Why Yardeni Isn’t Worried About The AI-3 IPO Wave<\/p>\n
Yardeni called SpaceX, Anthropic, and OpenAI the “AI-3” and noted that the trio could eventually command between $4 trillion and $5 trillion in combined market cap. SpaceX is expected to lead the group, with plans to raise between $75 billion and $80 billion at a valuation of up to $1.8 trillion in potentially the largest offering ever.\u00a0<\/p>\n
SpaceX is expected to begin its roadshow this week ahead of a potential Nasdaq debut as soon as June 12. Anthropic took a major step forward on Monday by confidentially filing IPO paperwork with the SEC. The Claude developer recently reported a $47 billion revenue run rate and was valued at $965 billion in a recent funding round.<\/p>\n
Meanwhile, OpenAI has yet to file publicly. However, CEO Sam Altman\u00a0downplayed<\/a> suggestions that the company is racing Anthropic to public markets: “I think there is a race to deliver the best technology and build the best business, but going public is a financing event,” Altman said, according to CNBC.<\/p>\n Despite the scale of the offerings, Yardeni dismissed concerns that the IPOs could drain liquidity from the broader market: “Fears are mounting that the AI-3 IPOs will suck the oxygen out of the rest of the stock market. We aren’t as concerned,” the firm said.<\/p>\n The research firm noted that the AI-3 are expected to raise $200 billion combined, compared with a Wilshire 5000 market cap of $75.6 trillion and an S&P 500 market value nearing $60 trillion. Yardeni also pointed out that U.S. markets absorbed $232 billion of new equity issuance over the past 12 months and more than $450 billion in 2021.<\/p>\n SpaceX’s Tiny Float Problem<\/p>\n Rather than a marketwide liquidity issue, Yardeni believes SpaceX’s unusually small float could create a supply-demand imbalance. According to the firm, SpaceX plans to float only about 4.3% of its shares at the IPO, while Anthropic and OpenAI are also expected to come public with relatively limited floats. “The AI-3 won’t be in the same league” as the Magnificent Seven initially despite their headline valuations, Yardeni said, since so few shares will be available for public trading.<\/p>\n The firm highlighted ongoing changes among index providers that could accelerate demand for newly public mega-cap companies. S&P Dow Jones is considering reducing the S&P 500’s seasoning requirement from 12 months to six months and potentially waiving long-standing profitability requirements, while Nasdaq recently shortened its inclusion window from 90 trading days to 15.<\/p>\n Citing Bloomberg Intelligence estimates, Yardeni said S&P 500 funds could absorb 19% of SpaceX’s public float within six months, while Nasdaq-100 and Russell 1000 funds could absorb another 24%. Given that only about 4.3% of SpaceX shares are expected to be publicly available at the IPO, the firm pointed to a supply-demand imbalance. “This is forced buying colliding with a very limited supply,” Yardeni said.\u00a0<\/p>\n Retail Investors Join The IPO Rush<\/p>\n Yardeni also expects strong retail participation in the AI-3 offerings. The firm noted that 62% of U.S. adults already own stocks, while individual retirement account (IRA) assets likely exceed $20 trillion. Household equity ownership also remains near record levels.\u00a0<\/p>\n “We have already personally received emails from our brokers inviting us to participate in the SpaceX IPO,” Yardeni said.<\/p>\n How Do Retail Traders Feel About Broader Markets And The Mega IPOs?<\/p>\n On Stocktwits, SPCX, OPENAI and ANTHROPIC had ‘bullish’ to ‘extremely bullish’ retail sentiment, with SPCX attracting ‘extremely high’ message volumes, and OPENAI and ANTHROPIC drawing ‘high’ chatter. Meanwhile, SPY remained ‘bullish’ and QQQ ‘neutral’, with both ETFs seeing ‘normal’ message volume.\u00a0<\/p>\n One user\u00a0said<\/a>, \u201cDo you all think they will crash the market with biggest IPO in the world coming next week, that’s bloody 1.8-2T… I think they will do everything to keep this market up\u201d<\/p>\n Another user\u00a0speculated<\/a>, \u201c$ANTHROPIC Likely to split pre-IPO like SpaceX to be more palatable to the retail market\u201d<\/p>\n While SPY has risen 30% over the past year, QQQ has gained 44% over the same period.\u00a0<\/p>\n For updates and corrections, email newsroom[at]stocktwits[dot]com.<\/p>\n Read Next:\u00a0ASTS, RKLB, SIDU, RDW Reverse Losses As Blue Origin CEO Vows New Glenn Return This Year \u2014 Retail Fears Ease\u00a0<\/a><\/p>\n
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