Past 10 Years

The first AI IPO took place in 2010, when the Chinese facial recognition company Megvii Technology launched an IPO on the Hong Kong Stock Exchange. Since then, several other AI companies have gone public, including SenseTime Group Ltd. in 2017, Appier Inc. in 2019, and C3.ai Inc. in 2020. According to research conducted by Goldman Sachs, the number of AI IPOs has increased significantly over the past decade, with nearly 50 AI companies going public since 2010.

What to Expect from an AI IPO
What to Expect from an AI IPO

What to Expect from an AI IPO

When considering investing in an AI IPO, investors should be aware of the factors driving AI IPOs. Generally, AI companies go public in order to raise capital to fund growth and expansion. Additionally, AI companies may go public to increase visibility and attract potential customers or partners. It is important for investors to understand the risks associated with investing in an AI IPO, as these companies may not have a proven track record of success.

When evaluating the performance of AI stocks post-IPO, investors should consider the company’s share price performance and market capitalization. For example, Appier Inc.’s share price rose more than 200% after its IPO in 2019, while C3.ai Inc.’s share price rose more than 100% following its IPO in 2020. Additionally, investors should take into account the company’s financial performance, such as revenue and earnings growth, in order to determine if the company is on track to meet its long-term goals.

How AI Companies Are Valued at the Time of Their IPOs

When valuing an AI company at the time of its IPO, investors should understand the valuation metrics used by investment bankers. Generally, investment bankers use a combination of discounted cash flow (DCF), comparable company analysis (CCA), and precedent transaction analysis (PTA) to determine a company’s value. DCF is a method of valuing a company based on its projected future cash flows. CCA is a method of valuing a company based on the multiples of similar companies in the same sector. PTA is a method of valuing a company based on the prices of previous acquisitions.

It is also important to consider the impact of AI IPOs on the technology sector. AI companies are often considered “unicorns,” meaning they have achieved a valuation of $1 billion or more prior to going public. By going public, AI companies can bring additional liquidity to the market, which can help to bolster investor confidence in the sector. Additionally, AI IPOs can provide a boost to the technology sector by increasing the number of publicly traded companies and providing additional capital for technology investments.

Conclusion

In conclusion, AI IPOs have become increasingly popular over the past decade. Investors should understand the factors driving AI IPOs, evaluate the performance of AI stocks post-IPO, and understand how AI companies are valued at the time of their IPOs. Additionally, AI IPOs can provide a boost to the technology sector by increasing the number of publicly traded companies and providing additional capital for technology investments.

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By Happy Sharer

Hi, I'm Happy Sharer and I love sharing interesting and useful knowledge with others. I have a passion for learning and enjoy explaining complex concepts in a simple way.

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