SpaceX IPO becomes litmus test as AI bubble fears rattle markets before largest listing ever

AI bubble fears spread as SpaceX preps a record IPO

Software stocks are sliding, China is selling off, and Apollo and KKR are flashing warnings. On the day of the largest listing in history, the market is finally asking what all this AI spending will actually return. On the day SpaceX prices the largest stock-market debut in history, the market underneath it has a case of nerves. The cause is not rockets. It is AI. Several warning lights are flashing at once. Together they amount to the first serious test of a trade that has carried global markets for two years. The clearest signal is in software. Wall Street has spent 2026 living through what traders at Jefferies dubbed the 'SaaSpocalypse', a rolling selloff that, by some tallies, has erased as much as $2tn from the S&P software index since its late-2025 peak. The fear is specific. If AI agents can do the work of a team of sales reps, a company needs far fewer software seats, and the per-seat licensing model that built modern software starts to wobble. The private-equity giant Apollo has turned that fear into policy. It now screens software deals for AI-displacement risk, holds zero private-equity software exposure, and keeps software below 2 per cent of its assets. Its reasoning is concentration. Software swelled from about a tenth of global buyout volume to roughly 40 per cent at the peak, a level Apollo calls 'a fairly significant red flag'. The nervousness is spreading It is no longer just software. Hong Kong and mainland Chinese shares fell on Wednesday, with tech stocks among the hardest hit, as AI-bubble fears tracked a retreat on Wall Street. In Washington, Senator Elizabeth Warren introduced a bill, the AI Bubble Transparency Act, that would force banks to disclose their debt and equity exposure to chipmakers, data centres and hyperscalers. She casts the concentration as a systemic risk. And KKR's top macro strategist, Henry McVey, told clients the boom is real but will make the economy 'more extreme than anything we have seen since the start of the second industrial revolution' in the 1870s. Some sectors are 'starved', he wrote, while a handful, tech, high-end services and government, run 'flush'. Defence and power, the firm reckons, are the likeliest long-term winners. Underneath all of it sits the capex. Hyperscaler infrastructure spending is approaching $660bn this year, the largest corporate investment programme in history outside wartime, and increasingly funded by debt. Amazon's borrowing has passed $225bn, and Oracle just overshot its own capex guidance, with tens of billions more to come. The bear case is simple. Spending on this scale only pays off if AI moves from 'copilot' features to autonomous agents that justify the next order of magnitude of compute. If adoption plateaus, the return on $660bn a year falls below the cost of capital. The bull case is just as real. This is not 2000. As TNW has noted before, valuations and concentration sit above dot-com peaks on some measures, with the CAPE ratio near 38. But unlike the dot-com darlings, today's leaders are enormously profitable, and the capex cycle has barely begun to produce results. The honest answer to 'is this a bubble?' is that no one can know until the spending either delivers or it doesn't. What changed this week is that the market started asking the question out loud, after two years of not wanting to. SpaceX is not an AI company. But its debut, and the OpenAI and Anthropic listings lining up behind it, will be the closest thing to a real-time referendum on whether investors still believe. A wobble is not a crash. But for the first time in a while, the people writing the cheques are visibly weighing the question the boom has waved away: what, exactly, does all this return?

