Panorama 360° : June 2026

Giant IPOs: new challenges for investors · 18 June 2026

Giga-IPOs are not just a market event: they redraw the lines between private and public capital, passive investing, and allocation decisions.

SpaceX’s IPO shattered records, raising $75 billion and valuing the company at nearly $2.1 trillion by the end of its first trading day, making Elon Musk the first trillionaire in history. Anthropic and OpenAI are expected to follow, signalling what could become a historic wave of AI-related IPOs. Why now? First, market conditions remain supportive. Equity markets continue to perform well despite a challenging macroeconomic environment, credit spreads remain tight, and investor appetite for AI-related assets is exceptionally strong. Second, these companies have benefited for years from abundant private financing through private equity and private debt markets. However, their capital requirements are now growing exponentially. Developing the next generation of AI models demands funding on a scale that increasingly exceeds the capacity of private markets. Public markets provide access to deeper pools of capital, more attractive financing conditions, and significantly higher valuations. Concentration: a structural risk that is amplifying. The potential impact on equity indices is substantial. SpaceX, OpenAI and Anthropic alone could add several trillion dollars to US equity markets. AI-related companies already represent a significant share of major indices, with the ten largest AI companies accounting for approximately 40% of the S&P 500. That figure could move closer to 50% as new entrants are gradually incorporated into benchmark indices.

A liability that isn’t so passive The inclusion of these giants in global equity indices raises a fundamental question about the true nature of passive investing. Indices are not natural phenomena. They are constructed through rules, committees, methodologies and, at times, subjective decisions. The SpaceX case illustrates this perfectly. Some index providers modified their methodologies to allow faster inclusion, whereas S&P Dow Jones chose not to alter its rules and maintained the minimum eligibility period. This divergence demonstrates that two passive investors can, in reality, end up with very different portfolio exposures. They may not buy the same stocks, at the same time, or in the same proportions. Passive investing remains one of the most efficient ways to access equity risk premia at low cost, but it should not be mistaken for the absence of investment decisions.

What are the risks? The first concern is valuation. When companies go public at multiples exceeding those of the largest listed technology firms, a considerable share of future value creation has already accrued to private investors. In the best-case scenario, public shareholders still participate in an extraordinary growth story. In the worst-case scenario, they are purchasing an expensive promise whose payoff may take years to materialise. In such circumstances, public investors effectively pay a premium for growth that has already been partially monetised by early shareholders. The second risk lies in index mechanics. Once a stock enters an index, passive funds are obliged to purchase it regardless of valuation. Historically, inclusion announcements have often driven prices higher ahead of the effective entry date. However, this automatic demand can create inflated entry points and unfavourable conditions for investors, particularly during periods of market exuberance. The third risk is cyclical. Large IPO waves tend to emerge when market conditions are exceptionally strong and sellers can command elevated valuations. Historically, major IPO cycles (1999, 2007 and 2021) have often preceded significant market corrections. While this does not imply that every IPO boom marks the end of a bull market, history suggests that such signals should not be ignored. Finally, these transactions reflect a broader shift in market dynamics. For years, large technology companies supported equity markets through aggressive share buyback programmes. Today, AI-related investment needs are encouraging some firms to slow repurchases, increase capital expenditure and, in some cases, issue debt or equity. Markets may therefore transition from an era characterised by shrinking share supply to one defined by increasing capital issuance.

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