OpenAI and SpaceX IPOs Could Deepen AI Bubble Concerns

AOL.com reported Wednesday that blockbuster listings from SpaceX and OpenAI could push the AI bubble well past the concentration levels seen during some of history’s most infamous market manias.

The analysis draws on research from Bank of America strategist Michael Hartnett, who flagged that today’s AI leaders already account for roughly 40% of total US market capitalisation. Adding the two mega-cap listings to that mix could push that share toward 48%.

Market Concentration at Historic Levels

That 48% figure would exceed the peaks reached during the Roaring Twenties, the Nifty Fifty era of the 1960s, Japan’s 1980s asset boom, and the dot-com frenzy. Only the railroad mania of the 1880s saw tighter concentration among the largest names.

The concern is not merely about size. Both SpaceX and OpenAI would ask investors to underwrite growth stretching years into the future. That is a harder sell when borrowing costs are elevated and patience is in short supply.

Rising Yields Complicate the Calculus

The bond market is adding its own layer of pressure. The 30-year Treasury yield has been pushing back toward 5%, a level that has repeatedly rattled equity valuations in recent cycles.

Meanwhile, the inflation backdrop is tightening. Consumer Price Index data for April showed headline inflation at 3.8%, within striking distance of what Hartnett flagged as a historically unfriendly threshold for stocks. When CPI has crossed 4% in past cycles, the S&P 500 has averaged losses of roughly 4% over the following three months and close to 7% over six months, according to BofA data.

What History Says About Big Listings

BofA’s own review of the largest IPOs in market history offers a more nuanced picture. Some debut listings extended existing rallies. Others arrived near softer stretches. Several barely registered in the broader index at all. The listing itself is not a reliable signal. The macroeconomic environment surrounding it is what matters.

A successful SpaceX debut in June could absolutely keep the AI trade alive. But if inflation continues its climb above 4% while long-end yields grind higher, the market may face an uncomfortable question. Investors will have to decide how much they are willing to pay for growth that remains years away in a world where waiting has a real and rising cost.

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