IPO Market Outlook 2026: What the SpaceX Era Means for Financial Advisors

Adam Turnquist [0:01] History has taught us some important lessons about IPOs. And the one-liner here expect volatility. Well, we don't think it's the.com era. There's a lot of investor excitement right now. And as there should be, we are in a bull market and we have this transformative technologies really reshaping how we think about the world, how we leverage data, how that's gonna impact the economy.

Taryn Huett [0:29] Hello and welcome to If you Could with Matt and Taryn. I'm Taryn Huett. And

Matt Enyedi [0:33] I'm Matt Enyedi. How you doing today, Taryn? Hey, doing

Taryn Huett [0:35] Good.

Matt Enyedi [0:36] What's going on?

Taryn Huett [0:37] Hi. You know what? It's been busy,

Matt Enyedi [0:38] Very busy, and the headlines are hot across the board. In fact, I don't even know what we should cover.

Taryn Huett [0:44] I mean, I feel like we could cover a whole host of topics between Iran. I don't know, you've been watching the World Cup. I mean, the headlines are hot, perhaps even hotter than a hotdog with habaneros, huh? That's a

Matt Enyedi [0:55] Heat we don't see too often. That's crypto hot. That's, and I agree, we are at that level of heat, but in this industry, there is one headline that stands above them all because we have officially seen the countdown hit zero. SpaceX has lifted off, and Wall Street may never be the same.

Taryn Huett [1:11] Never be the same. No kidding. A record breaking $70 billion offering and a $1.7 trillion valuation. It wasn't just big. It absolutely is changing the game.

Matt Enyedi [1:22] Changing the game and the game's just getting started. Taryn, because right on the heels of this, we've got OpenAI, we've got Anthropic all set to go public later this year. It's an IPO market like we haven't seen in decades and folks are excited. But I gotta tell you, I'm a little nervous 'cause I've seen this play before. At least I think I have. And I guess the question is, are things really different this time or are we about to have another very expensive lesson on the difference between hype and reality?

Taryn Huett [1:49] You know, time is ultimately gonna tell, but ahead of that, we're gonna explore that question and more with LPL Research's chief technical strategist, Adam Turnquist. Adam is a key contributor to the overall strategy of our technical focus portfolios and delivers market insights and technical strategies across asset classes. You've probably seen 'em on CNBC or Bloomberg TV. I mean, he brings 20 years of investment experience to his role at LPL and we're excited to dive into the world of IPOs and just so much more with him today.

Matt Enyedi [2:21] 5, 4, 3, 2, 1.

Taryn Huett [2:26] Is that the launchpad, Matt? It is. Alright, let's go.

Matt Enyedi [2:28] Here we go. Adam Turnquist, welcome to if You Could with Matt and Taryn. We are so glad to have you.

Adam Turnquist [2:38] Hey, I'm excited to be here. Thanks for the opportunity.

Matt Enyedi [2:41] Adam. We are gonna talk all thing IPO, all things SpaceX and everything that's to come this summer, but I like to ground things in some historical context. So let me take us back in history and talk a little bit about the IPO markets and what they've meant to overall investing. Honestly, since the inception, you actually have to go back to 1602 to the first IPO, which was to the Dutch East India company. And that was not only the first IPO, it created the first exchange, which was the Amsterdam stock exchange. And it also created the very first frenzy and the very first bubble. And 35 years later led to the tulip crisis and the tulip explosion and took down our first big bubble. Our first big IPO shock. Now, most of us, including me, Taryn, weren't alive for that and probably don't remember it, but there's one, I think almost all of us remember, which was the.com bubble of 2000 where the markets peaked in March of 2000.

Matt Enyedi [3:38] Uh, I think the kind of seminal moments are kind of the telling sign of that where companies like pets.com that probably told us the froth had turned into an outright bubble and a year later the markets are down more than 80%, or at least the NASDAQ is. And so lots of hype, uh, lots of run, and then ultimately lots of pain. And so if we think about that historical context and now we think about where we are today, Adam, I think my first question's gonna be is where are we today? Is this the beginning of something big? Are we in the middle of something that's happening and hot or is this a signal of the end? Well,

Adam Turnquist [4:12] We don't think it's the.com era. There's a lot of investor excitement right now. And as there should be, we are in a bull market. We've been in a bull market for four and a half years now. We've had above average type returns with relatively low volatility. And we have this transformative technologies really reshaping how we think about the world, how we leverage data, how that's gonna impact the economy and spending. So it's a super exciting time for investors right now. And the next sequence is the IPO market where we're starting to see some of these privately held companies like SpaceX, Andro, OpenAI come to market at massive valuations, record setting valuations in, in terms of their overall market cap. And that's bringing a lot of parallels and analogs back to the nineties. But I, I do think context is key as you highlighted some context.

