Should you invest in SpaceX and the other AI IPOs?

The article argues retail investors should avoid buying into upcoming AI IPOs, warning they may already be priced to perfection and could benefit insiders more than new buyers. It notes IPOs historically underperform the S&P 500 in their first year, while six-month lockups can create selling pressure once early investors are able to exit. Investors are advised to seek exposure through broader index funds or existing public companies with stakes in the private AI names.

Analysis

The immediate winner is not the private issuer, but the pre-IPO cap table: secondary holders, late-stage funds, and employees with liquidity needs are being handed a demand bridge by retail enthusiasm. That creates a classic distribution window where price discovery is less about intrinsic value than about how long insiders can keep selling into passive and momentum demand before the post-lockup supply overhang hits. In other words, retail participation can ironically improve exit prices for the very holders trying to monetize, while future public shareholders inherit the downside convexity.

The bigger second-order effect is on index and large-cap exposure. If broad benchmarks accelerate inclusion rules, the market is effectively creating a delayed but much cheaper way to own the same AI exposure without paying venture-style multiples today. That shifts the trade from "own the IPO" to "own the platform that already monetizes the ecosystem," which is why incumbent AI beneficiaries with cash flow and existing index membership should outperform as capital rotates from narrative to implementation.

On timing, the dangerous window is not day-one hype; it's the first 3-6 months after listing, when lockup expiries and insider supply collide with fading scarcity value. If the names trade well into that period, the market is telling you that passive flow is strong enough to absorb distribution; if they crack on decent volume, the move likely means private-mark-to-market multiples were the real marginal buyer all along. The contrarian miss in the article is that some IPOs do work—but only when public-market demand is strong enough to re-rate the entire category, not just the single issuer.

Key Decisions for Investors

• Avoid initiating fresh longs in CRWV into the lockup window; if already involved, treat any post-IPO strength as a distribution opportunity and consider trimming 30-50% on rallies rather than averaging up.
• Use GOOGL as the cleaner AI proxy versus speculative IPO exposure: long GOOGL vs short a basket of recent AI IPOs after listing, targeting a 3-6 month horizon where cash-flow-backed exposure should outcompete story stocks.
• For investors who want venture-style upside, buy call spreads on GOOGL instead of outright IPO shares; this preserves AI upside while limiting downside if post-lockup supply hits newer listings.
• Set a catalyst calendar around the first lockup expiry and index-inclusion milestones for each AI IPO; if price weakens into those dates, favor short-duration puts or put spreads rather than naked shorting due to squeeze risk.
• If forced to express the theme, overweight incumbent AI/platform names already inside major indices and underweight standalone IPOs, since passive flows and retirement allocations may deliver the same thematic exposure with materially lower valuation risk.