{"text":[[{"start":6.4,"text":"“When the ducks are quacking, feed them,” goes a Wall Street adage about satiating eager investors. It is a sentiment that now appears to be guiding Silicon Valley’s most valuable companies. Anthropic filed for an initial public offering on Monday, following Elon Musk’s SpaceX last month. OpenAI is also planning to file imminently. Not to be outdone, already listed Alphabet, Google’s parent company, said midweek that it wanted to raise $85bn in equity funding — its first stock offering in more than two decades. Despite the voracious appetite for tech assets, the surge of fresh equity supply is a new test for the US stock market’s AI-led boom."}],[{"start":49.1,"text":"The first challenge is absorption. Together, the three giant IPOs could command a combined valuation of around $4tn — close to one-third of the inflation-adjusted value of all US IPOs at first close between 1980 and 2025. For now, market watchers are confident that the “ducks” will easily digest this, particularly as index providers look to waive inclusion rules to fast-track the stocks into benchmarks. Lock-up provisions and large insider stakes also mean the initial amount of shares floated publicly by these companies is expected to be small anyway. America’s total market capitalisation is about $75tn, so there is enough liquidity to subsume the deals. Indeed, demand for AI exposure has been robust, even in the face of significant economic shocks. "}],[{"start":101.5,"text":"But there is more equity supply to come. Other private tech companies, including Stripe and Databricks, could be mulling IPOs. Following on from Google, more hyperscalers could also issue new shares to finance further capital expenditure. Until now, investment in AI infrastructure has been propelled by operating cash flow. As this has waned, some Big Tech groups have reduced their stock buybacks and used debt to finance expenditure. With interest rates remaining elevated, more may turn to equity markets (or at least reduce their buyback activity)."}],[{"start":136.45,"text":"The combination of mega IPOs and new share issues would mark a structural shift for the US market. Equities have fallen in supply over the past two decades as a result of delisting, buybacks, mergers and the growth of private markets. And although demand remains firm, there are signs it could weaken. As inflation edges higher, the US Federal Reserve may be forced into raising interest rates, and analysis by BCA Research suggests that investors’ remaining cash on the sidelines is at a record low as a share of US equity market capitalisation. "}],[{"start":169.29999999999998,"text":"Another obstacle to the S&P 500’s continued rise may be whether the ducks like what they are being fed. Cynics view major IPOs as a chance for private investors to cash out into a booming market — as they did during the dotcom bubble of the late 1990s. Equity supply could then increase further as lock-up periods expire over the coming year, forcing the market to absorb additional unwanted shares from recently listed companies. SpaceX, OpenAI and Anthropic are all currently lossmaking, while the genuine commercial potential of AI models — and, in Musk’s case, going to Mars — remains largely unproven. Also, some valuations are stratospheric: the SpaceX listing price, for example, sets the group up to trade at 92 times its annual revenues."}],[{"start":215.04999999999998,"text":"For now, investors seem willing to absorb a growing supply of equity, buoyed by confidence in AI and a market still inclined to reward future potential over present profits. But every IPO, lock-up expiry and secondary offering tests that appetite a little further. As supply continues to rise, faith alone may not be enough. Eventually, the burden of proof shifts to the seller."}],[{"start":244.74999999999997,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1780627286_4738.mp3"}