Adam Turnquist [5:01] Going back to Tulip mania, we don't think it's tulip mania. When you look at the companies that are coming public now versus call it the.com era, they've been private for much longer. In fact, last year, the average age of a company that went public was 12 years. The year before that, 14 years old, if you go to 99, 2000 companies were on average four and a half years old. Wow. And with private equity really supporting the growth of these companies, they're coming to market with revenues,  importantly, that was wasn't something we saw in the nineties. They were pre-revenue companies and a lot of speculation about when those revenues would come. And they're also coming with a customer base, established customer base in a much clear path to profitability. So I get the analogs, the excitement and the parallels to the nineties, but we do think the quality of companies coming public now look a lot different. It

Matt Enyedi [5:55] Is. I, I guess a a little bit heartening to hear that this doesn't feel like party like it's 1999, the party of 26 looks, looks and feels a little different.

Taryn Huett [6:05] Adam, I wanna pull on some things that you said. You know, you talked about how companies today are private for much longer, and it's striking how much more mature companies are, but the time they go public today compared to the.com days, beyond just when to go public. I'm really interested in the why they go public. I would love if you could unpack a bit of that. What are the real drivers behind that decision? And really when you look at it, how can you tell when a company is going public for the right reasons versus the wrong reasons?

Adam Turnquist [6:37] So at the core of going public, it's really about a capital raise. A company needs money to expand in and really support their growth. And that's really at the heart of an IPO in a good case scenario, right? And it also introduces liquidity. So these companies have been private for a number of years. So existing shareholders have an exit plan now they can actually profit off their long-term investment in private equity and use the public market for that liquidation or liquidity. And also helps even for companies to expand. So if they're gonna buy out another company, they can go to the public market versus the private market and use the existing share base to finance that instead of maybe a more costly or more structured private equity deal. So that's kind of the core behind why companies go public.

Taryn Huett [7:27] You've mentioned SpaceX and I want us to get there. Before we get there, I wanna sit in here a little bit longer. And Matt, I wanna bring you into this because you've been through this with LPL. I mean, we as a firm just celebrated 15 years last year as a public company. Why don't you take us back to that time, you know, what was driving that decision for LPL and how did we think about that opportunity for us as a firm?

Matt Enyedi [7:52] Yeah, look, I was a little bit more junior at the time, but I remember it well. And a lot of it resonates with what Adam just said. The company was growing quickly. In fact, if I do a little bit of a history lesson, once again, historian more history.

Taryn Huett [8:04] That's not

Matt Enyedi [8:05] Like you, the only thing new in this world is the history. You don't know folks. Look, 2005, our founder, Todd Robinson, sold the company to two private equity companies. And five years later, 2010, they were looking to do a couple of things. One is, yes, PE firms need to get a return to their shareholders, and the average fund is about five to seven years. So they're hitting that point. But two LPL was growing very rapidly. LPL, like these companies needed access to permanent capital to drive that growth, whether it be m and a or investments into technology. And so the public markets made a lot of sense, and I would argue pretty strongly it was a company going public for the right reason. And it has had a very large impact on the ability for LPL to compete and become a scaled player in this space.

Taryn Huett [8:48] So definitely one of those good reasons to go public.

Matt Enyedi [8:51] Let's turn to today's marketplace and dive a little bit more deeply into SpaceX because Adam SpaceX is unlike anything any of us have ever seen before. Again, a little context prior to SpaceX, the largest initial public offering ever was Saudi Aramco at about $29 billion. SpaceX blows that away by almost three x and goes out at $70 billion with a 1.7 trillion valuation. And I guess the question I have for you is, similar to the question Taryn had on a more macro scale, is why now? Why did SpaceX decide to go public now and what does it mean?

Adam Turnquist [9:25] So it means we now have a new trillionaire  with Elon Musk, but they're coming to the market really to fund growth. And it relates to their three different businesses. They have their space business. We heard Elon Musk talk about via tweet or X that rockets are hard and it costs a lot of money to build rockets. In fact, they've spent about $15 billion developing their Starship rockets that brings massive payloads into space. So that's one of their core businesses. They also have their starlink business. There's about 10,000 different starlink satellites floating around above us right now with 10 million customers. That's really the profit engine of SpaceX and helping fund some of their other operations. But when you look at their AI business or xai or GR business, that's really where the funding is needed. They're spending, at least this year, they've carved out about $20 billion in capital expenditures to build that business or grow that business.

