AI IPO rush could overwhelm Wall Street demand

AI IPO – OpenAI’s late-Monday move to file confidentially for an IPO puts multiple AI giants on a potential listing path at once—alongside SpaceX’s looming $75 billion ask and Perplexity’s planned 2028 debut—just as investors weigh whether Mega-IPOs risk turning into a

By the end of a late Monday, the filing wasn’t a debut—it was a signal. OpenAI said it had confidentially filed for an IPO, and Wall Street suddenly had to measure more than one company’s future. It had to measure whether the market could absorb a wave of massive listings at the same time.

The timing matters. The push is no longer theoretical: with OpenAI in motion, the three biggest AI companies are now in line to go public. Perplexity, whose CEO said in an interview Monday that it planned to IPO in 2028, is set to come later.

SpaceX is asking Wall Street for about $75 billion. Anthropic and OpenAI may seek a bit less, but the figures would still almost certainly be well above the current all-time high for an IPO. That record was set in 2014, when Alibaba raised $22 billion.

In this moment, the stakes aren’t just about who gets the highest valuation. They’re about whether demand can keep pace with the sheer size—and speed—of supply.

The bullish case runs on growth, scale, and timing. Revenue growth at companies like OpenAI and Anthropic has been unlike anything investors have seen before, the article notes. SpaceX. meanwhile. has built a solid business in the rocket field and is betting heavily that it can make xAI an even bigger part of its overall operations.

SpaceX is also actively developing a large-scale collection of AI data centers in space. a plan described as potentially crucial to that strategy if it succeeds. In that kind of scenario. investors may be willing to look past early losses and instead bet on the possibility that the companies’ businesses grow rapidly once they capture enough demand.

If AI performs the way OpenAI CEO Sam Altman and other executives envision. the logic goes. some or all of these companies could expand exponentially—and their stock prices could follow. The immediate payoff investors often focus on is personal as well as financial: these IPOs could create thousands of new millionaires and more than a few billionaires among long-time employees.

AI has already helped shift valuations. The article points out that AI has driven valuations for both the S&P 500 and tech stocks within that index above the historical average. Governments have also been handing out billions of dollars in contracts to AI companies.

There’s even a profitability milestone in the mix. Anthropic is expecting to report its first profitable quarter in June. Revenue is set to more than double to $10.9 billion in the second quarter. and the company expects to turn a $559 million profit at the end of the current quarter. If it happens as projected, it would be the first major AI company to report a profit.

Still, the skepticism is getting louder, and it comes down to the numbers.

Anthropic is described as the outlier on the hopeful side. OpenAI. by contrast. is predicting a $14 billion financial shortfall for 2026. according to reports citing internal documents. and it “won’t be profitable until 2029.” SpaceX is also flashing red in the near term: in the first quarter of 2026 alone. it lost $4.3 billion.

SpaceX is the only AI company in this group whose S-1 filing with the Securities and Exchange Commission has been made public. That matters because an S-1 is meant to lay out the financial picture ahead of a share sale. And it’s where some analysts say the risk becomes hard to ignore.

Ed Elson. an analyst who co-hosts the Prof G Markets podcast with entrepreneur Scott Galloway. wrote: “There’s no getting around it — these numbers are terrible.” He added: “I’ll put it simply: slowing revenue + skyrocketing expenses = not good. … The stock is set to be priced at 107 times sales. which would make it one of the most expensive stocks in history. It will be twice as valuable [as] Walmart while generating less revenue than Macy’s.”.

Valuation disputes are also sharpening. Morningstar’s Nicolas Owens says his fair value estimate of the company’s worth is roughly $780 billion—less than half of what the company is targeting. Aswath Damodaran. a professor at NYU’s Stern School of Business known as the “dean of valuation. ” says he believes SpaceX equity value is roughly $1.3 trillion—nearly a half billion less than the company claims.

Beyond the valuations themselves, there’s the market-structure question: what happens when a “tsunami of shares” hits at once. The article warns that the amount could overwhelm demand, pushing share prices and investor portfolios into volatility.

It also points to a more human vulnerability inside the frenzy—retail investors, who may buy into the cult of personality surrounding some of the CEOs of these firms. When listings move fast and valuations jump, those investors can be the ones left holding the volatility.

The bigger picture behind the caution is familiar to economists, but on a far larger scale. Some worry that the AI bubble could follow the trajectory of the dotcom bubble—except bigger, with capital expenditures higher than ever and valuations rising alongside them.

There’s also concern about a financing dynamic that can blur what counts as real demand. The article lays out how OpenAI. in March. announced a $110 billion funding round. with $50 billion coming from Amazon and $30 billion from Nvidia. along with other backers. In the same month. AMD and Meta unveiled a partnership in which AMD would deploy 6 gigawatts worth of graphic processing units to Meta’s AI data centers. while Meta may take up to a 10% stake in AMD. OpenAI and AMD have struck a virtually identical deal.

The problem with money moving that way is that it can overinflate the value of the AI industry, potentially blurring the line between genuine demand and companies buying from themselves.

Jacob Bourne. an analyst with Emarketer. told Fast Company at the time: “We’re not dealing with a very diversified industry here.” He continued: “This is not a validation of organic demand for AI. They’re making these deals and it’s circular. It’s a blurring of the line between customer revenue and partner investments.”.

Fidelity echoed similar concerns. It wrote: “a percentage of AI investment is traveling in a loop among a small number of companies. making it harder to accurately measure the level of demand outside of those firms.” Fidelity is largely bullish on AI. but it frames the bubble risk as something that tends to burst after a long stretch of liquidity at low interest rates ends.

That brings the Federal Reserve back into the story. The article notes that Fidelity points to bubbles tending to burst after an extended period of liquidity with low interest rates comes to an end, when the Federal Reserve raises rates to fight inflation.

The Fed hasn’t raised rates since July 2023, and Donald Trump is pushing hard for more cuts. Still, Fed watchers in the article say they don’t expect a rate hike soon, but odds of an increase by year’s end are growing as inflation has proven persistent.

If rates do rise, the article warns that bubble fears could intensify. And in that scenario, it offers a practical takeaway: the best protection for investors is not to bet everything on AI alone. “Make sure you own more than AI companies in your portfolio.”

Fidelity’s guidance is direct: “Like all thematic investments, it’s important to balance AI-related holdings with a healthy mix of other equities, including other large caps, international equities, mid caps, and select value stocks.”

The late-Monday filing has turned the waiting game into a countdown. With OpenAI entering the process and other giants lining up. the question for Wall Street is no longer whether investors believe in AI. It’s whether they’ll have enough appetite—at the right price—to absorb a market moment that could be defined as much by supply as by story.

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