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Tom Lee says trillions in tech IPO supply won't crash the S&P 500
TL;DR
Tom Lee predicts that upcoming mega IPOs, including SpaceX and OpenAI, won't crash the S&P 500, despite potentially introducing trillions in new equity supply. He believes that current low allocations to public equities by major investors will mitigate any negative impact.
Key points
- Tom Lee predicts mega IPOs won't crash the S&P 500
- SpaceX could be the second largest IPO ever
- Upcoming IPOs may introduce trillions in new equity supply
- Current investor allocations to public equities are historically low
- Lee argues the situation may not be bearish for markets
Mentioned in this story
SpaceXOpenAIAnthropicTom Lee
Tom Lee, chairman of Bitmine Immersion Technologies and co-founder of Fundstrat, does not expect the coming wave of mega IPOs to derail markets even if they could eclipse the entire dot-com boom in scale.
Lee recently discussed the potential effect of SpaceX, Anthropic, and OpenAI listing which could unleash trillions of dollars in new equity supply into public markets.
In inflation adjusted terms, Elon Musk's SpaceX alone could become the second largest IPO ever, seeking a market valuation above $1.5 trillion, behind only Saudi Aramco.
Lee acknowledged concerns about the amount of supply these listings could introduce into public markets, especially after the standard 90-day lock-up periods expire. He noted that SpaceX is likely the most anticipated IPO ever, Lee estimates the three IPOs could generate trillions in supply, equivalent to roughly 5% to 6% of the S&P 500’s total market capitalization.
Despite the scale, Lee does not believe the situation is necessarily outright bearish for the markets. He argues that family offices, pensions, and high net worth investors currently hold historically low allocations to public equities after years of favoring private markets and alternative investments.
There is significant capital available to absorb the liquidity as allocations rotate back toward U.S. public stocks, in Lee's view.
He also expects many early investors to hedge or borrow against holdings rather than immediately sell and trigger large tax events.
Lee also discussed cryptocurrency's underperformance against expectations despite growing institutional interest, highlighting how instant settlement and transaction verification are driving Wall Street’s push towards tokenisation, a point he previously made at Consensus Miami 2026.
Furthermore, Lee believes blockchain could provide a neutral framework for identity verification in an AI driven world. Banks are increasingly circling the industry because they recognize the significant revenue opportunities emerging from the convergence of crypto, AI, and finance, he added.
Q&A
How much could the upcoming IPOs like SpaceX and OpenAI affect the S&P 500?
The IPOs could introduce trillions in supply, approximately 5% to 6% of the S&P 500’s total market capitalization.
What is Tom Lee's stance on the impact of mega IPOs on the stock market?
Tom Lee believes that the influx of mega IPOs will not derail the markets, despite concerns about increased supply.
Why are major investors currently holding low allocations to public equities?
Major investors, including family offices and pensions, have favored private markets and alternative investments over public equities in recent years.