Adam Turnquist [10:20] And that number is gonna continue to grow. When you look at their total addressable market that they outlined in their, their S one filing, they had 26 and a half trillion dollar addressable market that would essentially mean SpaceX takes over every software company. And that's their goal. Of course, we don't think that would be the most likely scenario, but they're trying to make inroads with ai. And importantly, they're trying to bring that data infrastructure into space. And I think there's gonna be a lot more spending to go on that AI business. That's where it's gonna be more competitive. When you have anthropic, you have open ai, you have Alphabet and a host full of other names competing in that space, there's not much of a moat. This space business has a moat. It takes roughly around 10 years to build a a viable space business, if you will. So it's gonna be a pretty competitive area and I think that's where the market will focus on that AI business. What's the growth, what's the path to profitability there and what, what's the return on investment? And I think that's gonna be the question going forward from an investor standpoint.

Matt Enyedi [11:22] Yeah, so let's, let's sit on this IPOA little bit more because it's not only huge, not only the biggest ever, but the IPO itself is very interesting because historically IPOs are heavily institutionally based. And the musk effect on this one is a little bit different. And you've got massive retail exposure. And while that feels a little bit like democratization, and maybe it is, it also feels like a lot of volatility could come with it as well. And maybe along with it, a level of hype, a level of hyperbole that leads to, I was saying to Taryn earlier today, is this a space stock or is this a meme stock? Because are we gonna see that type of runup in the stock that is more about I want to be in it. And the FOMO drives a valuation that is already questionable outta place,

Adam Turnquist [12:05] Right? And there's definitely some fomo or fear missing out kicking in the amount of inbounds we've had asking about SpaceX. The valuations are hard to get your head around really. When you look at a company that did 19 billion in in revenue and a $5 billion loss last year trading at north of a $2 trillion market cap, I think you can easily make the case that that valuations are questionable. But you're really buying into this vision of Elon Musk and really delivering on not just the ai, but just space as a growth opportunity set. And that's gonna take time. And with time comes volatility as we reach or potentially reach some of those goals, we don't know how it's gonna play out. But we do know that history has taught us some important lessons about IPOs and the one-liner here expect volatility. Yeah. And that's what we've seen throughout history.

Adam Turnquist [12:54] We did some research on IPOs going back to 1995. So we incorporated the the.com era into that and, and all the way up to to last year. You look at the average return 12 months after an IPO and this, this is from the close of the first trading day. The average return is about 10% 12 months later. Yeah. But the median return is about negative 5%. So there's a big right tail distribution in the dataset where you have a small number of companies with extraordinary gains driving up the average. But for the median stock, you can expect at least throughout history, about a 5% decline. Typically, you see price gains on an average and median basis kind of in the 10 week window, and then momentum starts to slow down. And then about six months later, there's a big divergence with the average price progression outpacing the median progression.

Adam Turnquist [13:46] And that goes back to just the asymmetry and the distribution really where those few names are really driving up the average. And then the median starts to underperform. And what's noticeable is that divergence occurs at the six month mark, and that's traditionally the lockup expiration period where you get supply coming to the market for existing shareholders and they start selling stock and, and using that liquidity to exit their positions. And that's where you start to see it momentum really slow down for, we'll call it the median IPO price, right around that six month mark. So we'll be a close eye once those lockup expirations start to kick in after the first earnings report in August for SpaceX. So something to watch there in terms of the, the supply coming into market later this fall.

Matt Enyedi [14:29] Yeah, Adam, the data set that I saw this morning that kind of blew me away is currently there are about 640 million shares being traded. And beginning in August, we may get as many as 3.8 billion more shares into the float. And those are likely folks looking for liquidity, looking to make a profit. And so right now the market is flooded with almost buyers only, and we could see three, four times as many sellers enter the marketplace in that August time period. And then more unlocking throughout the course of the year,

Adam Turnquist [14:59] Right? It, it comes down to a supply and demand story for the investor. Right Now, if you're trading this right, you're more or less trading supply and demand versus the company and, and right now, obviously the demand outpacing supply, but that narrative can quickly change come August, September when some of these lockup expirations and they're tiered for SpaceX come to fruition, where you do have that massive amount of supply overhanging on the stock. So it's gonna be an interesting year, and I think it goes back to the original point I made expect volatility over the next year for SpaceX as as some of those lockup expirations kick in. And then of course, as the company starts to report earnings, they're gonna be heavily scrutinized at the valuations they're trading at right now. So it's, it's gonna be an interesting year to say the least.

