- JPMorgan projects $1.5 trillion in net new equity supply over the next two years — the strongest wave since the late 1990s — driven by SpaceX, OpenAI, Anthropic, and Alphabet’s planned $85 billion share sale.
- SpaceX debuted its $75 billion IPO with a 19% first-day jump, though Fox shares tumbled as retail investors now account for 20% of total US stock volume, amplifying both momentum and volatility.
- Companies are selling equity because it’s cheaper than debt at current valuations of ~25x earnings; the S&P 500 hyperscaler index is down 2.6% year-to-date despite the IPO euphoria.
- Historical data from BCA Research warns that large IPO waves have preceded weak market returns — median S&P 500 gain of just 8% afterward, with negative returns 20% of the time.
What Happened?
Wall Street is entering what could be the biggest equity supply surge in a generation. JPMorgan estimates that $1.5 trillion in net new stock will hit markets over the next two years, fueled by a queue of landmark listings: SpaceX completed its $75 billion IPO last week — the world’s largest ever — jumping 19% on debut. OpenAI and Anthropic mega-IPOs are expected to follow. Meanwhile, Alphabet has announced plans to sell $85 billion in new shares. Retail investors, who now represent 20% of total US stock trading volume, are helping drive the frenzy, snapping up shares in companies that were private for years.
Why It Matters?
For years, the defining feature of the stock market was scarcity — the biggest, most exciting companies stayed private, while buybacks shrank the float of public ones. That dynamic supercharged returns for index investors. A $1.5 trillion supply wave flips the equation. Companies are choosing to sell equity now because at ~25x earnings, issuing stock is cheaper than borrowing. But more supply means more competition for investor dollars. The S&P 500 hyperscaler index is already down 2.6% year-to-date, suggesting the market is not universally celebrating the IPO wave. There’s also a lockup risk: SpaceX only floated about 4.2% of its shares; when lockup periods expire, trillions in additional stock could hit the market.
What’s Next?
OpenAI’s IPO is the most anticipated listing on the horizon, with Anthropic expected to follow. Whether markets can absorb that volume without meaningful price pressure is the central question. BCA Research’s historical analysis is sobering: in prior periods of surging IPO supply, the S&P 500 delivered a median return of just 8%, with negative outcomes in one out of five cases. Retail participation adds another wildcard — enthusiasm can turn to selling pressure quickly. The next 18 months will be a stress test of whether the market’s appetite for new equity matches the ambitions of Silicon Valley’s biggest private companies finally going public.
Source: Bloomberg
