By Martin Baccardax
From the Greek philosopher Archimedes shouting "eureka" in his bathtub to the German psychologist Karl Bühler defining the concept of an "Aha!" moment two centuries later, sudden jolts of realization can hit rather quickly.
OpenAI's confidential filing of its IPO details late Monday, which sets the stage for the third of three massive stock listings that could create nearly $4 trillion in overall market value, feels similarly jolting to investors grappling with the future of the artificial intelligence trade.
Markets will need to take down nearly $300 billion in new capital for three companies that have yet to turn a profit, and whose reach extends largely into the unknown. Their future is replete with staggering predictions of overall market potential, but those forecasts often fail to explain in practical terms how the billions being spent will translate into revenue and profit once the AI infrastructure is completed.
OpenAI, with an expected market value of around $1 trillion, loses close to $1.22 for every $1 of revenue it generates, based on recent estimates. The company is expected to spend roughly $600 billion by the end of the decade, underscoring the scale of growth investors will need to see to justify its valuation.
Anthropic, it must be said, is likely to post a small operating profit over the three months ending in June, thanks in part to a quarter-over-quarter doubling of its overall revenue, but its spending plans suggest that isn't likely to last, even with an annualized run rate of $47 billion. It filed confidential listing plans last week.
SpaceX is the outlier, with a proven loop of spending on its Starlink satellite infrastructure to bottom-line profits. But the group's $1.8 trillion valuation can only be justified if the crucial components of its "all in one" model, which includes AI-in-space forecasts that will take revenue to $322 billion by 2030, according to Goldman Sachs, come good.
"The biggest question is whether the significant capital being deployed into AI and data-center infrastructure ultimately generates attractive returns," said Mona Mahajan, head of investment strategy at Edward Jones. "The scale of investment is enormous, and investors will increasingly focus on whether that spending translates into sustainable earnings growth and profitability."
Will any of that matter, though, in a market that seems desperate to ride the current AI wave into fresh record highs?
Semiconductor stocks have risen more than 84% since the start of the year, even with last week's 10% correction. The ten biggest tech companies effectively comprise around 35% of the S&P 500's total market value, and Nvidia's $5 trillion valuation alone is bigger than every stock market outside of the U.S., China, and Japan.
But the three planned IPOs are coming at a tense time for global stocks, which are grappling with resurgent inflation concerns tied to the U.S. war with Iran, elevated crude prices that threaten consumer spending, and a domestic political landscape that could bring significant policy changes before the end of the year.
Higher Treasury bond yields are challenging equity market returns, as well, and three-month Treasury bills currently yield roughly 2.7 percentage points more than the S&P 500's dividend yield.
That creates something of an inflection point for markets as they prepare to digest the three major AI listings over the summer months.
Strong demand, solid early performances and improving profitability outlooks will crystallize the sector's hold on markets and strengthen the industry's case to skeptics.
"If the first wave of marquee AI IPOs is successful, it could create important proof points for investor appetite, valuation support, and public-market receptivity," said Willy Lee, principal at SuRo Capital, who thinks the listings will "help catalyze a long-awaited IPO parade across the broader late-stage growth market."
Failure of one, or all three, however, could trigger a major pullback for stocks over the back half of the year.
"The opportunity is exciting, and the long-term growth potential may be underappreciated," said Anthony Saglimbene, chief market strategist at Ameriprise.
"But so is the risk that it takes longer for these stocks to find their footing than current valuations suggest, particularly as the market works through how to truly evaluate them and the emerging industries in which they operate," he added.
Bühler's early 20th experiments showed that complex problems were often solved by a sudden shift in thought -- the Aha! moment -- that dissolved confusion into reality.
The coming wave of AI IPOs may force investors into a similar reckoning.
Write to Martin Baccardax at martin.baccardax@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 09, 2026 14:00 ET (18:00 GMT)
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