Grantham: Megacap IPOs Could Derail S&P 500
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- Jeremy Grantham, co-founder of GMO, predicts at least two of OpenAI, Anthropic, and SpaceX will go public in 2026, and says the resulting IPO "excitement" will likely put pressure on the U.S. market later in the year.
- GMO's historical analysis shows a 1% increase in stock market total market capitalization because of IPOs corresponds to a 7.5% decrease in the market's subsequent 12-month return.
- The U.S. stock market's total market cap is approximately $50 trillion, meaning a 1% increase would require an IPO of at least $500 billion—a threshold the named AI and space companies would meet or exceed based on recent private valuations.
- Grantham has been bearish on U.S. stocks for more than a decade and has so far been wrong, but he was early in forecasting both the bursting of the internet bubble and the global financial crisis bear market.
- NYU professor Scott Galloway said in a recent podcast that OpenAI's IPO could get "pulled" amid a recent tech selloff and renewed AI scrutiny, which would defuse Grantham's IPO-specific thesis.
- If the megacap IPOs don't materialize, the article notes the irony that Grantham's latest argument—advanced by an inveterate bear—would carry bullish implications, though Grantham himself would not turn bullish due to other concerns.
Why it matters: GMO's 1%-for-7.5% historical ratio means a single $500 billion-plus IPO could meaningfully drag on S&P 500 returns over the following year, reshaping how fund managers position for 2026's second half. With at least two of OpenAI, Anthropic, and SpaceX potentially going public, the total drag could compound—turning what looks like a liquidity event into a multi-trillion-dollar supply overhang for existing shareholders looking to monetize.
