SpaceX completes the largest IPO in history at $75 billion; massive IPOs from OpenAI and Anthropic are imminent, and Alphabet plans an $85 billion secondary offering.
JPMorgan estimates that net equity supply will reach $1.5 trillion over the next two years; Goldman Sachs forecasts that net supply will return to zero by 2026. The era of "equity dilution" that supported a two-decade bull market in U.S. stocks has come to an end, and supply shocks may become a significant market headwind.
SpaceX’s record-breaking IPO, the impending mega-IPOs of OpenAI and Anthropic, and Alphabet’s planned $85 billion equity offering— a wave of equity financing on par with the dot-com bubble is sweeping through U.S. capital markets. A key structural driver behind the U.S. stock market’s two-decade bull run is quietly unraveling.
On June 15, Bloomberg reported that JPMorgan’s calculations show that, after accounting for buybacks, IPOs, follow-on offerings, and other equity issuances over the next two years will net approximately $1.5 trillion in new supply to the U.S. stock market—the strongest net equity issuance cycle since the late 1990s.
Meanwhile, Goldman Sachs research shows that net equity supply in the U.S. stock market may return to near zero by 2026—a level not seen since 2003, when it had been persistently negative and served as one of the most important structural supports for U.S. equities over the past two decades.
The core logic behind this shift is that the massive capital demands driven by the AI arms race are forcing companies to move from "repurchasing shares and reducing outstanding shares" to "issuing equity on a large scale and raising funds from the public."
The era once dubbed "equity QE" has come to an end, and a new era of "re-equitization" is beginning. This means that long-neglected supply-side variables will once again become key factors influencing market trends.
Twenty years of "de-equitization": Wall Street’s longest-running tailwind comes to an abrupt end
Over the past nearly two decades, the U.S. stock market has exhibited a distinct structural characteristic: a sustained contraction in stock supply. S&P 500 companies have collectively retired nearly $12 trillion in market capitalization through buybacks alone. Corporations as a whole have acted as the market’s largest buyers, while a large number of high-quality companies have chosen to remain private over the long term, further reducing the pool of investable assets in public markets.
Robert Buckland, former Citi strategist and the originator of the concept of "de-equitization," has compared this phenomenon to "quantitative easing for the stock market." He notes that companies' ongoing reduction in the number of outstanding shares has been a persistent factor providing systemic support to stock prices over the past two decades.
However, this logic is being completely overturned by the AI wave. According to Citi data, the net buyback volume by hyperscalers declined last year. Vincent Deluard, Global Macro Strategist at StoneX Financial, describes this shift as a three-stage evolution:
Initially relied on profits and free cash flow, then began taking on debt, and now is fully utilizing—cash flow, debt, and equity—all are being used.
Goldman Sachs research shows that net equity supply in the U.S. stock market may return to near zero in 2026 after more than two decades of negative values. Bespoke Investment Group macro strategist George Pearkes characterized this as "late-cycle behavior" and bluntly stated, "From this perspective, it’s a fairly negative indicator."
Super IPO Wave: SpaceX Leads the Way, Followed by OpenAI and Anthropic
Last week, SpaceX completed the largest IPO in history, raising $75 billion and surging 19% on its first day of trading. This is just the beginning.
According to reports, approximately 160 companies have announced IPOs raising over $120 billion this year, surpassing the total for the past two years combined. Including secondary offerings by existing public companies, new equity supply in the first half of this year has exceeded $360 billion, the highest level for the same period in five years.
Massive IPOs from OpenAI and Anthropic are expected to follow one another in the coming months. According to Ned Davis Research, SpaceX, OpenAI, and Anthropic combined could raise over $170 billion in the short term.
Notably, all three companies initially issued a very small percentage of shares—SpaceX sold less than 5% of its equity, below the typical IPO range of 15% to 20%. Once the lock-up period expires and more shares enter circulation, the market will face a larger supply shock.
Ned Davis Research estimates that even a small portion of equity from just these three companies, if brought to the public market, would be sufficient to offset the entire year's buyback volume of S&P 500 constituents.
