SpaceX’s (SPCX) record IPO is a reassuring sign for Wall Street that the AI bull market may have plenty of runway to go.
Earlier in the week, a pullback in technology stocks sparked concerns about the market’s capacity to absorb a wave of new share issuance. Those worries intensified amid a surge of AI-related fundraising, including capital raises by Alphabet (GOOG, GOOGL) and anticipated IPOs from (OPAI.PVT) and Anthropic (ANTH.PVT).
“When you talk about absorbing it, this market has been able to absorb virtually anything,” Lossdog founder and CEO Tom Sosnoff told Yahoo Finance the day SpaceX went public. “On a scale from 1 to 10, I would say it’s a 10.”
SpaceX stock soared nearly 20% on Friday, with retail investors playing a key role in the IPO, driven in part by enthusiasm for founder Elon Musk’s vision.
“The big X factor is Elon’s army of retailer support,” Fortuna Investments CEO Justus Parmar told Yahoo Finance ahead of the first trade on Friday morning.
“I can attest the offering was very, very oversubscribed through all channels,” he added, saying his firm was only able to receive “a portion” of the shares it had requested. SpaceX stock closed up 19% on its first day.
In a note ahead of the debut, Vanda Research said retail investors were likely building “dry powder” for SpaceX’s IPO, with retail activity recently tracking its weakest net buying week since March 2020.
Investors appeared to rotate out of AI winners such as Micron (MU), Sandisk (SNDK), and Marvell (MRVL) to fund other buys.
“If SpaceX is seen as the ‘real deal’ by retail, further selling in prior darlings would not be surprising,” the note said.
Vanda Research said retail investors in 2026 have been “very selective and tactical,” contrasting with the broader “buy everything” meme-driven rallies seen in prior years.
“If this defensive retail activity is set to continue, then the likely path is we see a rebalancing into SpaceX — rather than overall buying,” the note concluded.
Strategists had cautioned against buying into the stock on day one. IPOs that are hot out of the gate tend to cool off as insider lock-up periods expire. For example, Facebook (now Meta) (META), Robinhood (HOOD), and Coinbase (COIN) all offered better entry points later.
In its initial public offering, SpaceX sold roughly 5% of the company.
“It’s like an iceberg. There’s a lot of sellers underneath,” Yale University professor emeritus Roger Ibbotson told Yahoo Finance.
Laffer Tengler Investments CEO Nancy Tengler, however, said SpaceX should be seen more like an Amazon (AMZN). It went public in 1997 at $18 per share. The stock has risen more than 200,000% since then.
“The question is, is this an IPO and a company that captures the imagination of investors? I think it is, for us,” Tengler told Yahoo Finance.
Goldman Sachs strategist Ben Snider said record US equity issuance “will not derail the bull market in 2026.” However, “as lockups expire, the balance of equity supply and demand will become more challenging in 2027.”
The firm still sees the broader S&P 500 (^GSPC) hitting 8,000 by year-end.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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