Should You Buy SpaceX, OpenAI, or Anthropic When They Go Public?
Few investment topics have generated as much excitement recently as the anticipated IPOs of SpaceX, OpenAI, and Anthropic.
For many investors, these companies represent some of the most innovative businesses in the world. SpaceX has transformed commercial space travel. OpenAI has become synonymous with artificial intelligence through ChatGPT. Anthropic has emerged as one of the leading competitors in the rapidly evolving AI marketplace.
The excitement is understandable.
What makes these upcoming IPOs different from most public offerings is their potential size. Reports suggest SpaceX could enter the public markets with a valuation approaching $2 trillion, while OpenAI and Anthropic may eventually command valuations exceeding $1 trillion.
If those estimates prove accurate, these companies could become some of the largest publicly traded businesses in the world almost overnight.
At Proper Wealth, we’ve received numerous client questions about these upcoming IPOs. Some investors are eager to gain exposure. Others are concerned about valuations, market concentration, and how these companies may affect index funds and portfolios.
The reality is that while these IPOs may be historic, the investment questions surrounding them are not new, which we’ll explore in this article.
Does Being a Great Company Automatically Make It a Great Investment?
Not necessarily. A company’s products, market position, and popularity are only part of the equation.
The price you pay for ownership matters just as much. Even exceptional companies can produce disappointing investment returns if expectations and valuations become too high.
One of the most common investing mistakes is confusing a great company with a great investment.
Think about buying a home in Tallahassee. You may find the perfect property in the perfect neighborhood. It has everything you’re looking for and is likely to remain desirable for years to come. But if the asking price is dramatically higher than comparable homes in the area, the investment potential changes.
Stocks work much the same way.
The quality of the business matters. The price you pay matters too.
This distinction becomes particularly important during highly publicized IPOs because investor enthusiasm can push valuations to levels that may already reflect years of future growth.
Rather than asking: “Is SpaceX a great company?”, the better question is:
“Is SpaceX a compelling investment at the price being offered?”
Those are very different conversations.
What Has History Shown About IPO Performance?
Many investors assume that getting in early on a newly public company creates an automatic advantage, but history suggests otherwise.
Consider two of the most recognizable IPOs of the last twenty years.
When Facebook (now Meta) went public in 2012, investor excitement was tremendous. Yet the stock declined more than 50% within months before eventually recovering.
Uber experienced a similar experience. Following its IPO, shares fell roughly one-third from their initial offering price and remained below their IPO level for an extended period.
While these examples receive considerable attention, broader research paints an even more compelling picture.
Research examining IPO performance between 1980 and 2024 found that newly public companies underperformed comparable publicly traded companies by roughly 2% annually during the five years following their IPO.
This doesn’t mean every IPO performs poorly.
Some eventually become outstanding long-term investments.
However, the research suggests investors should be cautious about assuming that media attention and brand recognition automatically translate into superior returns.
Why Do IPOs Often Underperform?
There are several potential explanations.
- Lock-Up Expirations: Following an IPO, company founders, executives, and early investors are often prohibited from selling their shares immediately. These restrictions are known as lock-up periods.
Once those restrictions expire, additional shares may enter the market. This increase in supply can create downward pressure on stock prices.
- Elevated Expectations: Many IPOs enter the market with extremely optimistic growth expectations already reflected in their share prices. Investors are not paying for current results alone.
They’re often paying for what they believe the company may become in the future. When future growth falls short of those expectations, stock prices can struggle.
- Profitability Concerns: One of the most interesting findings in IPO research concerns profitability. A surprisingly large percentage of companies entered public markets without positive earnings. Research shows that many IPOs historically came to market with negative trailing twelve-month earnings.
Imagine purchasing a rental property without knowing how much rent it generates. You may love the property itself, but understanding the economics remains important. The same principle applies to public companies. You should evaluate not only growth potential but also profitability, cash flow, and overall financial strength.
Will SpaceX Be Added to the S&P 500 Immediately?
No. Even if SpaceX becomes one of the largest public companies immediately after its IPO, it is not automatically added to the S&P 500. In fact, S&P Dow Jones recently decided not to change its rules to fast-track SpaceX into the index.
For inclusion in the S&P 500, a company generally must:
- Be publicly traded on a major U.S. exchange for at least 12 months.
- Have sufficient public float (shares available for public trading).
- Meet liquidity requirements.
