Rarely in recent memory has a single listing carried this much narrative weight. SpaceX is heading to the public markets at a valuation of $1.75trillion, bringing with it a heady combination of space technology, artificial intelligence, Elon Musk, and the kind of eye-watering numbers that make investors nervous and excited in equal measure. And in the past week, it has been joined in the queue with both Anthropic and OpenAI filing confidentially with the SEC for an IPO, having raised money in the private markets at $965b and $825b respectively. All three would end up being larger than any IPO ever recorded by all measures.
For those of us tasked with making rational investment decisions in increasingly frenzied conditions, this wave raises some genuinely important questions.
Let's start with what everyone is thinking but few may want to say plainly. The valuation being ascribed to SpaceX is, by any conventional measure, extraordinary. There are currently only 13 publicly listed companies worth more than $1 trillion. SpaceX would arrive at a multiple well above what comparable businesses trade at today, and the mental gymnastics required to justify that number on fundamentals alone are considerable.
Anthropic and OpenAI don't make that calculus simpler. The growth rates are phenomenal with Anthropic’s annual revenue run-rate reaching $47b in May 2026, up from $10 billion in January, a trajectory that has no historical precedent. OpenAI generated an estimated $13 billion in annual recurring revenues in 2025 which is likely to at least double in 2026 but at a high cost with internal projections pointing to a $14 billion operating loss in 2026. These are businesses growing at remarkable speed and losing money at remarkable speed simultaneously. That combination has historically been a test of market patience, albeit provided growth at scale continues, future profits are expected. Question though is whether the valuations make sense.
The Tesla comparison to SpaceX though is worth considering. Tesla has, for years, defied the gravity of its own delivery record relative to its Magnificent 7 peers, and yet its valuation has remained at a premium, partly due to elevated retail participation. Given Elon Musk is the key figure in both, it may be that this dynamic will apply to SpaceX too. It doesn't make it intellectually satisfying for a fundamental investor, but it is the market environment in which we are operating.
Perhaps more consequential than the valuations themselves are what these listings will do to market mechanics. Index providers have been scrambling to update their rules ahead of what could be the largest concentration of capital ever brought to market simultaneously. Nasdaq has revised its eligibility framework to admit new mega-cap listings to the Nasdaq-100 after as little as 15 trading days, and FTSE Russell has moved similarly. For trackers of those indices, the passive feedback loop is real and imminent: passive buying drives up the price, that performance pressures active managers to follow, which begets more passive buying, largely independent of whether the underlying fundamentals justify it.
But S&P Dow Jones Indices drew a harder line. On 4 June it rejected a proposal to fast-track SpaceX, Anthropic, and OpenAI into the S&P 500, keeping its 12-month seasoning requirement and profitability hurdle firmly in place. None of the three companies is currently profitable. SpaceX will not be eligible for S&P 500 inclusion until at least mid-2027. The decision removes (at least for now) the forced buying of Space X from the largest pool of passive capital, that tracks the S&P 500.
What makes the broader dynamic uncomfortable, however, is the position it puts certain investors in regardless. Large asset allocators who hold significant passive exposure would be forced buyers due to fast-track index rule changes, despite SpaceX not meeting many of their minimum governance practices.
There is a pointed observation doing the rounds: a lot of active managers will end up buying into these listings not out of conviction, but for index-hugging reasons. Buying for all the wrong reasons, in other words.
It is a fair charge. If these businesses maintain their market capitalization, they will in time become material in major benchmarks. In this event, benchmark risk, not investment fundamentals, will be driving the decision. That is not what active management is supposed to be.
Our approach is to go back to first principles: evaluate each business on its own merits, bottom-up, and make decisions based on what we believe is in the best long-term interest of our clients. SpaceX, Anthropic, and OpenAI are three genuinely different businesses with different models, different risks, and different financial profiles. Grouping them together simply because they share a trillion-dollar valuation and an AI narrative is not analysis. It is noise.
No discussion of this IPO wave would be complete without asking whether it signals the peak of the AI cycle. The naysayers are already making dot-com comparisons, and the simultaneous filing of Anthropic and OpenAI has only amplified that conversation.
In our view, both camps are being too binary. If this is the beginning of the end of an AI bubble, history suggests we still have some distance to travel. Netscape IPO'd in 1995. The dot-com bubble didn't burst until 2001. Six years of strong market performance followed what was, in hindsight, the opening act of an era-defining technological shift. That doesn't mean the same will happen with AI. But it does mean that declaring a top simply because large listings are appearing is not, on its own, sufficient evidence.
For us, the approach remains the same regardless of the noise: evaluate the fundamentals, weigh the flow dynamics that are increasingly impossible to ignore in the US market, and make decisions in the best interests of our clients. These are not easy calls. But they are exactly the kind of calls active management exists to make.
