Evercore ISI Warns AI IPOs Could Pressure IBM and AppLovin

Investors chasing a potential blockbuster AI flotation might sell something they already own to fund it — this portfolio dynamic is what Evercore ISI's warning, reported September 7, captures. The firm's screen identified underperformers with negative earnings-revision trends that could face pressure from both possible OpenAI and Anthropic listings and seasonal tax-loss selling.

For IBM, the challenge is restoring operating momentum after mixed Q2 results. Software revenue grew 5% to $7.8 billion with Red Hat up 11%, and hybrid cloud remains a plausible growth path as enterprises deploy AI on existing systems. But infrastructure revenue fell 7% with IBM Z down 42%, creating doubt about execution before any additional selloff arrives.

AppLovin's different tension lies in sustaining strong results in a competitive advertising market. Its June-quarter revenue rose 53% to $1.924 billion with substantial cash generation, which could support resilience even if enthusiasm shifts toward newly listed AI developers. The screen's value is cautionary rather than predictive — Q2 filings showed no broad retreat, with IBM holders actually increasing from 59 to 74. The stakes hinge on whether these firms can improve operating performance independent of AI-IPO dynamics.