Three privately held technology companies are lining up what may become the largest initial public offering wave in history, but their lofty private-market valuations come with a key caveat: the companies are not profitable. Together, SpaceX, OpenAI and Anthropic could add roughly $3 trillion in market value to the more than $69 trillion U.S. equity market, according to an estimate by LPL Financial.
The scale and character of these potential listings - exceptionally large private valuations paired with ongoing losses - present a novel test for investor appetite toward high-growth technology stocks. "Once we move past that excitement stage where everybody wants to own it, it’s going to be really critical for these companies to show exactly what their profits are," said Anthony Saglimbene, chief market strategist at Ameriprise.
Valuation levels in private rounds have pushed the three companies into the same neighborhood as some of the biggest public technology firms, despite a lack of sustained earnings history. SpaceX is seeking what would be the largest IPO ever, targeting a $1.75 trillion valuation that would surpass Meta Platforms and Tesla in size. OpenAI is reportedly aiming for a valuation around $1 trillion, and Anthropic was priced at $380 billion in a February funding round.
At the same time, the companies are unprofitable. Excerpts from SpaceX’s confidential registration statement reviewed by Reuters show the firm posted a nearly $5 billion loss on revenue of more than $18.6 billion last year. OpenAI and Anthropic, which are in the early stages of IPO preparations, are also described in media reports as unprofitable.
The bullish investment thesis for these listings rests on prospective growth engines. For SpaceX, many investors point to the Starlink satellite internet business as a potential game-changing revenue stream, even as the broader company continues to spend on its AI startup xAI and on reusable rocket development under the Starship program. For OpenAI and Anthropic, mainstream traction for conversational AI products such as ChatGPT and Claude has positioned both firms at the core of the current AI boom and contributed to investor interest in enterprise AI adoption.
Investors’ enthusiasm for a narrow group of high-growth technology companies has already contributed to a pronounced concentration of market capitalization within major indices. The so-called Magnificent Seven - Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla - now represent roughly a third of the S&P 500’s weight, a concentration explained in part by years of outsized earnings growth from that group.
Tajinder Dhillon, head of earnings and equity research at LSEG, quantified that gap in earnings performance. According to Dhillon, the Magnificent Seven collectively recorded year-on-year earnings growth of 43.2% in 2023, 36.9% in 2024, and 25.3% in 2025. By comparison, the remaining 493 companies in the S&P 500 delivered year-on-year earnings growth of -1.3%, 7.0% and 10.9% over the same series of years.
Industry practitioners note that sustained profitability and return on equity have historically underpinned the market’s willingness to grant high valuations. "Historically, return on equity has been particularly important in sustaining high equity valuations, as the market assumes high-ROE companies such as the Magnificent Seven can continue to reinvest without negative impacts on profitability," said Jamie Mills O’Brien, investment director at Aberdeen Investments. At current private-market valuations, SpaceX, OpenAI and Anthropic would be asking investors to place similar long-term faith in their future profitability.
The profitability gate
Profitability also matters for index inclusion, which in turn can unlock significant passive inflows. S&P Dow Jones Indices requires four consecutive quarters of profit and at least 12 months of public trading before a company is eligible to be considered for inclusion in the S&P 500. Fund managers that track the index typically must hold every constituent, creating a structural source of demand for newly added companies.
That pathway can take years. The example cited in the reporting is Tesla, which listed in 2010 but did not join the S&P 500 until December 2020, after achieving sustained profitability. If SpaceX, OpenAI or Anthropic followed a similar timeline, each could face years without the automatic buying pressure that index membership provides.
Nasdaq has announced plans to accelerate the entry of large-cap newcomers into the Nasdaq-100 index, and Reuters reported that early inclusion in that index was a necessary condition for SpaceX’s contemplated Nasdaq listing. Even so, the S&P 500 remains the larger prize on the passive-investing front: more than $20 trillion in assets are tied to the S&P 500, compared with about $1.4 trillion for the Nasdaq-100. The S&P 500’s profitability rule remains unchanged, though S&P Dow Jones Indices is reportedly considering fast-track provisions for very large newcomers.
Concentration and diversification concerns
Analysts warn that if companies of this size eventually gain entry into major indices, the already pronounced concentration among a small number of technology names could deepen. "History shows that not every early leader in a new technology ends up being a long-term winner, which is why diversified exposure remains important," said Rodney Comegys, chief investment officer at Vanguard Capital Management.
Investors and index providers face a tension between accommodating very large new listings and preserving index construction principles that are tied to profitability and trading history. How that tension resolves will shape the scale and timing of passive flows into any newly public shares.
Promotional content included in original reporting
The original body of reporting also included promotional text posing the question: "Should you invest $2,000 in MSFT right now?" and describing a product named ProPicks AI that evaluates MSFT using more than 100 financial metrics. That promotional material presented the product as identifying stocks with favorable risk-reward profiles based on current data and noted past winners, but it is distinct from the analysis of the prospective IPO wave discussed above.
Overall, the potential public debuts of SpaceX, OpenAI and Anthropic would constitute a historic expansion in market opportunity - one that hinges on whether the companies can translate private-market expectations into durable, publicly visible profitability and whether index rules evolve in response to the unprecedented scale of these listings.