GMO Warns Surge in Equity Supply from SpaceX, OpenAI, and Anthropic Threatens U.S. Stock Returns

Investment firm GMO has issued a stark warning that a surge in new equity supply—driven by high-profile public listings including SpaceX, OpenAI, and Anthropic—could reduce broad U.S. stock index returns by roughly 20% relative to normal over the next 18 months.
According to GMO, net equity supply is shifting from an annualized contraction of 1% via buybacks to a net expansion of 5% per year. In today’s increasingly passive, benchmark-constrained market, this influx of new shares risks triggering forced-selling dynamics as capital rotates out of existing mega-caps to absorb massive new listings, potentially acting as a catalyst to cool soaring valuations.