S&P 500 Hits Record 7,600 as AI IPO Wave Fuels Rally

The S&P 500 rose to a record 7,600 on June 02 as artificial intelligence stocks led a nine-day winning streak. Anthropic filed for an IPO, signaling a wave of AI company debuts. However, the market’s PE ratio hit 27.4, the highest in U.S. history, raising concerns about valuation extremes. Geopolitical tensions and inflation fears add risk to the rally.

AI Companies Race to Go Public

Anthropic submitted a confidential IPO filing to the SEC on June 02, joining OpenAI and SpaceX in the race to list. The five-year-old AI company raised $65 billion in private funding, pushing its valuation to $965 billion and making it the world’s most valuable startup. Anthropic now reports $47 billion in annualized revenue from selling Claude to customers.

Wedbush Securities analyst Dan Ives called the move an opening of the floodgates for the IPO market, with all three AI firms expected to go public this year. Anthropic’s filing gives it a first-mover advantage over OpenAI, which was widely expected to file first.

Tech Stocks Lead Record Rally

The Nasdaq Composite rose 0.42 per cent to 27,086.81 points, while the Dow Jones added 0.4 per cent to 51,078.88 points. Marvell Technology leaped 32.5 per cent after Nvidia CEO Jensen Huang suggested it could become the next trillion-dollar company. Hewlett Packard Enterprise soared 19.5 per cent on strong AI-driven demand for servers and infrastructure.

Memory chip makers and data storage companies surged on AI buildout needs. Micron Technology, Seagate Technology, and Western Digital have all gained more than 200 per cent year-to-date. Alphabet announced plans to raise $80 billion in equity, including a $10 billion investment from Berkshire Hathaway, to fund AI infrastructure expansion.

Valuation Concerns Mount Amid Geopolitical Risk

The S&P 500 PE ratio hit 27.424 in June 2026, the highest level in U.S. stock market history. This extreme valuation mirrors the late-1990s tech bubble, raising concerns about sustainability. BlackRock’s Rick Rieder, who oversees $2.4 trillion in assets, said he feels a bit more relaxed about the AI bull market than the dotcom era, citing strong cash flows and buyback support.

However, geopolitical tensions in the Middle East and uncertainty about the Strait of Hormuz closure created volatility. Asian stocks fell on the news, with the Nikkei down 0.7 per cent and the KOSPI down 2 per cent. The World Economic Forum reported that 88 per cent of chief economists expect weak growth in the Middle East and North Africa region.

Nine-Day Win Streak Tests Market Resilience

Global stocks posted their ninth consecutive weekly rise, the best performance since 2023. The current bull market has now run for 45 months since late 2022, well above the average 30-month cycle. The rally is supported by higher corporate earnings and rising profit margins, though a mid-year news lull has left investors focused on the AI narrative.

With the S&P 500 up 11 per cent year-to-date, memory chip stocks have far outpaced the broader market. SanDisk is up more than 600 per cent year-to-date on demand for storage capacity to power AI systems. Demand for chips and memory now exceeds supply, allowing makers to charge premium prices and boost earnings forecasts.

Final Thoughts

The S&P 500’s record run masks extreme valuations and mounting risks. With the PE ratio at 27.4 and geopolitical tensions rising, investors should watch for signs of a pullback. The AI IPO wave offers opportunity but also signals late-stage bull market behavior.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.