Target Allocation Monthly: Mega IPOs

The uptick in anticipated mega IPOs reflects demand for the capital needed to fund the AI buildout. Although several anticipated IPOs carry significant implied valuations, the actual amount of new equity supply entering the market is expected to remain relatively modest compared to the overall size of the U.S. equity market. Most indices are constructed using free-float-adjusted market capitalization, so only shares available for public trading are counted when determining index weight, while insider and restricted holdings are excluded. In practice, this often results in only modest initial index weights for newly listed companies relative to their outsized market valuations. To put this into context, a hypothetical company with a $2 trillion valuation and $50 billion free float at IPO would result in just a 0.08% weighting in the Russell 1000 Index based on current index composition. Our message to clients is that increased IPO activity is a natural byproduct of a robust capital formation phase and it’s happening around real, profitable businesses, supported by indications of strong demand and visible long-term commitments.

Sources: Bloomberg, Goldman Sachs, as of 6/28/2026. Full year best estimates for 2026 include OpenAI and Anthropic, which may or may not actually go public in 2026. US stock market represented by the free float market capitalization of the MSCI USA TR Index. Free float market capitalization refers to the value of a company’s publicly tradable shares, excluding shares held by insiders, governments, or other strategic holders.Estimated IPO proceeds are based off of valuation and free float expectations from CBInsights. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. Forward-looking estimates may not come to pass. Views are subject to change.

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