SpaceX IPO: the real test is OpenAI and Anthropic

The SpaceX IPO prices this week as the biggest in history. How it trades will reset valuations across private tech, and serve as a stress test for the two AI labs queued to follow it onto public markets. The SpaceX IPO is set to price the biggest stock-market debut in history on Wednesday, raising about $75bn at a valuation near $1.75tn and trading on Nasdaq from Thursday. But the most consequential thing about Elon Musk's rocket company going public may have little to do with rockets, or with Musk. It is what the listing does to everyone else. For the venture-capital industry, SpaceX is the thaw after a long freeze. Just 23 venture-backed tech firms went public in the US in 2025, down from 77 four years earlier, and the capital that funds have tied up in private bets has had nowhere to go. SpaceX's debut, already massively oversubscribed, hands that ecosystem its first large payout in years: early backers such as Antonio Gracias's Valor Equity Partners, on a roughly 4 per cent stake worth almost $70bn at $135 a share, alongside Peter Thiel's Founders Fund and Sequoia, stand to return tens of billions to their own investors, who will recycle much of it into the next wave of startups. The listing will also mint thousands of employee millionaires. The read-through to OpenAI and Anthropic The more important signal is what comes next. OpenAI and Anthropic have both confidentially filed to go public, and together with SpaceX they make up an IPO pipeline that could eventually bring $3.6tn of new stock onto public markets. How SpaceX trades in its first weeks will shape the benchmark investors use to price the two AI labs, and test whether the market has the appetite to absorb that much new equity at once. Wall Street already has a name for the worry: more shares than buyers. That makes the debut a genuine stress test rather than a victory lap. SpaceX is targeting revenue multiples beyond even Palantir's, leaving 'virtually no margin for error', as PitchBook's Franco Granda put it. Bulls point to real income, including reported payments of around $920m a month from Google for Starlink capacity and about $1.25bn a month from Anthropic for AI infrastructure. Bears remember Facebook's 2012 IPO, which slumped after listing and froze the new-issue market for more than a year. A wobble this time would land on OpenAI and Anthropic before they have even priced. The structural caveats remain. Musk keeps roughly 79 per cent of the voting power on about 42 per cent of the equity through a dual-class structure that led one Danish pension fund to blacklist the deal, and a tangle of opaque special-purpose vehicles has sprung up to sell SpaceX exposure to investors who could not get in directly. None of it has dented demand. But the deeper question, posed by Caplight's Javier Avalos, is whether any company can 'be private for 20-plus years, raise billions privately and still have juice once they go public'. SpaceX is about to provide the answer, and OpenAI and Anthropic are watching as closely as anyone.

