SpaceX and OpenAI’s potential public listings are renewing debate on whether the artificial intelligence trade has moved too far, too fast. Bank of America strategist Michael Hartnett says the two IPOs could push US market concentration from about 40% toward 48% of total market value.
This level would sit above the dot-com bubble, the Nifty Fifty period, Japan’s 1980s boom, and the Roaring Twenties. However, it would remain below the railroad boom of the 1880s. The warning comes as inflation and bond yields raise new questions over high-growth valuations.
Hartnett’s estimate places SpaceX and OpenAI at the center of a wider concern about AI-linked market leadership. Today’s market already relies heavily on a small group of large technology companies. Adding two more mega-valued names could deepen this concentration.
According to the analysis, the issue is not only company size. It also involves timing. Investors would need to pay for growth that may take years to arrive, while higher yields reduce the value of future earnings in today’s market.
US headline inflation, measured by the Consumer Price Index, rose 3.8% in April. This places inflation near the 4% level Bank of America tracks as a difficult point for equities in past cycles.
BofA data shows that when CPI first crossed 4% in earlier periods, the S&P 500 lost about 4% over the next three months. The index also fell nearly 7% over the following six months. Therefore, investors are watching inflation as closely as the IPO calendar.
Meanwhile, the 30-year Treasury yield is moving back toward 5%. Higher bond yields can make long-term growth stories harder to price. This creates a tougher setting for SpaceX, OpenAI, and other companies tied to future earnings.
SpaceX could begin trading as early as June 11 under the ticker ‘SPCX.’ The company is expected to target a valuation near $1.75 trillion, which would make it the largest stock market debut on record.
At this valuation, SpaceX would trade near 100 times sales. Reuters compared this level with Nvidia’s price-to-sales ratio of about 24. The report also stated that SpaceX lost nearly $5 billion last year.
University of Florida professor Jay Ritter said companies with very high price-to-sales ratios often carry strong growth stories, but risk remains. “Stuff could go wrong,” he said. His comment reflects caution around paying high prices before future results are clear.
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A Reuters review of the 50 largest IPOs by valuation over the past five years found that about three out of four trailed the S&P 500. Investors who bought each IPO at the offer price gained an average of 27% through May 21, while the S&P 500 rose 53% over the same periods.
Retail investors often face a harder setup. Many cannot buy at the IPO price and instead enter after first-day jumps. Analysts noted that returns were weaker for buyers who entered during the first trading session.
Some AI-linked listings performed well. Astera Labs has gained more than 700% since its 2024 IPO, while Arm Holdings has risen about 400% since 2023. However, other major listings struggled, including Rivian, Didi Global and Figma.
The SpaceX and OpenAI IPO debate now sits at the center of three market questions: valuation, inflation, and concentration. A strong debut could extend AI enthusiasm. However, ‘the listing is not the signal by itself,’ as the broader rate and inflation backdrop may decide how investors price the next stage of the AI trade.