- Be profitable under GAAP in the most recent quarter and over the trailing four quarters.
- Be selected by the S&P Index Committee. Inclusion is not purely formula-based.
The biggest hurdle for SpaceX appears to be profitability. Reports indicate the company posted a GAAP loss in 2025, which would make it ineligible under current S&P 500 rules.
The earliest realistic path to inclusion would be:
- Complete the IPO.
- Trade publicly for at least one year.
- Meet the profitability and float requirements.
- Be selected by the index committee.
Based on current reporting, the earliest potential inclusion is likely mid-2027, assuming those requirements are met.
One interesting wrinkle: SpaceX may enter other major indexes much faster, including the Nasdaq-100 and certain MSCI and FTSE Russell indexes, because those providers have adopted more flexible rules for very large IPOs.
For investors, that means broad total-market funds may gain SpaceX exposure sooner than S&P 500-tracking funds.
How Could These Mega-IPOs Affect Index Funds?
This is one of the most overlooked aspects of the upcoming IPOs.
When a company is added to a major benchmark index, index funds tracking that benchmark must purchase shares. Potential buyers may include:
- Vanguard index funds
- Fidelity index funds
- BlackRock iShares funds
- Other passive investment vehicles
This creates a situation where a large number of buyers enter the market simultaneously.
When forced buyers compete for a limited supply of shares, prices can temporarily rise. Researchers and institutional investors have discussed this phenomenon for years.
This doesn’t necessarily mean the stock is overpriced.
It simply means index inclusion itself can create unique pricing dynamics that investors should understand.
Will SpaceX Become One of the Largest Holdings in My Portfolio?
Not necessarily. Many investors assume that a $2 trillion valuation automatically translates into a massive weighting within index funds. However, most indexes rely on free-float market capitalization rather than total company valuation.
Free float refers to the shares actually available for public trading.
If Elon Musk and other insiders continue to hold a large share of the company’s stock, the public float may represent only a small portion of the company’s total value. As a result, SpaceX’s weight in broad market indexes may initially be much smaller than investors expect.
What Should Long-Term Investors Focus On Instead?
The anticipated IPOs of SpaceX, OpenAI, and Anthropic are fascinating developments.
They may become defining moments in financial market history. But successful investing has rarely been about chasing headlines.
At Proper Wealth, we believe investment decisions should be evaluated within the context of a broader financial plan. That often means focusing on:
- Diversification
- Asset allocation
- Risk management
- Tax efficiency
- Long-term objectives
- Valuation discipline
Whether evaluating a newly public company or one that has traded for decades, the same principles generally apply.
The goal isn’t simply to own exciting companies.
The goal is to build a portfolio aligned with your financial goals, time horizon, and risk tolerance.
How Proper Wealth Can Help You Navigate Mega IPOs
SpaceX, OpenAI, and Anthropic have captured the attention of investors worldwide.
Their IPOs have the potential to reshape benchmark indexes, influence portfolio allocations, and generate significant media coverage for years to come.
However, investing success is rarely determined by being first. Instead, it often comes from maintaining a disciplined process that emphasizes sound fundamentals, thoughtful portfolio construction, and long-term decision-making.
At Proper Wealth, we believe that before you make investment decisions based on excitement surrounding any IPO, it may be worth asking a simple question:
How does this investment fit within my overall financial strategy?
For many investors, that question may ultimately be more important than the IPO itself. If you’re ready to discuss investment strategies for your financial future, let’s connect.
Frequently Asked Questions About SpaceX, OpenAI, and Anthropic IPOs
Should I buy SpaceX stock on the first day of trading?
Not necessarily. While high-profile IPOs often generate significant excitement, first-day trading can be highly volatile. In many cases, investors rush to buy shares, pushing prices well above the company’s initial offering price. History shows that some IPOs continue to climb after launch, while others experience sharp declines once initial enthusiasm fades. Before investing, it may be worthwhile to evaluate the company’s valuation, financial performance, competitive position, and how the investment fits within your broader portfolio strategy.
Are IPOs riskier than established stocks?
They can be. Newly public companies often have shorter public track records, less historical financial data available to investors, and greater uncertainty regarding future growth. Because the market is still determining an appropriate valuation, IPO shares may experience larger price swings than mature companies with established earnings histories. Investors should understand that potential opportunities and risks often increase together when evaluating newly public companies.