After SpaceX's huge IPO, Americans' financial future will be bound to AI

They're about to get more AI rammed down their throats, stuck into their pension plans and investment portfolios Americans are growing worried about what artificial intelligence portends for their futures. Eight in 10 Americans report concern over AI, compared with a third who report being excited, according to a recent Quinnipiac poll. More than half think it will do more harm than good in their daily lives. Seven out of 10 think it will reduce the number of available jobs. Skeptical though they may be, they are about to get more AI rammed down their throats and stuck into their pension plans and their investment portfolios, whether they want it or not - binding their futures ever more tightly to the frenzied, risky, multibillion-dollar dash by technology moguls to develop machines capable of mimicking human thought processes to take over cognitive tasks. First up is this week's massive $75bn initial public offering (IPO) for Elon Musk's SpaceX, the largest ever, which at $135 a share will value the company at a cool $1.77tn, among the 10 largest companies in the world by market capitalization. While the company makes most of its money these days selling internet access, it largely needs the money to finance Musk's vast AI ambitions, which include blasting datacenters into orbit. The offering is just the first in a series: both Anthropic and OpenAI have already filed paperwork for their own IPOs later in the year, which will add two multitrillion-dollar artificial intelligence behemoths to the US's main stock indices. Even investors who don't care to buy their stock will end up owning a bunch, either in their 401(k) retirement plans or among their holdings of market index funds - supposedly safer investments for non-professional investors, built to reflect the entire market - which are forced to buy AI shares in proportion to their weighting in stock indices like the Nasdaq and the S&P. This may not happen right away, but it will happen. Musk has been lobbying for SpaceX to be quickly invited onto the indices, which would force index funds to buy the stock, no matter its price, and providing it a hefty boost. The tech-heavy Nasdaq changed its rules to fast-track the listing of behemoths like SpaceX. So did the FTSE Russell, to ease the entry of megacaps to its US indices. Standard & Poor's is sticking to its rules. This means SpaceX will have to post a profit - which it has not yet done - make a minimum set of shares available to the public and wait about a year to get onto the S&P 500, the most tracked index. The SpaceX offering, moreover, amounts to less than 5% of its shares - which will limit its immediate footprint. But if SpaceX follows the pattern set by large firms after their IPOs, some half of its shares could be trading openly by the time it joins the S&P 500 next year. This would give it about a 1.5% share of the S&P 500's market capitalization of more than $60tn - forcing index funds to plow hundreds of billions into Elon Musk's gambit to become the world's first trillionaire. If this sounds like a risky bet, it is. Musk, the guy who at the helm of "Doge" tried to devastate the federal bureaucracy, firing employees hand over fist, and who helped dismantle USAID despite knowing it would lead to hundreds of thousands of deaths, will have sole control over the company on which the retirement of many Americans may depend, allowing him to follow his baser instincts wherever they lead. And that's not the half of it. The so-called "magnificent seven" tech goliaths - Nvidia, Alphabet, Apple, Amazon, Microsoft, Meta and Tesla - already account for more than a third of the S&P 500's market value. Investors' views on the tech titans' massive AI investments have largely driven the ups and downs of the equity market as a whole. Adding SpaceX, OpenAI and Anthropic to this set will give tech billionaires an even tighter grip on Americans' financial future as they pursue their dystopian sci-fi dreams, free from any sort of government regulation. There may be a silver lining - of sorts. Having a lot of AI stock in a retirement plan may offer a hedge for the newly irrelevant workers displaced by artificial intelligence, granting them some stake in the economic fruits of the new hi-tech economy. But the balance of risks points in the wrong direction. A future in which the new AI agents hypercharge economic productivity and propel human prosperity to where it has never gone before remains an aspiration. Claims of astonishing progress by the latest AI models may well be true. But they have not been matched by significant gains in productivity. Dystopian scenarios appear ever more probable even as the economic rewards investors are counting on remain stuck far off on the horizon. Money eventually tires. It scares. It moves on to a new story. The Nasdaq fell more than 4% recently, shaken out of its optimistic stupor by indications that a robust labor market may force the Federal Reserve to raise interest rates later this year. This should remind us all that the AI extravaganza that has pumped the Nasdaq and the S&P 500 over the last year could come to an abrupt end - maybe just on the other side of Musk's trillionaire moment. Americans don't know what an AI-heavy future might bring about. But they do have vivid experiences of the pain that courses through society when a financial bubble built on hubris ends in collapse. The great financial crisis of 2008 will look like a cartoon compared with what will befall the finances of most Americans if the AI dream tucked into their investments turns into a nightmare.

Why Oppenheimer Analysts Are Bullish on SpaceX, the 'East India Company of Space'

