JPMorgan just gave the AI IPO wave a green light. |
The firm is one of the lead investment banks on the Anthropic IPO. My estimates suggest Pre-IPO shares could jump 210% between today and the October IPO. |
Here’s how to invest today. |
Kevin Foley, the bank's co-head of global investment banking, went on CNBC Tuesday to answer the question every investor is asking. |
Is the AI financing boom headed for a crash? |
His answer: the market is backed by a global capital pool of more than $80 trillion. That's the cushion behind huge IPOs like SpaceX (Nasdaq: SPCX) and the massive data center buildout. |
It's also the reason a historic wave of IPOs — including Anthropic and OpenAI — are moving forward right now. |
Want to buy shares before the IPO? Watch this for instructions. |
Foley made a point that caught my attention. The market is ready to take SB Energy public. That company has revenues of just $200 million and losses of $3 billion. |
That would have been unthinkable a few years ago. So, what changed? |
The global stock market has grown from $70 trillion to $160 trillion over the past decade. The pool of capital has more than doubled. And that changes what the market can digest. |
JPMorgan's research team released the numbers in a new report. |
About $260 billion of equity issuance is expected to hit the market this year. |
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That sounds enormous. But the S&P 500 alone is now worth more than $65 trillion — about 55% larger than in 2021, the last time IPO volume ran this high. |
All the new IPO shares plus insider lockup sales add up to roughly 1% of total market value. Even a $1 trillion IPO with a 10% float would enter the major indexes at less than a 0.2% weight. |
Meanwhile, demand keeps growing. Corporate buybacks are on pace to reach $1.5 trillion this year — more than all the expected new issuance combined. And households have flipped from net sellers to net buyers of stocks. |
One more data point worth knowing. |
Big IPOs are not necessarily a sign of a market top. |
JP Morgan looked at the 25 largest IPOs in history. Two-thirds of these mega IPOs were followed by S&P 500 gains of 5% to 20% over the next 12 months. |
One thing to keep in mind: JPMorgan is a lead underwriter on the Anthropic IPO. The bank has a direct interest in a healthy IPO market. |
Still, the numbers stand on their own. The market has never been bigger. And the Q4 IPO calendar — with Anthropic at the top — now has Wall Street's biggest bank arguing the demand is there to meet it. |
Go here to invest – before the prospectus is live. |
Ian Wyatt
Editor, IPO Watch |
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