I think that OpenAI is going to have to reflect or show numbers that they are losing momentum fast, and that their decline in growth cannot justify the spending, the capex commitments they've made. You're going to see not only a momentum shift to Anthropic, but you're going to see that OpenAI is just a drunk spender, and their numbers will reflect that. And I think their CFO and the bankers came back and said, 'We need to get our house in order.' What does that mean? I think OpenAI is going to go through a pretty serious cost reduction effort over the last six months and clean up for it to then go public.
In today's office hours, we discussed the coming wave of AI IPOs, how to approach CEOs in person, and my experience with panic attacks. Question number one: our first question comes from a listener who emailed us. 'Hi, Scott. The overall stock market has held steady, but tech stocks have taken a bit of a beating. Based on things you've said, I'm thinking that some folks have pulled money out of their tech stocks to invest in SpaceX. If this is the case, do you think the trend will continue with the Anthropic and OpenAI IPOs? And if so, what do you think the overall effect will be on tech stocks for the rest of the year and maybe into next? Could this be a tipping point that finally causes many tech stocks to really fail?'
Okay, just some data on SpaceX. The IPO price at $135 a share, opened at 150. I think it peaked at about 210 or 230, reaching a $2.88 trillion market cap. That momentum did kind of come back. The stock has fallen every trading day since hitting its peak. In a single day, SpaceX shed $400 billion in market cap, making it the second-largest one-day wipeout in stock market history. But again, off an enormous base. By Friday, June 26, shares closed at $153, reducing the company's market cap to about $2 trillion. In less than two weeks, investors have watched nearly $750 billion disappear. Even after slight gains, the stock remains more than 30% below its high. The reality is it's still above its IPO. And it went way up and it's come down, but it's still an enormous success story. And the reason it's lost $600 billion is because it had a $2.5 trillion market cap to begin with.
So you'd think that its weak aftermarket performance could make boards and underwriters more cautious about timing. I don't know. Is that true? They got a pop. Basically, your IPO is a branding event, a once-in-a-lifetime branding event. All people cared about was that it was up. That gets enormous news. And essentially, JPMorgan and Goldman Sachs are now really not bankers, they're engineers. And that is, they engineer scarcity and manufacture scarcity such that these things get 20%. I literally predicted it would get a first-day pop of 20%. I think it was up 21 or 23.
So, some of the most recent valuations by companies that have confidentially filed for their IPO: OpenAI at $850 billion, Anthropic at $965 billion, which is incredible that there's been such — I call it the flipping. SpaceX's weak aftermarket performance could make boards and underwriters more cautious about timing OpenAI and Anthropic's IPOs. Is that true? I'm not sure. I think it probably encourages them. If SpaceX can go out at 110 times revenues, you're going to love Anthropic at 40.
On Thursday, June 25th, the New York Times reported that OpenAI may delay its IPO until 2027, citing market volatility and SpaceX's post-IPO decline. I think that's a lie. I think that OpenAI is going to have to reflect or show numbers that they are losing momentum fast, and that their decline in growth cannot justify the spending, the capex commitments they've made. You're going to see not only a momentum shift to Anthropic, but you're going to see that OpenAI lacks — I wouldn't call it business discipline, but it's just a drunk spender, and their numbers will reflect that. And I think their CFO and the bankers came back and said, 'We need to get our house in order.' What does that mean? I think OpenAI is going to go through a pretty serious cost reduction effort over the last six months and clean up for it to then go public.
The Wall Street Journal projects Anthropic could go public as early as this fall. How are these IPOs expected to impact the market? Before SpaceX went public, senior research analyst at PitchBook, Harrison Wolf, predicted pension funds, sovereign wealth funds, and large-cap growth mandates will need to fund IPO allocations by selling Nvidia, Microsoft, Google, and Meta, suggesting that participation in these large IPOs may come at the expense of existing big tech holdings. So, I think it's more likely that you're going to see pressure on Bitcoin, because I think a lot of the people who want to be part of this generation of innovation are the same people who've piled into crypto, and they're going to pile out. Crypto, I think, is off 50% from its high. I think it's going to come under further stress the rest of the year.
Research from investment advisory firm GMO found that every 1% increase in the market cap in a given month has historically been associated with a 7 to 12% decrease in the stock market's subsequent 12-month return. In sum, we're in 99. We're firmly a 99 now, and typically returns for the next several years aren't very good. The problem is, sometimes or oftentimes when guys like me say we're 99, we're actually a 97, and the NASDAQ doubles from here.
If you apply that historical relationship with the anticipated combined size of the SpaceX, OpenAI, and Anthropic IPOs, which represent approximately 5% of publicly traded US equity once they're listed, we could see a 40% decline in the broader stock market over the next year, one, three, or five years. The problem is timing. And that leads me to: what do you do? The reality is I think it is very hard to time the markets. And if you try and sell and get back in, that's hard, because when you sell, if you're fortunate to have experienced gains, you're going to pay taxes, and then you effectively have to buy back in at, you know, 23% less just to break even, because you're triggering a tax event. It's also very hard to time the market.
So, what do you do if you think that the US market and the NASDAQ and AI stocks are overvalued? Just make sure you're really well diversified. And diversification is taking on a new meaning, because you're no longer diversified when you're just in the S&P, because 40% of the S&P is just 10 companies. So, what I tell people to do is not to try and time the markets, but to make sure they're diversified across asset classes. You can start looking at fixed income again, which is actually paying you for some risk, and more importantly, across geographies. You know, I've been investing, divesting some of my US holdings and going into Europe, because Europe's been sort of left for dead, and I find that's when you buy. When the Florida real estate market was left for dead, that's when you moved in. So, do you try and time the market? Good luck with that. What I would say is look at your portfolio and decide where you are way too concentrated, and think about diversifying.
But again, are we in 97 or 99? I think the answer is yes. And as my friend Barry Ritholtz said at Ritholtz Capital Management or Ritholtz Advisers — anyways, hedge fund — if you just bought stocks on the day they hit all-time highs, you would have beaten the market. That there's something to the momentum here. There have been some losses around big tech. Apple had its worst trading day of 2026 after they announced price increases. Alphabet fell 7%, Meta dropped 5%. But again, all roads lead to the same place here: low-cost index funds. Look at your total net worth. And the older you get, the more diversified you want to get. And also, as you have more and more gains, you want to pull your horns in and diversify even more.
So, I've been rich three times, which means I've lost it twice. Why did I lose it? Were my businesses bad businesses? No. I didn't learn the key to maintaining wealth, and that is diversification. Thanks for the question.
Support for the show comes from IM8. Every day it seems like there's a new fad diet that wants to tell you what to cut out and what to add in. But before you go and fill your fridge with beef tallow and salmon skin, ask yourself if you're actually getting the full scope of vitamins and minerals you need in a day. Here's a tip to help you fill in the gaps: IM8's Daily Ultimate Essentials drink. IM8 uses clean ingredients. It's NSF certified, which means all the ingredients are third-party tested for purity. Our colleague Eden has been enjoying IM8. Ed, I...
