SpaceX and Anthropic mega-IPOs could mark end of bull run, Bank of America suggests
The SpaceX and Anthropic mega-IPOs may not be the boon to the stock market investors think they’ll be. Wall Street has been rolling out the red carpet for some of the most eagerly anticipated public debuts in recent memory — helped along by the Trump administration’s initiative to deregulate public and private markets to “make IPOs great again” — with index providers changing their rules for faster inclusion and rejiggering the math on free float multiples. But those accommodations “smack of late-stage machinations” that could signal the end of the stock market’s bull run, Bank of America suggested. The late stage of the investment cycle refers to the highly speculative period in which amateur buyers bid up securities, quietly offloaded by institutional investors, that precedes a downturn. The massive IPOs could also flood the market with shares, which could actually hurt prices, according to the firm’s equity and quant strategist Savita Subramanian. The shrinking number of shares in the investable universe has been one of the pillars of recent bull markets. The number of publicly traded securities dropped to roughly 4,000 last year from a peak of more than 8,000 back in the 1990s, according to the Center for Research in Security Prices. “Say goodbye to the ‘equity shrinkage’ bull case: since the early 2000s, a confluence of factors systematically reduced available public equity year after year – more buybacks, longer private incubations, more take privates, low rates, ample liquidity, etc.,” Subramanian wrote. “Today, an issuance deluge may be imminent.” That influx of shares could fundamentally alter the stock market, which is already at all-time highs thanks to a small cohort of high-flying stocks . After the breadth expansion that marked the first part of 2026, the recent rally has more to do with strong earnings growth from the “Magnificent Seven,” which accounts for roughly one-third of the S & P 500 . While the S & P 500 soared more than 10% in April, the equal-weighted index was higher by just 6% last month. But the public debuts of SpaceX and other companies could add pressure to the Magnificent Seven, given that investors rushing to make space for the IPOs will have to offload existing holdings. Roughly 60% of U.S.-domiciled assets are passive managed, and are heavily skewed toward megacap tech, Subramanian noted. Retirees, who hold $8 trillion in cash balances, are also more likely to add exposure to equity income than buy more to long duration growth stocks, the strategist said. “This implies, all else equal, passive funds will be forced to free up capital for new issues, creating downward pressure on existing holdings,” Subramanian wrote. SpaceX, expected to go public as soon as June, is seeking a valuation of more than $2 trillion, according to Bloomberg News . Anthropic, which could IPO in October, could be valued at more than $900 billion after its latest funding round, the news outlet also reported.
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