Source: Fortune
Summary
Investors are excited about the upcoming IPOs of OpenAI and Anthropic, but some analysts are warning that the flood of new shares could signal a downturn in the stock market. Jonas Goltermann, chief markets economist at Capital Economics, notes that major IPOs and high equity issuance have often preceded market peaks, citing examples from 1999, 2007, and 2021. Meanwhile, Deutsche Bank analysts argue that equity issuance waves typically coincide with strong stock market returns, not market stress.
Our Reading
The numbers tell one story.
SpaceX’s $75 billion IPO and Alphabet’s $85 billion secondary stock offering have raised eyebrows. Analysts are debating whether the good times will keep rolling. Goltermann warns that the AI equity boom may be approaching its final innings. Deutsche Bank analysts, on the other hand, see strong equity demand and robust earnings growth. The current upcycle started in 2023, with U.S. stock issuance jumping from $30 billion to $120 billion.
The market is sending mixed signals.
Author: Evan Null