Taryn Huett [15:41] So let's talk about SpaceX as a company as a whole. I mean, you mentioned it a little bit, but when you break it down, there's really three different businesses. There's ai, there's space exploration and satellite internet. And as of right now, satellite internet, the starlink component is the only profitable piece of SpaceX. The other two are just still highly speculative with no clear path to profitability at this point. So you have this dynamic where the valuation feels ahead of what the fundamentals might support. Meaning for this to really work, a lot has to go right. And so how should investors be thinking about something like this? I mean, how do you weigh that massive potential against the uncertainty that can come with all of that?

Adam Turnquist [16:29] I think it boils down to the investor timeline. So for the investors that are long-term, multi-year type investment horizons and believe in the story, really believe in Elon Musk executing on some of these goals that he has set, then you can ride out the volatility and look five, 10 years down the road and and see the growth potential. But for the investor out there on a shorter term basis, there's a lot of risk. As you mentioned, a lot has to go right when you're priced to perfection, which I think you can make the case with SpaceX, given the valuations right now, they need to really deliver and probably beat expectations at this point. And they haven't even reported earnings. But I think that's already priced in where they can't come in line with expectations for growth, especially as it relates to that AI business. They need to exceed any type of consensus estimates. That's the base case really for a lot of these companies involved in ai.

Matt Enyedi [17:22] Morningstar came out and did their initial valuation of SpaceX at around $780 billion, is what they believed the kind of fair value of the company was. And today we trade it three times that already. There's clearly a distinct difference between what the market or the street is willing to pay for the stock and what deep value players believe it's worth.

Adam Turnquist [17:42] Right? And, and you'll notice that the companies that are coming out with call it bearish price targets or underweight ratings on the company, were not involved in the IPO process. Wall Street is a business, right? , they had almost 30 different banks underwriting. You're not gonna see a lot of sell side analysts come out and put a sell rating on it, just given the business side of it. When you think about the fees that were generated from this IPO unprecedented in terms of those banking revenues. So you have to kind of read between the lines. Yeah. And some of these reports and look at, I think a wide set of forecasts and, and really I do think it really boils down to buying into the vision of Elon Musk being able to deliver one, maybe offsetting fact that is different this time versus we'll call it the, the nineties or the.com era is the fast inclusion into indices.

Adam Turnquist [18:33] So index providers like Russell and the NASDAQ change the rules for SpaceX. So the company can actually get on an index like the NASDAQ 100 in 15 days prior to waiting about a year. So that does introduce a new buyer set where there's actually forced buying into the market. For anyone that's tracking, for example, the NASDAQ 100 as a benchmark, you have to basically buy SpaceX just to match the index. It also introduces passive flows, which have become increasingly important for the market. So for anyone that's investing in one of the NASDAQ 100 ETFs, you're gonna own some degree of SpaceX once it gets included. And the only outlier here has been the s and p 500. They push back and, and stuck with their rule set. So for SpaceX to enter the s and p 500, it won't likely be until next year, there's some qualifying factors that they need to surpass to get on the index. But a lot of indices will have SpaceX as part of their component.

Taryn Huett [19:30] So we're talking about all the entry points and there is a lot of buzz about SpaceX, but in a few months that buzz is gonna probably shift to be talking about open AI and anthropic. And both those companies are targeting valuations near $1 trillion. And when you put that in context, US IPOs raised about $45 billion in all of 2025. And now SpaceX, OpenAI, and Anthropic alone could raise more than $200 billion in a single quarter. Adam, what does that all mean for investors and how should we be thinking about these next IPOs? Are they extensions of what we're seeing with SpaceX or some type of different opportunity and risks that might come with the timing of those? I

Adam Turnquist [20:17] Think it's really an extension with SpaceX being kind of a litmus test for the market and how well this supply is absorbed so far, so good, we'll call it. Yeah, we'll see how that plays out over the, over the summer, of course. And there's a lot of pressure for underwriters to support the stock. You have $2 trillion with anthropic and open AI coming to market. You wanna see this do well so that IPO window stays open for those companies. So there's gonna be institutional support for SpaceX just with the carrot of those other deals coming into the market this fall. I think that's an another maybe underappreciated support for a company like SpaceX going first, where you have that institutional side really remaining supportive of price action as reenter this, we'll call it price discovery phase of SpaceX over the coming months.