Get personalized, AI-powered answers built on 27+ years of trusted expertise. An early review of SpaceX stock is in, and it's glowing. Oppenheimer on Thursday initiated coverage of SpaceX stock with an "Outperform" rating and a $190 price target. SpaceX shares are expected to begin trading tomorrow under the ticker "SPCX" at a $135 IPO price. "We believe that SpaceX will use its expertise in engineering, manufacturing and space technologies to grow to the largest communications, cloud/AI company in the world," Oppenheimer analysts wrote in a note on Thursday. They expect the company's sizable technological lead in rocket and satellite technology, its vertical integration and its scale to help it grow revenue from $19 billion last year to more than $200 billion by 2030. They see SpaceX as a leader in three distinct lines of business -- Starlink and connectivity, launch and space services, and artificial intelligence -- that overlap such that each unit contributes to the others' success and lowers costs across the company. Today, Starlink is the cash cow. It grew revenue about 50% last year, accounting for more than half of total sales. Its healthy free cash flows are helping to fund the massive capital expenditures of the launch and AI businesses. The launch business, and specifically its next-generation Starship, "is key to SpaceX's success," according to Oppenheimer. Starship is still in tests, but once operational it's expected to cut SpaceX's "cost-to-orbit" to about $100 per kilogram from about $2,700 today. Oppenheimer believes lower costs will enable SpaceX to expand its Starlink satellite constellation and make data centers in space economically viable, supporting its third business line -- AI. SpaceX puts the potential value of its AI business at $26 trillion -- about 90% of its total addressable market -- but it has a long way to go. AI is the company's least mature business, with just over $3 billion in revenue last year. Its Grok model trails competitors from Alphabet, OpenAI and Anthropic in capabilities. AI is also its most expensive business, accounting for more than 60% of SpaceX's capital expenditures last year. According to Oppenheimer, SpaceX could build "a vertically integrated AI stack that no other company on Earth can replicate." That full stack will consist of a foundational model (Grok); an application layer, secured through the possible acquisition of AI coding agent Cursor; semiconductors designed and made in-house as part of its Terafab project; and orbital data centers. Whether the last component is even possible is still unknown, "but SpaceX has arguably the best engineers and the company has a history of executing on tough deliverables," says Oppenheimer. Granted, investing in SpaceX comes with a lot of risk. Its valuation is rich, with shares priced at 100x sales. The most expensive stock in the S&P 500 by that measure, Palantir (PLTR), has a price-to-sales ratio of about 65. It's especially pricey considering growth hinges on unproven technologies. Oppenheimer also expects the stock's small float -- less than 5% of shares will trade following its IPO -- to make it volatile. And then there's Elon Musk, who has complete control over SpaceX, runs several other companies, and "has historically had controversial political/social views" that have hurt business in the past. These risks -- especially the valuation -- have some market watchers recommending investors sit out Friday's debut and wait for shares to re-enter Earth's stratosphere. Morningstar recently valued SpaceX at $780 billion, nearly $1 trillion less than what's implied by its IPO price. They expect shares to catch an updraft from investor enthusiasm and a scarcity of shares on day one, but to face resistance in the following months as new stock hits the market and investors look ahead to more blockbuster IPOs on the horizon. But, ultimately, Oppenheimer estimates the risks pale in comparison to the galactic opportunities. They see potential for SpaceX to expand the horizons of the economy itself and pioneer industries like lunar development, interplanetary passenger and cargo transport, space tourism, and asteroid mining, just to name a few. "Should SpaceX execute on its mission -- and we believe it will -- it will be the modern-day East India Company of space, controlling routes, infrastructure, and commerce of an entire frontier and giving it a quasi-sovereign reach, far beyond that of any ordinary corporation."

Will SpaceX factor last after IPO? Mega listing plan sparks valuation debate amid AI boom

