US share sales hit record $251 billion as SpaceX, AI fuel boom

Wall Street bankers are calling this the most active equity capital markets environment since 2021, with $251 billion in US share sales in the first half alone.

US IPOs and stock issuance totaled a record $251 billion through June 26, excluding blank-check companies and other investment vehicles, Bloomberg-compiled data show. That surpasses the previous half-year record set during 2021's issuance mania.

"Even if you take out SpaceX's IPO, volumes are advancing rapidly," said Will Connolly, co-head of equity capital markets in the Americas at Goldman Sachs Group Inc., the lead left bank on SpaceX's IPO prospectus. Connolly described a "paradigm shift" in capital markets where the need for equity capital to fund AI infrastructure is being matched by resilient stock prices and strong investor appetite.

SpaceX's $86.2 billion listing broke the record for the biggest IPO ever, while Alphabet Inc.'s $85 billion fundraise stands as the year's largest equity deal that wasn't an IPO. Together, they account for more than two-thirds of the half-year total. The weighted-average return for newly-listed US companies excluding SPACs is nearing 16 percent, almost double the S&P 500 Index's return this year, according to Bloomberg data.

The record issuance signals that corporate confidence and investor demand for new equity remain strong, particularly in AI and space-related sectors. More deals are in the pipeline, including a potential mega-offering from Anthropic PBC as early as October and SK Hynix Inc.'s planned $29 billion US listing, which is set to kick off the third quarter.

AI Infrastructure Drives the Pipeline

The capital intensity of AI buildout is reshaping equity capital markets. So-called hyperscalers are tapping investors to fund data centers and other infrastructure, with convertible debt also seeing sustained momentum. Eleven US IPOs have raised more than $1 billion so far this year, a pace that JPMorgan Chase & Co.'s global head of private capital advisory and solutions, Keith Canton, said could be matched in the second half.

"There could be another dozen jumbo IPOs — think $1 billion-plus — in the second half," Canton said. He expects a pickup in activity from private equity-backed firms that have largely been absent from the biggest IPOs in recent years.

AI chipmaker Cerebras Systems Inc. pulled off a $6.38 billion IPO in May after a feverish marketing period, pricing shares well above an already-raised range. Yet the stock has since surrendered its gains and now trades near its IPO price, a reminder that strong debuts don't guarantee long-term returns.

Wall Street Prepares for a Front-Loaded Second Half

Bankers are watching the Federal Reserve closely, with interest rate cuts off the table for the year and traders bracing for a potential rate hike. That unease, combined with November's midterm elections, is shaping the issuance calendar.

"It's likely that activity will continue at a high pace over the summer so we're preparing for a busy Q3," said Arnaud Blanchard, co-head of global ECM at Morgan Stanley, which was also a lead bank on SpaceX's offering. "While Q4 is typically a constructive window, we could see some volatility around the midterm elections and so second half activity is likely to be front-loaded into Q3."

Private equity-backed names outside the tech universe are also preparing to go public. Roark Capital-owned Inspire Brands Inc. and Jersey Mike's Subs, the sandwich chain backed by Blackstone Inc., have both filed confidentially for IPOs. Yet many buyout firms remain in a holding pattern, waiting for investor enthusiasm to spread beyond AI-related plays.

"Some of their companies are very high quality and very large, so they may have outgrown M&A as an option, so I'd expect to see some of them start to come to the public market," Canton said.

Lisa Clyde, co-head of global capital markets at Bank of America Corp., summed up the moment in one word: "Epic." She added: "This will be the year everybody talks about for the foreseeable future."

This article is for informational purposes only and does not constitute investment advice.