Matt Enyedi [21:06] Yeah, the folks who are pushing up SpaceX right now are likely folks who have a vested interest in open AI and anthropic doing well. And so the better SpaceX does, it's probably a good sign for their IPOs as well. And I wanna dig into that because we talked about the right reason, the wrong reason. There's something interesting that happening with Anthropic and open AI is they seem to be in their own little space race as to who goes first. And there is some talk of an advantage to first mover. And it seems like right now, anthropic probably goes first, but when you think about these two companies who are competitors going public, is there a first mover advantage? Is there one play that looks more interesting than the others? How are they thinking about their reasons and their risks of going public?

Adam Turnquist [21:50] Well, the reasons I think are the same as SpaceX. They have a massive amount of funding that they need to continue the AI arms race and build out data infrastructure in terms of first mover, if I were in Anthropic or OpenAI, I would want to go first, maybe let SpaceX test the water, and then I would want to go after that if successful, at least then you have a, a better sense of market demand and how well the IPO played out. So I, I don't know if I'd want to go last . I think just given there's some risk there, as I mentioned, we're four and a half years into a bull market. There's some macro risk in the market right now. So I'd wanna use that window to launch the IPO sooner than later. I think just given where animal spirits are in this market, where investor demand is, when you look at how well the deal with SpaceX and how oversubscribed it was, I think that's a pretty good sign that the market is ready and willing to participate in a upcoming IPO.

Taryn Huett [22:43] I'm gonna shift us a little bit closer to our clients. And you know, we're talking about all this hype. We're talking about some real innovative companies that are reshaping entire industries. I'm really curious how our clients should act in this moment. And more importantly, how they should show up for their clients who are eager to participate are demanding entry points.

Adam Turnquist [23:08] Patience is a virtue here with IPOs. There's a lot of speculation, there's a lot of froth around these IPOs as we talked about earlier. There's a lot of volatility that comes with it. And there's on average some pretty big drawdowns. So I think being patient and thinking longer term, maybe waiting a little bit for the dust to settle some of the, the excitement to fat a little bit would make sense in terms of an entry point. As I mentioned from a historical standpoint, IPOs tend to run about 10 weeks after they launch, and then momentum starts to slow down into that 26 week or six month mark. So I'd be looking at, at history as a guide here. I think going back to the, the line of, of patience is a virtue is, is a good starting point.

Taryn Huett [23:53] So Adam, we typically like to end every episode with an, if you could question, so Adam, if you could go back and look across the last couple decades of IPOs. I mean, Matt gave us the whole history lesson, so we got it broken down, but especially those ones with the most hype, what did we learn from them?

Matt Enyedi [24:12] And is it different this time? Are we talking tulips or are we talking time to party?

Adam Turnquist [24:18] We're not talking tulips. Although that would've been, uh, if you're gonna do the, the if you could, I think that would be a really interesting time to experience back in the 16 hundreds. But we do think it is different this time. That's every strategist, famous last words . I'll caveat that. But there's similarities to the nineties. We understand that. We acknowledge it, but there's distinct differences right now in corporate America and what's coming to market. These are mature companies with massive revenues with a pretty good runway to growth. So we don't think it is the, the pets.com type of market. And I think in terms of the, if you could, what did we learn? It really boils down to that IPOs in themself do not necessarily dictate that the market's topping. It does suggest when IPO market is, is heating up and doing well, that generally we're in a bull market that the most likely thing for stocks to do in a bull market is move higher. And I think that's the scenario that we're in right now. We've got earnings growth. You look at the secular AI theme and we're still constructive on the s and p 500 and US equity markets this year. So we think the party will continue and, and, and maybe it, it's a mature party. It might not go till 4:00 AM we'll call it a cocktail party. Yeah,

Matt Enyedi [25:35] Early dinner lights out at 10. We'll see you in the morning. . Adam, thank you so much for joining us today. It's been an awesome conversation. It's actually really exciting to see what happens next. We're gonna have to do a follow up. We are post anthropic, post open ai, and see what kind of world we're living in and where we're living. 'cause maybe it's not even here on earth. Oh,

Taryn Huett [25:54] Maybe

Adam Turnquist [25:54] It's

Taryn Huett [25:55] Mars. Thanks so much, Adam.

Speaker 4 [26:05] LPL Financial does not offer access to or purchase of initial public offerings. This material is intended for informational and educational purposes only and does not constitute investment research, a research report or a recommendation regarding any specific security or issuer.