There are some enormous initial public offerings (IPOs) lining up this year, and already there’s no shortage of opinions about what it all means.
SpaceX could be out as soon as this quarter. OpenAI looks like it’s also coming in 2026. And Anthropic might not be far behind.
We’re not talking about big deals by normal standards. We’re talking about companies that could come public at valuations north of $1 trillion, in some cases well north of that.
We’ve never dealt with anything like this before. So the real question is simple.
Is this a liquidity event that sucks money out of everything else and leaves indexers and public market investors holding the bag? Or is this the kind of wealth-creation event that ends up fueling demand for other stocks too?
I’ve been around plenty of IPOs, especially earlier in my career when they mattered a lot more to how people thought about the market. But this is a different animal.
And when I run this by the smartest people I know, the ones who usually have a strong take one way or the other, I keep getting the same answer: Nobody really knows.
That’s what makes this so interesting.
When the people who live and breathe this stuff don’t have a clean answer, the only thing left to do is think it through logically and do the math. That’s really all we can do here.
So let’s start there.
Putting These IPOs in Perspective
If you want to understand what’s coming, you have to zoom out and look at the closest comps we’ve actually lived through.
The biggest IPO most people remember is Facebook in 2012. The company now known as Meta Platforms (META) went public with a valuation around $80 billion.
We owned a big piece of that one, so I got to watch it up close. And it was ugly. The stock got cut in half within a few months. Total mess out of the gate.
Of course, that wasn’t the end of the story. META eventually grew into a trillion-dollar company. But anyone who bought the IPO and expected a straight line higher learned the hard way that supply matters.
Alibaba (BABA) in 2014 was even bigger, around $170 billion. Different setup, same lesson. It held together a little better early on, but not for long. That stock got cut in half too before eventually recovering and pushing to new highs.
So when people talk about these massive IPOs, history actually gives us a pretty clear playbook. Big supply tends to overwhelm demand in the short term. Prices adjust. Time passes. Then the real trend emerges.
But here’s the problem with using those as comps. They’re not even close to what we’re talking about now.
Enron back in the 1990s, when Amazon, Netscape, Ebay, and Yahoo debuted, they were small relative to the size of the market.
Even the biggest deals barely registered. The total stock market was already in the tens of trillions. A few billion-dollar IPOs didn’t move the needle.
Today is different. These new issues could come out at 1 to 2% of the entire market right out of the gate.
That’s not background noise. That’s a market event. To find anything comparable, you have to go way back.
U.S. Steel in 1901 is probably the closest extreme. That company represented a massive chunk of the entire stock market at the time. And it showed up late during a market bubble that didn’t have much left in it.
But that’s a stretch as a comparison. It was a different market structure back then. There were different players involved. It was a completely different world.
The Ford IPO in 1956 is probably the better analog. That deal came out around 1 to 2% of the total market, which is right in line with what we’re looking at today.
And just like U.S. Steel, it hit the tape toward the later stages of a strong run in stocks. The market didn’t collapse. But it did stall. It took time to absorb all that supply before it could move higher again two years later.
That’s the setup.
So now we’re staring at something that looks familiar in some ways, but bigger than anything we’ve ever seen. The numbers are larger. The flows are faster. The players are different.
Which brings us to the only question that really matters.
Is this going to be a supply shock that weighs on everything else?
Or is it something else entirely?
Excess Supply vs New Liquidity
This is the only question that matters.
Are these IPOs going to drain liquidity from the rest of the market? Or are they going to create so much new wealth that it ends up lifting everything else with it?
The bearish case is easy to understand. IPOs today aren’t really about raising capital to grow a business. Private markets already took care of that. These are exit ramps. Early investors getting paid.
And if these companies come out at 1 to 2% of the S&P 500, or even more in the Nasdaq, then all that passive money has no choice. It has to buy.
Retirement accounts, index funds, systematic flows. They all become forced buyers at the same time insiders are becoming sellers.
That’s a lot of supply hitting the tape. But that’s only half the equation.
The other side is what happens after that liquidity event. Because we’re not talking about a few billion dollars changing hands. We’re talking about trillions. Wealth that didn’t exist in public markets yesterday suddenly does.
And that money has to go somewhere.
The pushback I hear is that this stays in private markets. That venture capital just recycles into the next batch of startups.
Maybe some of it does. But all of it? That would mean absorbing over a thousand unicorns at once. That’s not realistic.
There aren’t enough private deals. There isn’t enough capacity.
So the overflow finds its way into public markets. And more specifically, into the parts of the market these investors already understand.
Technology.
Not necessarily just the mega caps that everyone already owns. The smaller names, too. The niche players.
The companies flying under the radar where the valuations still look “cheap” if you’re coming from private market multiples.
Here’s the part people miss. They don’t even have to sell to do this. They can borrow against those positions, unlock liquidity, and redeploy it immediately.
That’s how this turns from a supply story into a demand story.
On balance, I think this is a tailwind. Not for the IPOs themselves. Those can chop around, maybe even get hit early just like we’ve seen before. But for everything around them.
That’s where the opportunity is.
I know how these investors think. I’ve seen this movie before. The capital doesn’t sit still. It looks for the next idea.
Now, could I be wrong? Of course. The truth is nobody knows exactly how this plays out. Not me. Not the smartest people I talk to.
But when I run through the math, when I look at the history, when I think about how money actually moves, this isn’t something I want to be afraid of.
It’s something I want to be positioned for.
Because if we’re right, the biggest winners won’t be the companies going public.
It’ll be everything else they go out and buy.
The truth is, I don’t actually know what will happen. Neither do the smartest people I talk to.
But when I walk through the history, when I do the math, and when I think about how money actually moves, this isn’t something I want to be afraid of.
It’s something I want to be positioned for.
Because if we’re right, the biggest winners won’t be the companies going public.
It’ll be everything else they go out and buy. And that’s exactly what we’re focused on.
We’re applying our NOW Scores across technology to identify where this new liquidity is actually showing up. Not where people think it should go. Where it’s actually going.
If this IPO wave is going to create winners, they’re already starting to emerge.
We’re tracking them in real time.
Stay tuned.
This Week in Everybody’s Wrong
On Monday, we defined what it means to have the will to own winners.
Most people hear “buy the dip” and immediately look for whatever just got hit the hardest.
But the opportunity is in buying weakness in strength.
On Tuesday, we asked whether you’re surprised stocks haven’t moved even lower than they already have.
Headlines say everything is breaking down all at the same time.
The tape isn’t confirming it, though, and the next move might be higher.
On Wednesday, we zoomed out with a bunch of monthly and quarterly candlesticks.
Going chart by chart, looking for trends and divergences, and letting price tell the story is the biggest part of our process.
One big thing about risk appetite stood out when we did it this week.
On Thursday, we thanked short sellers for the essential service they provide us.
If you’re trying to make money in the market, you should be grateful they exist.
In fact, the more guaranteed future buyers we see the happier we are.
On Friday, we told you that you’re following the wrong technology stocks.
Maybe a handful of mega caps is selling off.
Did you know small-cap technology stocks just put together a four-week winning streak?
On Saturday, Sam Gatlin returned to break down a big moment for global markets.
The war in the Middle East is a major event for crude oil and energy.
But the inflation Genie was already out of the bottle.
Have a great Sunday.
We’ll see you Monday morning…
Stay sharp,
JC Parets, CMT
Founder, TrendLabs