Three trillion-dollar IPOs in the same year. A combined capital raise potentially north of $135 billion. SpaceX starts trading this week. Anthropic filed its IPO paperwork last week. OpenAI is racing to file before Labor Day. The last time something this concentrated happened was the dot-com boom, and even that did not include companies of this size.
Whether you are excited about owning a piece of SpaceX or skeptical that any AI lab can justify a $1 trillion valuation while still losing money, the right question is not "should I buy the IPO?" The right question is what does this much capital flowing into a handful of names do to the rest of your portfolio, and where do you want exposure that does not move with the tech trade. For most of the investors I talk to, the answer increasingly involves looking harder at private real estate. Here is why.
One. The S&P 500 is about to become more tech-heavy than ever. The top 10 stocks already make up roughly 40% of the index. Add SpaceX and two trillion-dollar AI labs and the concentration only grows. If you own broad-market index funds, you are making a much bigger bet on a handful of tech companies than you might realize.
Two. Frothy valuations are not just an AI problem. When investors pay $852 billion for a company that loses money and is not projected to be profitable until 2029, it changes what they are willing to pay for growth across the entire market. Stocks that are not even AI-adjacent get caught up in the same multiples.
Three. Diversification matters more right now, not less. Concentrated bets feel great when they are winning. They feel awful when they are not. The investors who do well across cycles are the ones who own assets that move differently from each other. That is not the trade everyone is talking about. It is the discipline that quietly compounds.
Real estate answers all three of those points directly. Income-producing real estate generates cash flow every quarter whether or not SpaceX delivers on its valuation. It is backed by hard assets you can see and touch, not multiples of revenue a company hopes to earn five years from now. And it moves on a different rhythm than tech stocks, which means when public markets eventually reprice (and they always do), real estate is not selling off at the same time and the same speed.
I am not bearish on the IPOs. SpaceX has real revenue. Anthropic and OpenAI are building the most important technology of our generation. But the right question for an everyday investor is not whether to bet on them or against them. It is whether your portfolio is positioned to win regardless of how the bet plays out. The smartest investors I talk to are leaning into income and hard assets right now, not because they hate the AI story, but because they understand that a portfolio can do better than any single bet inside it.