How the SpaceX IPO will change the market

To say 2026 will be a big year for IPOs is an understatement.

SpaceX is ramping up for what will likely be the largest IPO in history as soon as next month, targeting a nearly $2 trillion valuation. Meanwhile, OpenAI is reportedly preparing IPO paperwork, and is hoping to go public at a valuation as high as $1 trillion as soon as September. Then there’s Anthropic, which is also reportedly eyeing a fall IPO that could also be valued at roughly $1 trillion.

The size of these megacap offerings is truly mind boggling: “Those three companies would exceed every US VC-backed IPO in the last decade combined in terms of IPO proceeds,” explained PitchBook research analyst Emily Zheng. “We’re definitely in unprecedented times.”

She added that just SpaceX alone, if its valuation is higher than $1.25 trillion, would be greater than the past decade’s worth of IPOs combined in terms of total exit valuations.

We spoke to Zheng about how the IPO market has changed over the past few years, how these megacap IPOs could transform markets, and whether these monster valuations are really justified.

Our conversation has been edited for length and clarity.

In recent notes, you explained that the venture market has never been worth more, yet the IPO market remains relatively frozen. We’ve seen more IPO activity over the last year, but for years the market was effectively stalled. Why does that dichotomy still exist, and what needs to happen for the market to move more freely?

The market initially froze because of rising interest rates in 2022, which caused a pause in a lot of venture capital activity. Since then, it’s been difficult for the IPO market to restart for several reasons. First, valuations were extremely high during the pandemic era, and we started seeing more valuation markdowns among unicorn IPOs last year. That’s a step in the right direction, but it’s also difficult for companies to go public at valuations below their private-market peaks.

Another factor is that there hasn’t been enough activity to rebuild momentum. There’s optimism around certain companies expected to go public, but not enough to fully reopen the pipeline. A big reason is that when we look at the biggest IPOs from last year, nearly all are trading below their first-day prices. That volatility and uncertainty around pricing has prevented the IPO market from fully reopening.

This year, all eyes are on the mega-IPO names. How they perform will likely have an outsized impact on the broader IPO market for the rest of the year.

Those mega names—like SpaceX, OpenAI, and Anthropic—raise a big question: Do you think they’ll revive the IPO market, or crowd everyone else out?

I’d break it into two scenarios. In the ‘catalyst’ scenario, these companies go public and perform well. That could restart the IPO pipeline and inject enthusiasm into the market because so much capital is flowing into AI right now. AI dominates investor conversations, so if companies like OpenAI and Anthropic perform strongly, it would validate these very high valuations.

The ‘distraction’ scenario, or the unfavorable scenario, would be if they don’t perform well. That could trigger a broader market reset around whether AI companies are overvalued. If so, that will probably freeze activity, not only in exits but potentially in dealmaking, such that everyone tries to reevaluate and figure out what’s next. If there aren’t viable exit opportunities years down the line, that creates broader concerns across venture capital as an asset class.

Do you think the valuations we’re seeing from these megacap companies are warranted?

That’s the ultimate question, I feel like, and I think that’s what’s going to be tested. The big question right now is profitability. AI is so expensive, and the profitability problem hasn’t been solved. I think one reason these companies are going public is because they need to raise a lot more capital. They’ve been able to get a lot of private money, but at a certain level, they need much more. So in a way, the defining question will be: How quickly can they get costs down and revenue up?

What should retail investors be watching to judge how these valuations are going to hold up?

Revenue and net profit have been big discussion points, especially with SpaceX’s S-1 coming out and the company reporting roughly a $5 billion net loss. That’s definitely an important statistic when you’re looking at a company’s valuation.

It’s also important to realize there’s typically a six-month lockup period before existing investors can sell their shares. So I’m usually looking at how the stock price performs after that period as well, because I think that’s a better determinant of investor conviction and long-term share price performance.

During those first six months, a lot of existing investors aren’t able to sell, so it’s only a small portion of the picture, it’s not the entire universe of who can sell and who can buy.—LB