Bank of America warns mega IPOs could weigh on the market

Bank of America says upcoming large initial public offerings from SpaceX and Anthropic could create pressure on U.S. stocks rather than support the market. The bank argues that a wave of new share issuance may reduce some of the scarcity that has helped fuel the recent bull run. According to the report, the market has benefited in recent years from fewer publicly traded companies, strong buybacks, and long periods of private funding before companies list. A surge of new listings could reverse part of that dynamic by adding supply and prompting investors to rebalance portfolios. The note also points to the market’s heavy dependence on a small group of megacap technology stocks, especially the socalled Magnificent Seven. Bank of America said that large IPOs could force passive funds and other investors to free up capital, which may put downward pressure on existing holdings. SpaceX could reportedly go public as soon as June, while Anthropic may follow later in the year.