The moves from real assets to paper to electronic to cyber is unsettling and disruptive at best - and potentially catastrophic.
Unlimited infinite growth is not sustainable. Left alone, an economy will overspeed and explode. Like a cancer, rapid unregulated growth kills the host 100% of the time.
Here we go again.
Companies’ race to issue shares reminds some analysts of later stages of prior rallies
The rush for cash by some of the world’s largest companies is putting the long bull market at risk.
SpaceX’s record $75 billion public offering. Alphabet’s $85 billion equity raise. A $26 billion-plus sale of American depository receipts from the South Korean chip-making company SK Hynix.
Investors have been cheering the raging bull market for years—three years and nine months, to be precise—with the S&P 500 having more than doubled during that period. Now companies are racing to take advantage, raising concern that the party could be coming to an end.
Markets don’t collapse because of old age. Even high prices aren’t usually enough alone to cripple a bull. But one way stocks can slow is when new issuance overwhelms investors, as supply outstrips demand. Companies raced to sell shares in late 1999 and the first half of 2000, for example, which some believe contributed to the dot-com collapse.
That is why some investors are wary of the recent rush of stock and bond issuance, as well as a slowdown in stock buybacks. Already this year, $344.7 billion of new shares have been sold to investors—more than the full-year totals in 2025, 2024, 2023 and 2022, according to Dealogic, which includes public offerings, follow-ons and convertible bonds in its totals.
“Stock issuance tends to surge in the late stages of a bull market,” says Rob Arnott, chair of Research Affiliates.
The pace of issuance is picking up. Last month, SpaceX went public in the biggest-ever IPO. On Friday, SK Hynix’s offering marked the largest-ever share sale by a non-U.S. company. More issuance is on the way, with the AI developer Anthropic and others planning to go public.
And fewer companies are buying back shares, another way the overall supply of shares is swelling.
Overall, U.S. companies will issue a net $500 billion of equities and debt over the next year, compared with a net reduction of $1 trillion of stocks and bonds in recent years, mostly from stock buybacks, according to Elm Wealth, an advisory firm.
A surge of share sales doesn’t guarantee a stock slump, of course. Comparable issuance took place in 2021, as investors hoovered up shares of special-purchase acquisition companies, also known as SPACs. Many of those deals ran into problems, costing investors big money, though the S&P 500 shook the concerns off, soaring 27% in 2021.
But a surge of stock sales is a phenomenon sometimes witnessed near the end of bull markets, as companies take advantage of investor exuberance.
One of the bigger shifts lately is that AI “hyperscalers,” or companies operating huge data centers and other AI services, are selling shares and debt to raise capital for a historic capital-expenditure spree.
These companies are expected to have total capex of more than $800 billion this year, up from $450 billion last year, and the figure will top $1 trillion next year, according to Janus Henderson Investors.
“Many of the hyperscalers are beginning to undo years of carefully manicured capital allocation, with share buybacks now making way for share issues,” says John Lloyd, Janus Henderson’s global head of multisector credit.
Amazon.com alone raised $85 billion in equity sales in the first half of this year, Lloyd notes, while Oracle now has negative cash flow.
“Pre-AI, these companies were extraordinary cash businesses with little debt that really focused on buybacks,” he says. “That’s all changed.”
Some veterans say a surge in stock issuance along with fewer stock buybacks shouldn’t worry investors too much, partly because they have a marginal impact on the overall market’s supply and demand. After all, the value of the U.S. stock market is close to $80 trillion, dwarfing the changes in issuance.
It is difficult to predict when rising stock sales and slowing buybacks might weigh on stocks, says Howard Marks, co-chairman of the investment firm Oaktree Capital Management. Just as important, he says, they are unlikely to be enough by themselves to end a bull market.
“It is a reflection of an environment of optimism in the business sector and that investors don’t want to miss out,” says James Paulsen, the former chief investment strategist at Leuthold Group, who writes a Substack. “In the extreme, that’s a sign that things are overdone.”
It isn’t clear whether a surging supply of shares can derail a market that has a lot going for it. Earnings have been strong, and the economy shows few signs of slowing. Stock prices are at expensive levels—the dividend yield of the S&P 500 is 1.05%, for example, its lowest level on record, according to Research Affiliates—but markets rarely fall because of high valuations.
If spending on artificial intelligence can continue apace, this bull market might have longer legs than past such markets.
“I’m in the Cassandra camp, but continued good news on the AI front can sustain this rally,” says Antti Ilmanen, global co-head of the Portfolio Solutions Group at AQR Capital Management.
Even those who consider the market overpriced are wary of betting against it. Arnott, for example, recommends that investors buy shares of smaller companies and emerging-market value stocks, rather than pulling out of the market.
Historically, rising interest rates, new regulations and underappreciated risks have brought bulls down. In 1987, it was portfolio insurance, while subprime lending sank the market in 2008. But the Federal Reserve isn’t likely to raise rates enough to cripple the economy or the market, according to investors.
Marks says he doesn’t detect similar potential risk factors comparable to portfolio insurance or subprime lending.
“I don’t see prominent excesses, and our economy feels pretty good,” he says. “It would be folly to predict a recession any time soon.”
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