Wall Street sees SpaceX IPO as absorbable, but AI deal pipeline and volatility worries linger
June 11 — CNBC reported that Wall Street broadly expects U.S. equity markets to comfortably digest the incremental supply from a SpaceX IPO, even as investors brace for heightened volatility if a wave of large AI-linked listings and capital raises follows.
Gavekal Research estimates that, in the 12 months through September 2025, S\u0026P 500 companies issued about $1.7 trillion of equity in total, or roughly $140 billion per month. Against that backdrop, SpaceX\u0027s targeted $75 billion raise amounts to a little more than two weeks\u0027 worth of shareholder dividend payments, and should be \u0022surprisingly easy to absorb\u0022 in the context of the overall U.S. equity market. Gavekal said any liquidity drain is likely to have only a short-term effect on U.S. stock performance.
Beyond SpaceX, Anthropic, OpenAI and Alphabet are also looking to tap public markets. Combined with SpaceX, the four companies are expected to seek about $380 billion, equivalent to roughly two months of typical issuance volume.
Even so, IPOs tend to come with elevated volatility. Truist Wealth reviewed 30 major IPOs over the past 15 years and found that newly listed shares often fall and experience significant drawdowns within a year. The median decline after one year was 9%, while the average maximum drawdown during the first year reached 54%.
Market participants also see potential for sector rotation. A large SpaceX deal could prompt investors to sell existing tech winners to fund new allocations. This week has already shown early signs of that shift, with flows moving away from highflying chip stocks and toward defensive areas such as consumer staples.
Nasdaq rule changes could add another volatility catalyst. When SpaceX joins the Nasdaq-100 Index, its weight will not be determined solely by the $75 billion of tradable float. Instead, a 3x multiplier will be applied, effectively calculating the index weight off a $225 billion market cap. That structure could amplify post-IPO price swings via passive-fund inflows and outflows.
Retail demand is also expected to be unusually large. Jay Woods, Chief Market Strategist at Freedom Capital Markets, warned that the enthusiasm could leave many individual investors disappointed, stressing that SpaceX \u0022is not a lottery ticket\u0022 but a long-term investment that may take time to justify its valuation.