SpaceX's huge IPO is set to launch, attracting record investor bids. This event will test the market's appetite for AI companies. Investors are watching to see if it signals continued growth or a market peak. The offering's success could influence future AI IPOs from companies like OpenAI and Anthropic. This IPO is a significant moment for global markets. Few IPOs in recent years have been as avidly anticipated and sparked as much debate as rocket and artificial intelligence (AI) company SpaceX's blockbuster issue. As the Elon Musk-founded company gears up for listing on Friday after attracting record investor bids for its roughly $75 billion IPO, the largest ever, the discussion extends beyond the stock's debut. Investors are asking whether it will validate the torrent of money that has flowed into AI-linked companies and prolong Wall Street's dream bull run or serve as a signal that market optimism has reached its peak. Saudi Aramco's $29.4 billion issue in 2019 was the largest IPO before this. Mega listing plan sparks valuation debate amid AI boom Stress Test The 555.6-million-share IPO of SpaceX was subscribed more than four times on Wednesday night. The bids underscore investor appetite for the hottest investment theme currently, AI, allowing SpaceX to target an eye-popping $1.75 trillion valuation on debut, turning it instantly into one of the world's most valuable companies. The valuation target, along with the company's losses and questions over corporate governance, has led to heightened scepticism about the stock's prospects, with veteran short seller Jim Chanos warning the offering does not justify the astronomical valuation. SpaceX posted revenue of $18.67 billion in 2025, up 33% from the previous year, along with a net loss of $4.94 billion. To be sure, it's also some kind of a referendum on Musk. To his dedicated fanbase, Musk can do no wrong. Naysayers warn investors against getting swept up in the general euphoria of a listing pop lest they be left holding the pieces down the line. Beyond the scale, SpaceX's listing has greater significance for global markets riding the AI wave. It's a stress test of market appetite for the high-growth, capital-intensive AI theme as equity supply risks are set to rise. It will also signal how much tolerance investors have for losses posted by some stars of the AI firmament. "There is also a psychological element to the supply-demand picture with SpaceX," BNP Paribas Securities analysts wrote in a recent client note. "Many investors will likely anticipate that the deal size is only the tip of a supply iceberg." OpenAI and rival Anthropic recently made confidential filings for mega IPOs, seeking to capitalise on the voracious investor demand for AI-linked shares. Both these companies may be targeting trillion-dollar valuations. "Follow-on issuance and stock lock-ups expiring plus possible IPOs for OpenAI and Anthropic collectively amount to much more equity supply," said the BNP note. For seasoned investors, a likely glut of AI-linked IPOs and share sales evokes memories of the dotcom boom. At that time, investors snapped up shares at astounding prices, ignoring losses and the absence of viable business models. As comparisons with previous market bubbles resurface, so too has the familiar refrain that "this time is different" with proponents arguing that the scale of investment flowing into AI and its growing commercial adoption set the current boom apart from past ones.

A Word in Your Ear: SpaceX, an IPO Between AI and Mars

With a valuation of $1,770bn, SpaceX is preparing to execute the largest IPO in history. This is more than enough to capture the attention of investors who have dreamed for years of owning a piece of Elon Musk's empire. But upon reading the IPO prospectus, a surprise quickly emerges: SpaceX no longer presents itself solely as an aerospace player. The company is now structured around three distinct business lines that completely redefine its profile. More Than Just a Rocket Manufacturer Space remains, of course, the historical heart of SpaceX. Falcon 9, Falcon Heavy, Dragon, and soon Starship continue to form the group's foundation. Accounting for more than 80% of the world's mass launched into orbit, the company largely dominates its market. However, rockets are no longer the sole source of growth. Starlink has become an essential pillar of the business, with over 10m subscribers across 164 countries. In 2025, connectivity generated more than $11bn in revenue, surpassing traditional space activities. This evolution demonstrates that SpaceX no longer views space merely as a destination, but as an infrastructure capable of supporting a much broader ecosystem. Artificial Intelligence at the Center of the Project The true novelty of the filing, however, concerns artificial intelligence. Following the integration of xAI and the X platform, SpaceX now houses the Grok models, the COLOSSUS data centers, and the infrastructure necessary for their operation. This reorganization profoundly transforms the nature of the company. An investor buying a share of SpaceX is no longer just investing in launch vehicles or satellites, but also in AI models, computing infrastructure, and a global social network. This shift is evident in the figures provided by the company. Out of a total addressable market estimated at $28.5 trillion, nearly $26.5 trillion is attributed to opportunities related to artificial intelligence, far ahead of space ($370bn) or connectivity ($1.6 trillion). An Ambition That Reaches Far Beyond Earth's Orbit The projects presented to investors illustrate this new direction. Starship is intended to drastically reduce the cost of access to space in order to deploy more satellites and expand Starlink's capabilities. Even more ambitious, SpaceX plans to develop orbital data centers starting in 2028. The goal is to utilize the solar energy permanently available in space to power the growing needs of artificial intelligence. Added to this is a partnership with Tesla and Intel aimed at developing its own AI chips. Rockets, satellites, connectivity, data centers, AI models, and semiconductors: Elon Musk is progressively seeking to master the entire value chain. Ultimately, the SpaceX IPO may not be about the value of a space company. Rather, it questions Elon Musk's ability to build a global infrastructure blending space, connectivity, and artificial intelligence within a single group.

