The most important development in equity markets over recent months has not been new record highs in stock indices. It has been the return of large-scale equity issuance.

SpaceX raised approximately $85.7 billion in the largest initial public offering (IPO) in history. South Korean semiconductor manufacturer SK hynix raised $26.5 billion through a U.S. depositary share offering. Alphabet, long one of the world’s largest share repurchasers, announced plans to raise $84.75 billion in equity to finance artificial intelligence infrastructure.

The significance of these transactions lies not only in their size. They raise a question that investors have barely needed to consider for more than a decade: after a prolonged period of declining equity supply, are public markets once again becoming a place where companies not only return capital to shareholders but also ask them to finance a new investment cycle?

The trend is most evident in the United States. According to PwC, global IPO markets raised $178 billion during the first half of 2026, more than tripling year-on-year. The Americas accounted for $137.5 billion, or 77% of the total. Even excluding SpaceX, IPO proceeds in the Americas reached $62.5 billion, the highest level since 2021.

However, issuance value has increased much faster than the number of transactions. There were 524 IPOs globally, compared with roughly 490 a year earlier. This suggests that markets are reopening not to a broad universe of issuers, but primarily to a handful of strategically important mega-deals, most of them linked to artificial intelligence. This is not yet a return to the speculative environment of 2021.

Headline issuance volumes alone do not necessarily mean that equity supply is increasing. A company may issue new shares while repurchasing an even greater amount. Cash-financed acquisitions also reduce the number of shares available in public markets.

According to U.S. Federal Reserve data, net equity issuance by non-financial corporations turned positive in the first quarter of 2026, reaching an annualised $124.4 billion. This marked the first positive reading since early 2021.

Importantly, these figures do not yet include the SpaceX or Alphabet transactions. The direction of capital flows had already begun to shift before these mega-deals reached the market.

The closest historical parallel is the year 2000. During the first quarter of that year, net equity issuance by U.S. non-financial corporations reached an annualised $196.8 billion, while investment in equipment and intellectual property products amounted to 11.5% of GDP, almost identical to the level seen at the beginning of 2026. Yet the year 2000 reminds investors of more than just bubbles. Following the collapse of the Nasdaq, corporate outcomes diverged dramatically. Amazon, having fallen by more than 90% from its peak, has appreciated roughly 900-fold from its 2001 low to today, while Cisco did not surpass its nominal 2000 peak until late 2025. Such cycles destroy value where investor expectations become excessive, while creating enormous opportunities for companies capable of converting capital into sustainable earnings growth.

Nevertheless, Goldman Sachs forecasts that net equity supply in the United States will be approximately zero this year, marking the first such outcome since 2003. In the bank’s view, supply will turn clearly positive in 2027 as lock-up periods on recent offerings expire and early investors gain the ability to sell their holdings. Meta is also reportedly considering an equity offering, while Anthropic and OpenAI confidentially submitted IPO filings to the U.S. Securities and Exchange Commission (SEC) in June. This suggests that today’s mega-deals may represent not isolated events, but the beginning of a broader issuance wave.

Why is this happening now? Because the structure of economic investment is changing.

The previous cycle was driven largely by relatively asset-light digital businesses and expanding profit margins. The current artificial intelligence cycle depends far more heavily on physical infrastructure. It requires data centres, electricity generation and transmission capacity, semiconductor fabrication plants, networks and advanced memory.

Even highly profitable companies may find investments of this scale too large to finance solely from operating cash flows. Equity capital does not replace debt, but complements it. During the same quarter that net equity issuance turned positive, debt outstanding among U.S. non-financial corporations grew at an annualised rate of 8.8%, while net bond issuance reached $118.4 billion. Both financing channels are becoming increasingly active.

The SpaceX transaction demonstrated the scale of financing that public markets can absorb. All approximately 635 million shares sold were newly issued, meaning the transaction was primarily intended to raise capital for the company rather than provide liquidity for existing shareholders. Nevertheless, part of the proceeds was linked to balance sheet restructuring. Prior to the IPO, the company obtained a $20 billion short-term loan and, shortly after listing, issued an additional $25 billion in bonds.

Subsequent price action quickly reminded investors that access to capital does not eliminate valuation risk. After initially rising above $225, SpaceX shares fell to $119, below the IPO price of $135.

The SK hynix transaction highlighted another characteristic of today’s markets. The company’s U.S. depositary shares were issued at roughly a 3% premium to the locally listed shares, and within days that premium expanded to several tens of percent. This appeared to reflect limited supply, easier access for U.S. investors and constrained arbitrage rather than any difference in the company’s fundamental valuation.

From a structural perspective, the Alphabet transaction may be the most important of all. The planned package, worth up to $84.75 billion, consists of common shares, mandatory convertible preferred shares, a private placement and an at-the-market programme allowing the sale of up to $40 billion in shares over time. Consequently, the announced amount does not represent an immediate dilution of existing shareholders.

The decision itself, however, is highly significant. The management of one of the world’s most profitable companies believes it has investment opportunities attractive enough to justify financing them with new equity. This marks a notable shift after many years in which Alphabet consistently reduced its share count through buybacks.

Greater equity supply is neither inherently bullish nor bearish, but it does weaken an important technical support for equity prices. Share repurchases create additional demand while simultaneously reducing the number of shares outstanding. As a result, earnings per share (EPS) can increase even when total corporate earnings remain unchanged. Goldman Sachs estimates that since 2000, U.S. companies have repurchased approximately $5.5 trillion of their own shares on a net basis. When buybacks give way to new issuance, this technical support reverses: company-generated demand declines while the additional supply of shares must be absorbed by other investors. Moreover, the outstanding share count no longer falls, meaning buybacks no longer provide the same support to EPS growth.

At the same time, when deployed effectively, equity capital enables companies to finance expansion without placing excessive pressure on their balance sheets through debt. It also gives public market investors access to companies that previously remained private for extended periods.

The key question, therefore, is not whether equity supply will increase. More important is what investors receive in return: what returns the newly raised capital will generate, how attractive the initial valuation will be, and how much additional shareholder dilution may still lie ahead. The return of equity issuance means that the promise of growth alone will no longer be sufficient. Companies will need to demonstrate that newly raised capital creates more value than it costs.

Prepared by Henrikas Misiūnas, Fund Manager of 1AM Global Thematic Equity Fund, and Antanas Jason Leitzinger, Investment Director of 1AM Global Thematic Equity Fund.

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