The Real Trade Behind the Coming $3.5 Trillion IPO Wave 

Listen to the audio version of this article (generated by AI).

 

In This Digest: 

• This year’s mega-IPOs are running into these same chokepoints 

• Why Elon wants to build AI data centers in space 

• We just unveiled our newest AI-powered trading system – here’s how it returned 50% the year the S&P 500 fell 20%

Friday marks the biggest IPO in history… 

By then, you’ll be able to buy shares in SpaceX – Elon Musk’s space technology and AI company – for the first time. 

The company is set to begin trading on the Nasdaq under the ticker SPCX at an IPO price of $135 a share. 

At that price, SpaceX would be valued at roughly $1.75 trillion – making this the largest IPO in stock market history. 

That tops Saudi Aramco’s 2019 IPO on the Saudi Exchange, which previously held the record. And SpaceX would debut above Tesla’s current market value of around $1.6 trillion. 

And it’s not the only hotly anticipated mega IPO. 

Two AI labs, OpenAI (ChatGPT) and Anthropic (Claude), are expected to go public this fall, at valuations of $852 billion and $965 billion, respectively. 

Together, they’re set to flood public markets with more than $3.5 trillion of new stock – in a matter of months.  

And that raises some interesting questions, like where is that money going to come from? Are investors going to sell stock they already own to buy in? And what does it mean when a bloated IPO stock like SpaceX joins the Nasdaq and winds up in every index investor in America’s portfolio? 

None of these three companies are currently profitable. OpenAI is projecting $14 billion in losses in 2026 alone – and doesn’t expect to turn a profit until 2030 at the earliest. SpaceX’s AI division is burning through cash at a similar pace.  

Anthropic has the clearest path to profitability – it’s expected to post its first operating profit sometime this quarter, though a modest one at roughly $559 million.  

But from TradeSmith’s view, the ins and outs of these IPOs – while interesting – are less important than the market megatrends they represent. 

Behind the hype, each of these mega-IPO firms is running into the same wall… 

ChatGPT, Claude, and Grok are the three dominant AI products on the market today.  

That means they’re all struggling with the same five AI chokepoints our CEO, Keith Kaplan, has been covering in these pages: 

1. High-bandwidth memory chips – supplying rapid-fire data to AI processors 

2. Silicon photonics – a new class of chip that transmits data as light rather than electricity 

3. Liquid cooling systems – keeping powerful AI chips from overheating 

4. Power conditioning equipment – converting high-voltage lines into clean power data centers can use 

5. Power Infrastructure – the grid construction companies physically connecting buildings to power 

Think of it like a Jenga tower. To keep scaling AI, you need all the blocks in place. Pull one out, and the whole thing wobbles. 

Space solves three of these chokepoints… 

Power is the obvious one. Solar panels in low-Earth orbit receive sunlight around 90% of the time – with no clouds, no nights, and no grid required. 

Orbital datacenters running on continuous solar energy sidestep the grid capacity problem entirely. 

That also solves the power conditioning problem. Ground-based data centers need bulky, expensive equipment to convert high-voltage grid power into something usable. Solar panels skip that step – they produce clean, low-voltage power directly.  

Cooling is the third. On the ground, data centers rely on expensive water-based cooling systems. In orbit, excess heat can be radiated directly into the cold vacuum of space, with no water required. 

The real trade behind these AI-centric IPOs isn’t buying them on day one. It’s owning the companies building the infrastructure that makes all of it possible – on the ground and eventually in orbit. 

The Swan brothers were early into the space trade and sold at the perfect time… 

Last October, Andy and Landon Swan – the brothers behind our MegaTrends advisory – showed their subscribers why space stocks should top their buy lists. 

This was before the SpaceX IPO was on investors’ radars. But private and government capital was flowing in as rocket launch costs continued to fall. 

The Swans put four stocks on a watchlist for their subscribers:  

• Planet Labs (PL) 

• Redwire (RDW) 

• Comtech (CMTL) 

• And Viasat (VSAT) 

Four months later, that group was up an average of 50% – with Comtech up 95% and Planet Labs up 79%.  

Redwire was the one laggard at the time. But the Swans saw opportunity for a catch-up trade and added it to the MegaTrends model portfolio in February.  

By late May, the Swans recommended selling RDW for a 130%+ gain in just over three months.  

And it’s great timing, too. Since their sell alert, the stock is down more than 35% as the SpaceX IPO has acted as a “sell-the-news” moment for the sector.  

Looking at the ARKX Space & Defense Innovation ETF (ARKX), which tracks stocks in this sector, the space trade peaked at the end of May. It’s down about 10% since then. 

Today we debuted our newest AI strategy… 

Earlier today, our CEO, Keith Kaplan, sat down with legendary growth stock investor Louis Navellier to debut our newest innovation in AI-powered investing. 

Louis has spent 47 years building quantitative investing strategies, even going back to when most of Wall Street still ran on gut feel and a Rolodex.  

He’s also called some of the biggest winners of the last half-century early – including a recommendation on Nvidia (NVDA) a full 17 years before ChatGPT made it a household name. A $1,000 stake in that one call would have grown into more than $1 million.  

So when Louis says he’s excited about a new approach, you should pay attention. 

What he and Keith unveiled is the Tactical Profits Portfolio. 

The idea behind it is simple, even if the technology under the hood isn’t.  

Most model portfolios hand you a list of stocks and tell you to sit tight for a year or more. This one is built for a different kind of market – the choppy, headline-driven summer Louis sees coming, where leadership rotates fast, and yesterday’s winner can become next week’s laggard. 

We’re already seeing this kind of rotation at play today, with chipmakers and space stocks cooling off. 

So instead of updating once a quarter, the Tactical Profits Portfolio refreshes every single week.  

Each week, it narrows the entire market down to a short list of the five stocks that look strongest based on Louis’ battle-tested Stock Grader system and TradeSmith’s Short-Term Health momentum indicator.  

With it, you’re never married to a single trade. As the data shifts, the portfolio shifts with it. 

And the results from testing the strategy are what really caught my eye.  

Run on the past five years, the approach returned more than 5 times your money since 2021 – using just five stocks at a time.  

It even held up when the market couldn’t. In 2022, the year the S&P 500 fell 20% and gave most investors a miserable ride, this approach could have delivered a positive 50% return instead. 

The weekly trades behind those results were fast. The backtest is full of quick winners like a 10% gain on Twilio in four days, 12% on Pinterest in four days, and 16% on Wayfair in 11 days.  

In today’s broadcast, Keith and Louis walked through exactly how it works, and how to get access before the doors close on June 16. 

If you missed it, I’d recommend watching the replay before we take it offline.  

To building wealth beyond measure, 

Michael Salvatore 

Editor, TradeSmith Daily