SpaceX by the numbers: Six charts mapping businesses driving its IPO ambitions

June 11 (Reuters) - SpaceX's market debut on Friday is expected to be the largest-ever IPO, capping the meteoric rise of a company that has reshaped the space business with reusable rockets and internet beamed from orbit and which now targets space-based AI. Aiming for a $1.75 trillion valuation that would instantly rank it among the world's most valuable companies, SpaceX is pitching itself as humanity's ticket to Mars. Its financials, though, show a company whose aggressive spending on computing power for AI and developing a new rocket has overwhelmed the profits from its Starlink satellite internet service. Here are six charts that illustrate its business: AI LOSSES OUTWEIGH BOOST FROM STARLINK Last year, SpaceX's sales rose 33% to $18.67 billion, with Starlink accounting for about 60% of the total thanks to its about 10.3 million users across 9,600 satellites. But merging with the money-losing xAI pushed the company to a net loss of $4.94 billion last year, from a profit of $791 million in 2024, when the explosive growth of Starlink and its reusable rocket launch business powered earnings. SPACEX'S LAUNCH CADENCE SETS IT APART FROM RIVALS SpaceX has gone from a single launch in 2006 to more than two every week, far outpacing rivals and making it the go-to launch partner for NASA and the Pentagon. Its reusable Falcon 9 has powered that surge, while the larger, still-in-development Starship is intended to carry crew and cargo on an unprecedented scale. Falcon Heavy essentially combines three Falcon 9 boosters to form one of the world's most powerful rockets. It is capable of lifting 64 metric tons to low-Earth orbit and currently launches heavy military satellites and interplanetary probes. XAI TRAILS AI RIVALS ANTHROPIC, OPENAI SpaceX's biggest addressable market, it says, is AI. In February, SpaceX acquired xAI and united two key parts of Musk's business empire. But by many measures, xAI is behind rivals Anthropic and OpenAI. A recent report from finance startup Ramp showed that more than 30% of its business customers were paying for Anthropic's and OpenAI's AI services in April, with the Claude Code creator overtaking OpenAI for the first time, while xAI's adoption remained around 5%. The data -- based on Ramp's analysis of spending by about 50,000 customers -- only captures a small slice of spending by big enterprises on AI, an area where Anthropic is believed to be the market leader. SPACEX IS RAISING FUNDS AT A PRICEY MULTIPLE Investors in the SpaceX IPO are being asked to pay a premium that dwarfs the multiples at which some of the most valuable tech companies trade. At $135 per share, SpaceX would trade at a trailing price-to-sales multiple of roughly 94 -- above companies such as Nvidia, Amazon and Meta and closer to pure-play space peers such as Planet Labs and Rocket Lab, which trade at 50.4 and 115.4, respectively, despite being younger companies. Since SpaceX generated a loss last year, it cannot be compared on a price-to-earnings ratio. STARSHIP WILL LIFT SPACEX'S LAUNCH CAPACITY The case for that premium rests partly on Starship, which is designed to be reusable and carry over 100 metric tons to low-Earth orbit, more than any other rocket flying today. This would be crucial not just to SpaceX's launch business but also to its ambitions to put AI data centers in orbit. Current SpaceX rockets, Falcon 9 and Falcon Heavy, can carry about 22.8 metric tons and 63.8 metric tons to low-Earth orbit, respectively. The Starship's test flight in May marked a major milestone ahead of the IPO, successfully deploying mock satellites and completing a controlled Indian Ocean splashdown despite minor engine issues. (Reporting by Anhata Rooprai and Jaspreet Singh in Bengaluru; Editing by Sriraj Kalluvila) By Anhata Rooprai and Jaspreet Singh