GMO analysts say rising U.S. share supply could dampen likely returns by perhaps 20% relative to normal over the next 18 months. They say new listings and insider sales are arriving as passive investing leaves fewer buyers to absorb shares.
GMO says U.S. share supply, which previously shrank about 1% a year as companies bought back stock, is now on track to grow about 5% annually. It estimates SpaceX insider sales, excluding Elon Musk’s personal holdings, already account for about 1% of the U.S. market; potential OpenAI and Anthropic listings could add another 5%. IPOs raised more than $137 billion in the first half of 2026, nearly 400% more than a year earlier, according to SEC data cited in the article.
With stock ownership near a five-year high and little cash on the sidelines, GMO argues investors may sell existing holdings to fund IPO purchases, putting pressure on large S&P 500 stocks. The firm says the supply wave could eventually trigger a break in the AI bubble. Its seven-year outlook favors international and emerging-market value stocks over large U.S. companies for inflation-adjusted returns, and it advises diversification.
