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Upcoming Mega-Cap IPOs Poised to Reshape Stock Indexes, Wells Fargo Says

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Upcoming Mega-Cap IPOs Poised to Reshape Stock Indexes, Wells Fargo Says

A wave of mega-cap initial public offerings is poised to reshape major stock indexes this year, Wells Fargo Investment Institute said in a note on Monday.

Elon Musk-led SpaceX is looking to raise a record-breaking $75 billion in its initial public offering. Last week, AI chatbot Claude maker Anthropic confidentially filed for an IPO in the US, while ChatGPT parent OpenAI also plans to go public.

"A wave of IPOs expected this year could be the largest capital-raising cycle on record, and totals about 0.5% of US equity market capitalization," Douglas Beath, global equity strategist at Wells Fargo Investment Institute, wrote.

These IPOs may drive methodology adjustments by index providers and see new constituents added to index funds and exchange-traded funds, Beath said.

"This can trigger buying pressure and temporarily drive up IPO valuations," he added. "It could also drain liquidity from other areas of the market, and increase concentration within major indexes."

That comes as household equity exposure is already close to a record high, suggesting retail investors may divest existing holdings to fund new positions, according to the Wells Fargo report.

SpaceX reported a net loss of $1.69 per share in 2025, its SEC filing showed. Reuters reported that both OpenAI and Anthropic are also unprofitable.

While a successful IPO can lift investor confidence, massive post-IPO premiums may signal "speculative excess," Beath said.

The information technology sector gained 37% from April to May, compared with 17% growth for the S&P 500, Beath said.

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