As SpaceX’s IPO approaches, market attention is increasingly focused on what is set to be the largest IPO in history. Historically, mega-cap IPOs have struggled to outperform in the medium to long term, but the current AI- and technology-driven backdrop has reshaped company valuations, and the most recent mega-cap listing (ARM) doubled in its first year of trading. Whether SpaceX follows the historical pattern or the ARM precedent is a key question.
We analyzed 626 S&P 1500 IPOs since 2000 (spinoffs excluded) and their post-IPO performance across six horizons (1D/1W/1M/3M/6M/1Y), sorted into five size buckets. Smaller IPOs tend to outperform over a 1-year horizon. For the typical small-cap IPO, there is no systematic day-after pop or drop; median forward returns begin to turn positive around the 1-month mark. Median post-IPO returns for IPOs below $10B are positive at every horizon from 1 month to 1 year.
There is a strong positive relationship between IPO market cap and first-day trading volume, indicating a reasonably robust link: larger IPOs consistently attract meaningfully higher first-day volumes. As the largest IPO on record, SpaceX is likely to draw substantial investor attention and generate outsized first-day trading volume. That result, however, will provide little insight into how it will preform over the next several quarters.
The IPO is unlikely to impact the overall market trend. Historically, the S&P 500 does not display a clear directional pattern around mega-IPO listings. Across five trading days before and after mega cap IPO, the index fluctuates without a consistent drift, suggesting that the broader market impact of individual mega IPOs, even the very largest, is modest.
At the end of this report we also update our week ahead earnings screen, identifying the names most likely to deliver earnings beats/misses. This screen is based on a combination of fundamental and sentiment readings.
Color Ahead of the Largest IPO in History — SpaceX: We identified only 7 IPOs priced above $50B through 2026. Their median 1-year post-IPO return is -31.9%, and medians are negative at every horizon from 1D to 1Y — suggesting that historically, mega-cap IPOs struggle. Given SpaceX is positioned to be the largest IPO on record, these historical headwinds may apply. The sample size is small, and today’s macro and AI backdrop differ meaningfully from prior cycles, historical relationships offer poor guidance.
Among the Top 14 IPOs by size, only one name, ARM, delivered a positive 1-year post-IPO return. The other 13 (BABA, RIVN, CPNG, UBER, DASH, GM, COIN, RBLX, PATH, HOOD, META, V, LYFT) all traded below their IPO-day close one year after listing. Notably, ARM is the newest in this group, having listed in September 2023, while the rest of the IPOs were all before 2022. The macro regime and AI-driven valuation framework have evolved rapidly over recent years, making historical precedents difficult to reasonable map to SpaceX.
IPOs in general perform well, however. All eleven GICS sectors show non-negative median 1-year post-IPO returns across our sample. Many of those gains are concentrated in the SMID cap space.
Within sectors, Materials stand out as the strongest, with the highest median returns from the 1-month through 1-year horizons. However, individual IPO outcomes are highly dispersed, so sector-level medians should be read as directional. Idio factors are more important.
Size vs. Day-1 trading volume. There is a strong positive relationship between IPO market cap and first-day trading volume. A log-log linear regression yields an R² of 0.50, indicating a reasonably robust link: larger IPOs consistently attract meaningfully higher first-day volumes. As the largest IPO on record, SpaceX is likely to draw substantial investor attention and generate outsized first-day trading volume. That result will provide little insight into how it will preform over the next several quarters.
Market impact around mega IPOs: Historically, the S&P 500 does not display a clear directional pattern around mega-IPO listings. Across five trading days before and after mega cap IPO, the index fluctuates without a consistent drift, suggesting that the broader market impact of individual mega IPOs, even the very largest, is modest.
Earnings Week Ahead: 179 S&P 500 companies are going to report next week. Below we list the names with high Earnings Quality Score with positive earnings sentiment, which used to have higher potential of beats.
And names with high Earnings Turbulence Score with negative sentiment score, which used to have higher risk of missing.
