The article organizes views on the impact of SpaceX and OpenAI listings on the supply of capital, trends in the Japanese equity market, and the valuation of growth stocks, based on comments from a prominent investor who sees similarities between the AI and IT bubbles. The focus is on the impact that gains in major U.S. stocks and capital flows are having on the Japanese market.
A prominent investor pointed to capital flows surrounding AI-related stocks and explained that large-scale listings by SpaceX and OpenAI could affect the allocation of capital across the broader market. SpaceX's market capitalization on the first day of trading reached approximately ¥336 trillion, and its listing size was said to be equivalent to a substantial portion of the entire Prime Market. OpenAI is also being discussed as a potential listing valued at around $1 trillion, prompting views that large-scale capital flows will continue.
While the U.S. stock market's advance may continue, a divergence has emerged between large-cap Japanese stocks and growth stocks, with gains in growth and small-cap stocks expected to remain limited. The S&P 500 remains near record highs, but the risk of a future correction and elevated valuations were cited as concerns.
In the Japanese market, the number of undervalued stocks with PBRs above 1x but low PERs is increasing. At the same time, more stocks are showing limited price gains despite strong earnings results. As a specific example, Creek & River Co., Ltd. reported 23% revenue growth and 50% growth in operating profit, but its share price had risen only modestly in recent trading.
Investors indicated that they will continue to monitor trends in AI-related investment, IT investment, and the Japanese equity market, as well as the impact on trading profits. It was noted that investors need to assess the effect that the scale of new listings and capital inflows and outflows will have on the market as a whole.