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Rolls-Royce (LSE: RR.) shares are probably the most popular growth investment in the UK. Week in, week out, investors pile into them due to the company’s growth potential in areas such as defence, nuclear energy, and data centres.
The question is – do the shares have more potential over the next year than shares in AI powerhouse Anthropic (which is expected to IPO this month)? Let’s discuss.
Anthropic is growing far faster
At first glance, Anthropic appears to have far more investment potential. Because the AI company is literally growing at an unprecedented rate.
In the first half of 2026, its revenues rose 1,300% year on year to $16.3bn. By contrast, Rolls-Royce’s revenues only grew 25% to £11.3bn over the period.
But there are valuation risks
However, digging deeper, the outlook for Anthropic shares post-IPO becomes less clear. For a start, it’s coming to the market at a sky-high valuation of somewhere around $1.5trn to $2trn.
That price tag doesn’t leave any room at all for a growth slowdown or operational setback. It’s so high that it could fall even without a slowdown or setback.
And IPO stocks can tank
Second, history shows that hyped-up IPO stocks tend to tank once the IPO hype wears off. We’ve seen this happen with both SpaceX and Cerebras this year.
Other stocks that have followed this pattern in recent years include Snowflake, Airbnb, and Rivian. So, it wouldn’t surprise me if Anthropic shares fell after an initial IPO spike.
Rolls-Royce also faces valuation risks
Turning to Rolls-Royce, it also faces some valuation compression risks. Because it’s not exactly cheap.
It’s currently trading on a forward-looking price-to-earnings (P/E) ratio of about 30 and that earnings multiple doesn’t leave a lot of room for error. For example, if the company was to tell investors that it’s seeing a slowdown in the civil aerospace industry due to high oil prices, or less demand for data centre power, its share price could fall sharply.
But I reckon there’s less chance of a massive share price collapse here. I also think that Rolls-Royce is the more likely of the two stocks to climb steadily over the next year given that its earnings are forecast to rise about 16% in 2027.
It’s worth pointing out that the average analyst price target for Rolls-Royce is around 40% above the current share price. I’d be very surprised if analysts come out with price targets for Anthropic that are that far above its huge IPO market cap.
My call
Weighing everything up, my view is that Rolls-Royce shares actually have more potential over the next 12 months. That might sound crazy, but to my mind they’re more likely to produce solid gains.
That said, both stocks could be worth considering. Because both have plenty of long-term potential.
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Edward Sheldon owns shares in Rolls-Royce, Snowflake, and SpaceX.
This story originally appeared on Motley Fool