Why do many IPOs decline after going public?
Several factors can contribute to post-IPO declines. Initial excitement may drive prices higher than the underlying fundamentals support. Over time, investors begin to evaluate actual earnings, revenue growth, and profitability rather than relying solely on future expectations. Additionally, lock-up expirations may increase the number of shares available for sale, creating downward pressure on stock prices. Changing economic conditions, interest rates, and market sentiment can also affect newly public companies.
Will SpaceX automatically be included in the S&P 500?
No. Inclusion in the S&P 500 is not automatic. Companies must meet specific criteria, including public float requirements, liquidity standards, profitability thresholds, and minimum trading history. Even if SpaceX becomes one of the largest publicly traded companies, the S&P Index Committee ultimately decides when and whether to add a company. As a result, inclusion could occur months or even years after an IPO.
How much exposure to SpaceX will my ETF have?
That depends on the ETF and the index it tracks. Broad-market funds, total stock-market funds, and growth-oriented indexes may eventually include SpaceX if it meets the eligibility requirements. The percentage allocated to SpaceX would depend on its market capitalization, public float, and the index provider’s methodology. Some investors may discover they already have indirect exposure through diversified funds without purchasing individual shares.
What is a lock-up expiration?
A lock-up expiration is a predetermined date following an IPO when company insiders, executives, employees, and early investors are permitted to sell shares that were previously restricted. These periods often last 90 to 180 days after the IPO. When large numbers of shares become eligible for sale, the increased supply can put downward pressure on stock prices, particularly if insiders sell significant portions of their holdings.
What is free-float market capitalization?
Free-float market capitalization measures the value of shares that are actually available for public trading. It excludes shares held by founders, executives, governments, or other controlling shareholders who are unlikely to trade regularly. Many stock indexes use free-float market capitalization rather than total market capitalization because it more accurately reflects the shares available to investors in the public market.
Are AI companies overvalued?
There is no universal answer. Some investors believe artificial intelligence companies deserve premium valuations due to their potential for growth and transformative impact across industries. Others argue that expectations may exceed future financial results. Ultimately, valuation depends on factors such as revenue growth, profitability, cash flow generation, competitive advantages, and the company’s ability to translate innovation into sustainable business performance.
Can I buy SpaceX before its IPO?
Most individual investors cannot directly purchase shares of private companies before an IPO. Access is often limited to institutional investors, venture capital firms, accredited investors, company employees, and certain private market participants. While some secondary marketplaces offer limited access to private company shares, opportunities can be restricted and may involve additional risks, fees, and liquidity limitations.
Should retirees invest in IPOs?
That depends on your financial goals, risk tolerance, income needs, and overall retirement strategy. IPOs can offer growth potential, but they may also be volatile. For retirees who rely on portfolio income or who have limited ability to recover from large market declines, concentrated positions in newly public companies may introduce additional risk. Any IPO investment should be evaluated within the context of a well-diversified portfolio.
Are index funds required to buy newly added companies?
Generally, yes. Index funds are designed to track specific benchmarks as closely as possible. When a company is added to an index such as the S&P 500, index funds tracking that benchmark typically purchase shares to maintain alignment with the index. This can create significant demand for newly added companies and may influence short-term trading activity around inclusion dates.
What should investors evaluate before buying an IPO?
You may benefit from looking beyond headlines and media attention. Important considerations often include the company’s valuation, revenue growth, profitability, competitive position, management team, cash flow, debt levels, and long-term business prospects. It is also important to evaluate how the investment fits within your existing portfolio rather than making a decision based solely on excitement surrounding the offering.
Could OpenAI and Anthropic eventually become major index holdings?
Potentially. If either company eventually becomes publicly traded and reaches a substantial market capitalization, they could become significant components of major stock indexes. However, future index weighting would depend on factors such as public float, market value, profitability, liquidity, and the methodology used by index providers. Similar to today’s largest technology companies, future AI leaders could represent meaningful portions of broad market indexes.
What is the biggest mistake investors make with IPOs?
One of the most common mistakes is allowing excitement and media coverage to overshadow fundamental analysis. Investors may focus on a company’s popularity, innovative products, or future potential while overlooking valuation, profitability, competitive risks, or realistic growth expectations. Successful long-term investing often requires separating enthusiasm from disciplined decision-making and evaluating whether an investment aligns with your overall financial objectives.
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