A big wave of tech IPOs is coming, likely shaking up the stock market and pushing Warren Buffett to the sidelines. SpaceX has just filed to go public, and reports say OpenAI might not be far behind.
Traders on prediction markets are confident. They believe there’s a 92% chance OpenAI will file for its IPO this year. Anthropic, OpenAI’s competitor, is said to have a 69% chance of going public too. If these companies launch as expected, they could be valued over $1 trillion on their first day, setting record highs.
For context, SpaceX was valued at $1.25 trillion earlier this year, with traders predicting a 56% chance that its stock will soar to over $2.2 trillion by the end of its debut day. OpenAI is looking at a potential first-day close above $1.4 trillion, with traders estimating a 65% chance. Anthropic’s first-day projections are also high, with chances around 47% for its valuation to eclipse $1.8 trillion.
These valuations, if true, would put these companies in the same league as Berkshire Hathaway, which currently sits at about $1.03 trillion. In fact, they could even challenge giants like Meta and Tesla, whose market caps hover around $1.5 trillion.
Analysts are paying attention. Deutsche Bank’s Adrian Cox noted that while Berkshire Hathaway saw revenues exceeding $350 billion last year, SpaceX and OpenAI are still operating at a loss, with revenues of $18.67 billion and $13.1 billion respectively. Anthropic’s financials are less clear, but reports indicate it might be on track for a profit with nearly $11 billion in revenue.
This surge in valuations stems partly from companies staying private longer. Many are finding innovative ways to raise funds without going public. However, this rush of IPOs raises some eyebrows. Will there be enough buyers to support such sky-high valuations?
Cox reassured investors, pointing out that the U.S. stock market is now worth around $70 trillion. This is more than five times larger than during the dot-com bubble of the late 1990s, which averaged nearly 500 IPOs a year, compared to about 120 in the last decade.
As these companies prepare to enter the market, their journeys will certainly be worth watching.
For more insights on upcoming IPOs and the tech industry’s impact, check out CNBC for updates.
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