Blackstone President Jon Gray said that the IPOs of SpaceX, Anthropic, and OpenAI mark the IPO market as having "truly found its footing," and revealed that Blackstone has already taken three portfolio companies public this year, with seven more in preparation.
Alphabet leads the offering: Tech giant transforms from "biggest buyer" to "biggest seller"
Alongside the IPO boom is a surge in large-scale secondary offerings by established tech giants.
Alphabet is the most representative example. Once the largest repurchaser of its own stock, the parent company of Google is now raising substantial debt in markets such as the U.S. and Japan to fund its AI expansion—and is further planning a massive equity issuance of up to $85 billion, potentially becoming one of the largest in history. Companies like Meta are also evaluating equity financing to support their AI spending plans.
The logic behind this shift lies in the change in relative financing costs. The current S&P 500 price-to-earnings ratio is approximately 25 times, a level rarely seen this century, indicating that the cost of equity financing has become cheaper relative to debt financing.
Since the Federal Reserve raised interest rates to their highest level in two decades in 2023, the advantage of stock yields (the inverse of the P/E ratio) over bond yields has continued to widen, and this dynamic has not fundamentally changed even after the Fed began cutting rates. John Luke Tyner, portfolio manager at Aptus Capital Advisors, stated plainly:
It seems that many people are using the market to raise funds, and they are likely doing so not because they believe their shares are undervalued.
Who will take over? Retail investors and money market funds have become key variables.
Faced with massive supply, the market’s core question is: who will buy?
Optimism remains dominant. According to Bloomberg, retail trading volume currently accounts for about one-fifth of total U.S. stock trading volume, doubling since 2010. SpaceX has allocated up to 20% of its IPO shares to individual investors, above the typical level.
Man Group’s Chief Market Strategist, Kristina Hooper, summarized current market sentiment as “FOMO (fear of missing out) coexisting with fear, but FOMO usually prevails.”
The massive $7.9 trillion in assets under management in money market funds is also seen as a potential source of incoming capital. Investors note that it remains unclear when this surge of equity and debt issuance will begin to overwhelm the market.
However, the concentration of demand has raised concerns among some market participants. Jim Bianco, President of Bianco Research, noted:
In the AI sector, there is limitless investor appetite and unlimited willingness to raise capital, but beyond this, most other companies are essentially standing still.
Kevin Foley, Co-Head of Global Investment Banking at J.P. Morgan, also acknowledged that current capital markets activity is "quite concentrated" and warned that "the world is changing rapidly, and risks remain unresolved."
Historically, large-scale equity offerings have often coincided with major investment booms, as seen with railroads, canals, and telecommunications networks. But history also shows that such waves often end in bubbles.
Noah Weisberger, Chief U.S. Equity Strategist at BCA Research, found through an analysis of 40 years of market history and approximately 12,000 IPOs that, in the 12 months following large IPOs, the S&P 500 tends to underperform compared to other periods, with a median gain of only 8% and negative returns occurring in about 20% of cases.
An extremely large wave of IPOs is coming, which will only heighten concerns—these are not small offerings that the market can easily absorb; they could become significant headwinds for the market.
Charles Lemonides, founder of ValueWorks Hedge Fund, has compared the current situation to the late 1920s and the 1990s, when waves of innovation fueled speculative stocks and massive fundraising: “During the upward surge, companies competed to raise money, and investors competed to give it, because it was a gold rush and everyone wanted to take part.”
Robert Buckland bluntly stated that he has been waiting for the moment when equity supply truly begins to increase, as a signal to counter this bull market. “Now, it’s really starting to pick up.”
Inigo Fraser Jenkins, Co-Head of Institutional Solutions at AllianceBernstein, holds a relatively moderate stance, viewing the rise in equity issuance as one of several risk factors that dampen future returns and increase volatility, rather than as a watershed moment fundamentally altering the market landscape. “It somewhat narrows the path to success.”