Massive AI IPOs threaten equity supply-demand balance
The guest argued that an upcoming wave of massive AI-related public listings could introduce significant new stock supply, potentially disrupting the favorable supply-demand dynamics that have supported the equity rally.
The argument
Historically, large public listings have coincided with market tops, as seen with Coinbase in 2021. The influx of new, potentially unprofitable shares could drain liquidity from the broader market.
The thesis, stress-tested
✓ What validates it
- ✓The formal filing or pricing of major AI-focused IPOs
- ✓A measurable decline in net equity inflows following a major listing
▸ Risks discussed
- ▸Strong retail and institutional demand could easily absorb the new supply
- ▸The IPOs could be delayed or downsized if market conditions deteriorate
Hear it yourself
"How do you weigh that? Well, when it when it comes to earnings, let's say, in something like Nvidia, you know, the bar has been raised so high. Right? You know? So, you know, to sort of think of, like, the the pole vaulter, you know, who's who's got the bar raised up already, it's very hard for the pole vaulter to clear it. And I think that's what happens to some extent when you have an NVIDIA situation where everybody everybody expects them to be better than expected. And to a certain extent with NVIDIA, you do also have to ask the question, where where is where might fresh money be coming into into NVIDIA?"
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