Market Commentary: 2026 Q2

Three Trillion-Dollar IPOs Are Coming

Three of the most anticipated public offerings in history are arriving nearly at once. SpaceX filed with the SEC in April and is targeting a $1.75 trillion valuation, which is more than double the largest IPO ever recorded. Anthropic and OpenAI are each eyeing late 2026 listings at valuations approaching $1 trillion apiece. Together, they would add at least $3.5 trillion to public markets in a matter of months. Stock indexes are already changing their rules to absorb them: Nasdaq just approved a “fast entry” provision that lets a newly public company join the index within two weeks instead of three months. The S&P 500 and other major indexes are considering similar changes. In short, the plumbing of passive investing is being redesigned around these three companies before they’ve sold a single public share. Remember, IPOs don’t create new money, but instead claim a share of the capital that investors, in aggregate, have already allocated to the market.

What passive investors actually receive, however, may look quite different from the headlines. SpaceX plans to sell only a small slice of the company (perhaps 3 to 8 percent) which limits how much weight it carries in any index fund. Anthropic and OpenAI aren’t profitable yet, and the S&P 500 currently requires four consecutive quarters of earnings to qualify for inclusion. Rules may bend, as they already have at Nasdaq, but the timing is uncertain. What is more certain is that these additions will make the concentration risk present in indices even worse. The ten largest S&P 500 companies already account for 36% of the index, and all of them are tied to AI in one way or another. Adding three more AI giants would push that figure well above 40%. If you own an index fund, you may think you own “the market”, but increasingly, you own a large and growing bet on one theme.

That brings us to the most important question: how much upside is actually left for public investors? When Google went public in 2004, it was worth $23 billion. Facebook listed in 2012 at $104 billion. Both companies were early in their growth, and patient public investors were richly rewarded. SpaceX, Anthropic, and OpenAI are arriving in a very different condition. Years of private fundraising have already pushed their valuations into the trillions, transferring most of the early-stage gains to venture capitalists, sovereign wealth funds, and other institutional investors. Public investors won’t be getting in early. They’ll be buying companies already priced for greatness, before those companies have turned a profit. That’s not necessarily a reason to avoid them, but it is a reason to ask what, exactly, is being priced in. At Magnifina, we believe the most durable returns come from buying companies on their own merits, not because an index fund decided to include them.