Over nearly the past 20 years, the U.S. stock market has faced a situation known as “stock scarcity” due to massive annual share buybacks, especially by companies in the S&P 500, which have repurchased shares totaling over $12 trillion, resulting in a continuous decline in publicly circulating shares.
However, in 2026, this situation will change. According to JPMorgan Chase's estimates, IPOs, additional stock offerings, and other equity fundraising methods will introduce approximately $1.5 trillion in new shares into the U.S. stock market over the next two years, even after accounting for the impact of share buybacks.
If this figure materializes, it would represent the period with the highest net stock issuance in the U.S. stock market since the late 1990s, during the dot-com boom.
In the past, companies typically used share buybacks to boost shareholder returns or preferred to remain private markets rather than go public. But this year, many companies are turning back to the capital markets as a source for raising funds to expand their businesses.
For example, on June 12, SpaceX, Elon Musk’s rocket, satellite, and AI company, completed the largest IPO in history by offering $75 billion worth of shares, with its stock price surging 19% on the first day of trading.
In the coming months, OpenAI and Anthropic are also preparing for massive IPOs.
Additionally, tech giants like Alphabet, Meta, and Oracle are selling hundreds of billions of dollars in shares to fund massive AI-related investments.
According to Bloomberg data, about 160 companies have announced IPO fundraising plans this year totaling over $120 billion, exceeding the combined total of the previous two years.
Including stock sales by already-listed companies, the value of new shares entering the market has surpassed $360 billion, potentially making this the busiest first half-year for stock issuance in five years.
Taken together, the picture shows the U.S. stock market expanding again after years of contraction, possibly at a scale unseen since the dot-com bubble era.
A key reason companies are selling more shares is that equity fundraising costs are more attractive than borrowing, as the S&P 500 currently trades at about 25 times earnings (P/E Ratio), one of the highest levels of this century.
This means investors are paying very high prices for shares, while borrowing costs remain elevated compared to previous years.
Comparing earnings yield to the interest rates companies must pay in the bond market reveals that equity fundraising costs have become cheaper than debt financing, especially after the U.S. Federal Reserve raised rates to the highest in over 20 years in 2023.
Although the Fed has begun cutting rates, the stock market's $30 trillion-plus capitalization maintains the advantage of equity issuance.
Another factor driving the surge in stock sales is the growing role of retail investors. Bloomberg Intelligence data shows retail investors now account for about 20% of total U.S. stock trading volume, double their share since 2010.
A major factor behind the fundraising urgency is the accelerated construction of data centers, AI processing chips (GPUs), and other infrastructure essential for AI companies, leading to massive cost increases.
Initially, tech giants supported investments in data centers, chips, and energy infrastructure using retained earnings, cash flow, and borrowing. But many now view these methods as insufficient.
Alphabet, Google's parent company, is a clear example. Once one of the world’s largest share repurchasers, after borrowing heavily from the U.S., Japan, and other countries to expand its AI business, it is now preparing to sell $85 billion in shares, one of the largest equity offerings ever.
SpaceX, OpenAI, and Anthropic represent a similar phenomenon. These three companies share characteristics of being unprofitable, requiring massive investments, and needing capital from investors.
Ned Davis Research estimates these three companies could collectively raise more than $170 billion in a short period.
Interestingly, these IPOs sell only a small portion of shares; SpaceX sold less than 5% of the company, whereas typical IPOs sell about 15-20%. OpenAI and Anthropic are expected to follow a similar approach.
This means that when the lock-up period ends and more shares enter the market, the volume of new shares will increase dramatically.
Ned Davis Research calculates that with a combined valuation exceeding $3 trillion for SpaceX, OpenAI, and Anthropic, just releasing a portion of their shares into the market could offset the volume of shares repurchased by S&P 500 companies over a whole year.
However, concerns about the massive expenses of tech companies and the potential increase in shares issued to fund AI investments have begun to affect stock prices.
Last year, the Hyperscaler index outperformed the S&P 500 significantly, but this year it has declined 2.6%, underperforming the broader market.
Source:Bloomberg
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