Jessica Mendoza

Like, can they make a solid profit off of that kind of investment?

What these companies are pitching is that these technologies will be incredibly profitable in the long term, because over time, the tech will get better, and so the cost of running it will go down.

And Spencer says a lot of retail investors seem to be buying into that idea.

— Of missing the boat.

— All the money flowing into these companies have meant that Anthropic and OpenAI will likely have valuations around a trillion dollars or more.

And Spencer says that could put pressure on an already overhyped market.

That's next.

SpaceX, and eventually Anthropic and OpenAI, will be adding a ton of market cap into the technology space.

And these IPOs are coming at a time when the U.S.

stock market is already heavily weighted into tech.

The top 10 companies in the S&P 500 are all tech companies, and together, they make up nearly 40% of the index's value.

Concentration can drive huge gains, but historically, it's also come with a lot of risk.

For example, there were clear winners and losers of the dot-com era.

Both Amazon and Pets.com had IPOs, but only one became a successful business.

Those past bubbles were much smaller, at least compared to the size of the market now, and they involved a lot less risk for the general public.

That's because there were fewer investors back then, and Americans relied much less on the markets as a foundation for their wealth.

Also, many more people passively invest in the stock market today because retirement accounts like IRAs and 401ks often hold funds that track major U.S.

indexes like the Nasdaq 100, which means more of people's retirement funds are also heavily concentrated into tech.

And because of the size of these IPOs, the funds that track major U.S.

companies will be forced to buy in at an enormous scale.