The upcoming SpaceX IPO has become one of the most anticipated market events in years. It's also fueling a growing concern among investors: what if peak excitement around Elon Musk's space company marks the top of the bull market? Fundstrat's Tom Lee isn't buying that argument.
Speaking on CNBC's Power Lunch on Monday, Lee said a surprising number of institutional investors are preparing for turbulence around SpaceX's public debut, viewing the IPO as a potential signal that market enthusiasm has gone too far.
“I'd say there's a very large camp of our institutional investor clients that would say SpaceX is going to be the market top,” Lee said. His response? History suggests otherwise.
Why Tom Lee Thinks Investors Are Worried
The concern isn't entirely irrational. Markets have rallied sharply, AI-related stocks have surged, and investors are simultaneously being asked to fund a wave of massive capital raises from some of the world's most prominent technology companies.
Lee noted that companies including Alphabet Inc. (GOOGL), Alphabet Inc. (GOOG), OpenAI, Anthropic, and SpaceX are collectively seeking enormous amounts of capital to support AI infrastructure and growth initiatives.
That has led some investors to worry that liquidity could become stretched, especially as one of the largest IPOs in market history approaches. As a result, Lee said some investors are choosing to take profits and are becoming more cautious heading into the offering.
The Historical Counterargument
Lee believes those fears are misplaced. “History shows that the SpaceX IPO should not actually mark the market top,” he said.
In fact, he argues that investors may be overestimating the significance of a single high-profile debut. “It's actually rare a big IPO marks a top,” Lee said.
The observation runs counter to a common Wall Street narrative that blockbuster offerings often coincide with excessive optimism and market peaks.
Instead, Lee sees the SpaceX IPO as another milestone in an ongoing bull market rather than the event that ends it.
The $7 Trillion Factor
One reason for his confidence is simple: cash.
According to Lee, markets still have plenty of liquidity available to absorb the offering. “There's still $7 trillion of cash on the sidelines,” he said.
He also pointed to strong demand from wealthy investors eager to gain exposure to SpaceX. “High-net-worth clients have a lot of cash available to buy this IPO,” Lee said.
That demand, in his view, reduces the likelihood that the offering will drain liquidity from the broader market.
What Happens After The IPO?
Perhaps Lee's most bullish takeaway is that the SpaceX debut may ultimately be a positive catalyst rather than a warning sign.
“The market's going to not only absorb this IPO really well, but I think the market's going to do well post IPO,” he said.
Whether SpaceX's debut lives up to the extraordinary hype surrounding it remains to be seen. But while some investors are treating June 12 as a potential turning point for the market, Lee sees it differently.
For him, the bigger story isn't that investors are running out of money. It's that there's still plenty of cash waiting to be deployed.
Image created using artificial intelligence via DALL-E.
