Super IPOs and super additional offerings keep coming! Amid massive financing, one of the "core highlights" of the US stock market is already gone.

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SpaceX’s record-setting IPO, OpenAI and Anthropic preparing massive IPOs, Alphabet planning an $85 billion new share issuance—a wave of equity financing comparable in scale to the era of the internet bubble is sweeping through the US capital market. The key structural driver that has supported the US stock market's two decades of bull run is quietly unraveling.

On June 15, Bloomberg reported citing JPMorgan estimates that over the next two years, IPOs, new share issuances, and other stock offerings will inject roughly $1.5 trillion in net supply into the US stock market after deducting buybacks, marking the strongest net equity issuance cycle, at least since the late 1990s. Meanwhile, Goldman Sachs research shows that US stock market net equity supply may return to around zero in 2026, after staying negative since 2003—a key structural support for US stocks over the past two decades.

The core logic behind this change is: The enormous capital demand spawned by the AI arms race is forcing companies to shift from “buying back shares and shrinking the float” to “large-scale equity issuance, fundraising from the public.” The era of de-equitization, once called “stock market QE,” has ended, and a new era of re-equitization is beginning. This means the long-overlooked supply variables will once again become key factors shaping market trends.

Two decades of “de-equitization”: US stocks’ greatest tailwind comes to an abrupt halt

For nearly twenty years, the US stock market had a distinct structural feature: shrinking equity supply. S&P 500 component firms, solely through buybacks, have cumulatively cancelled nearly $12 trillion in stock market value. Corporates collectively played the role of biggest buyers, and many high-quality firms stayed private, further reducing the pool of investable public assets.

Former Citigroup strategist Robert Buckland, who coined the term “de-equitization,” compared this phenomenon to “quantitative easing for the stock market.” He pointed out that corporates persistently reducing share counts was a continuous factor supporting systematic share price gains over the last twenty years.

However, this logic is being completely upended by the AI wave. Citigroup data shows that last year, even hyperscale tech companies’ net buyback volumes have declined. Vincent Deluard, global macro strategist at StoneX Financial, describes this shift as a three-stage evolution:

“Initially funded by profits and free cash flow, then by borrowing; now it's full-scale—cash flow, debt, and equity, all in play.”

Goldman Sachs research shows US stock net equity supply may return to around zero in 2026 after more than twenty years of negative values. George Pearkes, macro strategist at Bespoke Investment Group, calls this “end-of-cycle behavior,” and bluntly states “from this perspective, this is quite a negative indicator.”

Super IPO Wave: SpaceX leads, OpenAI and Anthropic follow

Last week, SpaceX completed the largest IPO in history, issuing shares worth $75 billion and surging 19% on its first day. And this is only the beginning.

Reports indicate that about 160 companies have raised more than $120 billion via IPOs this year, surpassing the combined total of the past two years. Including new issues from already-listed companies, the added equity supply in the first half of this year has surpassed $360 billion, the highest for any comparable period in five years.

OpenAI and Anthropic’s mega-IPO launches are expected to follow in upcoming months. According to Ned Davis Research, SpaceX, OpenAI, and Anthropic could collectively raise over $170 billion in the short term.

Notably, the initial offering ratios for all three companies are exceptionally low—SpaceX sold less than 5% of its shares, below the usual IPO range of 15%–20%. Once lock-up periods expire and more shares become tradable, the market will face an even greater supply shock.

Ned Davis Research calculates that even placing a small portion of these three firms’ shares into the public market would be enough to offset a full year’s buybacks by S&P 500 companies.

Blackstone President Jon Gray says the IPOs of SpaceX, Anthropic, and OpenAI mark the IPO market “finding its footing for real,” adding Blackstone has had three portfolio companies list this year, and another seven in preparation.

Alphabet leads new issuance: Tech giants shift from “biggest buyer” to “biggest seller”

Alongside the IPO wave, already-listed tech giants are launching large new share offerings.

Alphabet is the most representative example. This Google parent was once the largest buyer of its own shares, but after vigorously raising debt in the US, Japan, and other markets for AI expansion, it is now preparing an equity issuance up to $85 billion—possibly one of the largest secondary offerings ever. Meta and other firms are also evaluating equity financing to support AI spending plans.

The driver behind this shift is the change in relative financing costs. The S&P 500 currently has a price-to-earnings ratio of about 25, unusually high for this century, making equity financing cheaper than debt financing.

Since the Federal Reserve pushed rates to twenty-year highs in 2023, stock yields (the inverse of P/E) have become increasingly competitive against bond yields; even with subsequent rate cuts, this pattern remains. John Luke Tyner, portfolio manager at Aptus Capital Advisors, says:

“It seems a lot of people are taking advantage of market financing—not necessarily because they think their shares are cheap.”

Who will take the baton? Retail investors and money market funds as key variables

Facing massive supply, the central market question is: who will buy?

Currently, optimism dominates. Bloomberg reports that retail currently comprises about one-fifth of US equity trading volume, up twofold from 2010. SpaceX allocated 20% of its IPO shares to individual investors, above the norm.

Man Group Chief Market Strategist Kristina Hooper summarizes current market sentiment as “FOMO (fear of missing out) mixed with fear, and most of the time, FOMO wins.”

Massive $7.9 trillion money market fund balances are also seen as potential sources of buying power. Investors say it's still unclear when this flood of equity and debt issuance will begin to cause market indigestion.

However, concentration of demand has some market participants concerned. Jim Bianco, President of Bianco Research, notes:

“Investor appetite and fundraising willingness are unlimited in AI, but outside it, other companies are mostly standing still.”

Kevin Foley, Co-head of Global Investment Banking at JP Morgan, acknowledges that capital market activity is “quite concentrated,” and warns “the world changes quickly, and risks remain unresolved.”

Historically, large-scale equity issuance tends to accompany major investment booms—railroads, canals, telecom networks were all such cases. But history also shows that these waves often end in bubbles.

BCA Research’s Chief US Equity Strategist Noah Weisberger studied 40 years of market history and roughly 12,000 IPOs, finding that in the 12 months after large IPOs, S&P 500 performance tends to be weaker than other periods, with a median gain of only 8%, and about 20% of cases showing negative returns.

“What’s coming is a batch of extremely large IPOs, which only highlight the worries. These aren’t small deals the market can digest quickly—they may become a meaningful drag on the market.”

Charles Lemonides, founder of ValueWorks hedge fund, compares the current situation to the late 1920s and the 1990s: innovative waves fueled speculative stocks and large financings; “on the way up, companies scramble for money, investors scramble to give it, because it’s a gold rush everyone wants to join.”

Robert Buckland directly says he has always been waiting for the moment when equity supply really starts ramping up, as a signal to counter the bull market. “Now, it's really ramping up.”

Inigo Fraser Jenkins, Co-head of Institutional Solutions at AllianceBernstein, takes a relatively moderate stance—arguing higher equity issuance should be seen more as a risk factor that suppresses future returns and increases volatility, rather than a fundamental turning point changing the market structure. "It narrows the path of success, to some extent."

Risk Warning and DisclaimerThe market has risks; investments require caution. This article does not constitute personal investment advice and does not take into account individual users' particular investment objectives, financial circumstances, or needs. Users should consider whether any opinions, views, or conclusions in this article suit their specific circumstances. Investing based on this is at your own risk. ```