Mega-Cap Tech IPOs Including SpaceX Could Signal Market Top, Strategists Warn

A flurry of initial public offerings from mega-cap companies this year could mark the top of the market, strategists said, drawing parallels with the late-1990s dot-com bubble.

SpaceX's hotly anticipated IPO, confirmed in a regulatory filing on Thursday and expected on June 12, could mark the largest float in history. Elon Musk's firm is targeting a valuation of $1.75 trillion on the Nasdaq.

Meanwhile, OpenAI and Anthropic have also announced their intentions to go public later this year.

All three companies are yet to generate an annual profit, though Anthropic is expected to post its first-ever profitable quarter in its upcoming earnings.

But analysts regard each firm's business model as opaque, leading some to urge caution from investors looking to buy at IPO.

"I see it as a market top," John Blank, chief equity strategist at Zacks, told CNBC's Squawk Box Europe on Thursday.

"Everybody knows the top is pretty close to being around and usually it is advertised by these giant IPOs. Back in 1999, we saw the same kind of thing where people were just rushing to get these IPOs out."

SpaceX recorded a net loss in the latest quarter of $4.28 billion after losing $4.94 billion in 2025.

Its Starlink arm generated $3.26 billion in revenue in the latest quarter, accounting for 69% of the total. Its space business lost $619 million on an operating basis, while its AI unit lost $2.5 billion — meaning connectivity is the only profitable part of the company.

Crucially, SpaceX wrote in its S-1 filing on Thursday that it has "a history of net losses and may not achieve profitability in the future."

Much of its value relies on success in developing various technologies that are "novel and untested", and SpaceX expects to "incur significant capital expenditures over a period of years" before its AI products and services become profitable, according to the document.

Dan Coatsworth, head of markets at AJ Bell, said "little is known" about SpaceX's financials due to its status as a private company, with Elon Musk controlling 85% of the voting rights. Coatsworth flagged the potential for an eye-watering valuation as a potential risk to the upside.

"A $1.75 trillion valuation would put SpaceX on 67 times sales, three times as much as Nvidia's rating based on its past financial year and latest share price," he added. "It implies SpaceX's valuation could be richer than a plate of dauphinoise potatoes."

SpaceX considers OpenAI a key rival in the race to dominate artificial intelligence, with Sam Altman's firm also racing to list on public markets later in 2026.

But OpenAI is also yet to make a profit, leading some investors to question the potential for a wider fallout in stock markets should the company continue on that path.

"If OpenAI and Anthropic can't make money, this whole thing falls apart," William de Gale, portfolio manager at BlueBox Asset Management, told CNBC on Wednesday.

"You could get OpenAI deciding to IPO itself in a couple of months, giving us the information that we realise it's never going to make money, and that could be the end as well," he added.

"I'm not saying that is the case, but that's another possible, much quicker route to a ceiling on this growth."

Deutsche Bank also cautioned on transparency in a note published on Thursday.

"It has yet to be seen how public markets will value OpenAI and its peers once they open up their financial statements to scrutiny and explain the still little-understood economics of their business models," wrote Deutsche thematic research strategist Adrian Cox.