Anticipated mega-IPOs of SpaceX, OpenAI, and Anthropic could push technology's share of the S&P 500 to 48 per cent, rivaling historical bubbles, warns Bank of America strategist

Michael Hartnett, investment strategist with BofA Securities, said the three mega-IPOs would push market concentration of technology stocks in the S&P 500 to 48 per cent, surpassing bubbles of the roaring '20s, Nifty 50 '70s, Japan '80s, and TMT '90s. Technology already weighs over 44 per cent on the S&P 500 due to the Magnificent Seven (NVIDIA Corp., Microsoft Corp., Apple Inc., Alphabet Inc., Amazon.com Inc., Meta Platforms Inc., and Tesla Inc.).

SpaceX has already filed for its initial public offering, potentially valuing the company at US$1 trillion and arriving as early as next month. OpenAI and Anthropic are reportedly racing to launch their listings by the end of this year. Cerebras Systems Inc., a semiconductor chip designer, raised US$6.4 billion in the largest semiconductor IPO in history and ended its first day of trading up 68 per cent.

Hartnett said bulls will not exit stocks until the Big Three IPOs occur and Federal Reserve policy tightens after the U.S. consumer price index hits 4 to 5 per cent, which he expects in coming months. Bank of America's Bull & Bear Indicator rose to 8, triggering a contrarian sell signal for risk assets.