Analysis: The SpaceX IPO Will Not 'Break' the Bull Market, But Investors Worry About Tech Stock Rotation and the Subsequent Surge in AI Funding

June 11. Wall Street broadly believes the stock market has the capacity to absorb the additional supply from SpaceX’s upcoming IPO, though investors remain wary of potential volatility tied to more large AI-focused IPOs and financing frenzies, per CNBC. Data from Gavekal Research shows that over the 12 months ending September 2025, S&P 500 companies collectively issued roughly $1.7 trillion in stock—equaling about $140 billion per month. The firm notes SpaceX’s expected $75 billion fundraising is only slightly larger than U.S. stock market dividend payouts over a little more than two weeks. Against the full scope of the U.S. stock market, these issuances are “surprisingly easy to digest,” meaning any drag on U.S. stock performance from short-term liquidity withdrawal should be temporary. It’s not just SpaceX: peers including Anthropic, OpenAI, and Alphabet are also pursuing public market financing. Combined, the four firms plan to raise roughly $380 billion—about two months of typical monthly stock issuance. Still, IPOs inherently carry higher volatility. Truist Wealth’s review of 30 major IPOs over the past 15 years found newly listed stocks often decline and see sharp pullbacks in their first year post-launch: the median drop one year after listing hits 9%, while the average maximum retracement in that period stands at 54%. SpaceX’s IPO could also spark rotation in tech stocks, as investors sell existing high-performing holdings to grab new offerings. Similar shifts have already emerged this week: traders are moving away from red-hot chip stocks to defensive sectors like consumer staples. Compounding volatility, changes to Nasdaq rules may amplify price swings. When SpaceX joins the Nasdaq 100 index, its weight won’t be calculated only on its $75 billion tradable float—instead, a 3x multiplier will apply, effectively valuing it at a $225 billion market cap for index weight purposes. That means post-IPO price movements could be magnified by passive funds chasing index inclusion. Retail participation in SpaceX’s IPO is unprecedented. Jay Woods, chief market strategist at Freedom Capital Markets, warns this could leave many investors with a negative experience, calling SpaceX “not a lottery ticket” but a long-term investment that needs time to deliver on its valuation.