There is an old adage on Wall Street that investors should sell in May and go away, but this summer, many stock market watchers have other ideas. After North American indices surged to record highs in the first half of the year on the back of soaring interest in artificial intelligence technology, stocks are now poised to have one of their most eventful summers in recent memory.
SpaceX IPO Breaks Records
That kicked off Friday with the biggest IPO of all time, a US$75-billion public offering for Elon Musk's Space Exploration Technologies Corp. that valued the company, which includes the social media site X (formerly Twitter) and Musk's artificial intelligence effort, at more than US$1.7-trillion. Early trading on Friday pushed that valuation above US$2-trillion.
With major artificial intelligence competitors Anthropic PBC and OpenAI Group PBC also making preliminary filings to go public as soon as later this year, AI exuberance has become hard for investors to ignore, even amid lingering concerns the AI rally has pushed markets into bubble territory.
Market Impact and Expert Opinions
SpaceX is a pivotal market event and not just a company story, said Theresa Shutt, chief investment officer at Harbourfront Wealth Group, adding that she would be wary of betting against artificial intelligence this summer, calling it a game-changer. I think the average investor has to pay a bit of attention and, with the AI theme, it is not going away.
Massive market gains this year have been driven by explosive growth in AI and AI-adjacent companies, which are spending trillions of dollars on data centres and microchips to keep up with demand for processing power. Hyperscalers, the large cloud-computing companies responsible for building out AI infrastructure, are boosting the performance of chip makers such as Nvidia Corp., Advanced Micro Devices, Inc. and Intel Corp., and memory storage manufacturers such as Micron Technology, Inc. and Sandisk Corp.
The S&P 500 is up about eight per cent year to date, while the tech-heavy Nasdaq is up over 11 per cent and the Dow Jones Industrial Average is up nearly six per cent.
AI Winners and Retail Investor Access
Shutt said the picks and shovels companies behind AI infrastructure have emerged as clear winners this year. For instance, semiconductor companies Sandisk and Intel have surged more than 4,700 and 500 per cent, respectively, over the past 12 months.
The IPOs are expected to give more investors an opportunity to play the rapidly advancing sector. These are going to give average retail investors a little bit more access to some emerging technology, perhaps the most exciting technology in decades, said Philip Petursson, chief investment strategist at IG Wealth Management, prior to Musk's IPO. This is a broad market rally, not only in the United States, but in Canada and other areas around the world.
