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The IPOs Of SpaceX, OpenAI And Anthropic Threaten To Drive Wall Street To Bubble-Like Levels

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Stock markets continue to perform strongly despite the mounting risks. Neither the war in the Middle East, nor the resurgence of inflationary pressures, nor fears of an economic slowdown have managed to slow down the equity market. However, beneath this apparent strength there lies an increasingly evident fragility: the growing concentration of the market. The bulk of the gains rests on an increasingly limited number of stocks, and the trend is particularly evident in the U.S. According to Goldman Sachs, 85% of the S&P 500’s gains so far in 2026 (10%) come from technology. Excluding the sector, the advance drops to 3%.

This narrowing of the market is beginning to worry analysts. Michael Hartnett, a strategist at Bank of America, warns that the upcoming IPOs of SpaceX, OpenAI and Anthropic could push market concentration to levels not seen since the late 19th century. At that time, the rail industry—driven by debt-financed expansion and a significant investment surplus—came to account for 63% of market capitalization in the United States. That episode ended in a crisis, with the bankruptcy of Jay Cooke and the closure of the New York Stock Exchange, reflecting the accumulated excesses. While the two situations are not exactly comparable, the parallels with the current situation are becoming increasingly evident.

Beyond the historical parallels, the market finds a closer point of reference in the 1990s. As was the case then, the spotlight is once again focused on a single sector: technology. Just as with the internet and the dot-com boom, expectations regarding the transformative potential of artificial intelligence are driving increasingly ambitious valuations, the true scope of which can only be gauged over time. Following a brief attempt to rotate toward more cyclical stocks at the start of the year, rising uncertainty and better-than-expected earnings have returned the spotlight to large growth companies.

Years ago, it was the FAANG companies—Facebook, Amazon, Apple, Netflix, and Google—that dominated the stock market and led the tech industry. With the rise of AI, the group expanded to become the Magnificent Seven. Names and technologies may change, but the market logic remains the same: a small group of tech giants dictates the direction of the indices. Nvidia, for example, has reached a market capitalization comparable to the size of economies like Germany’s.

Against this backdrop, the market is bracing for a new wave of IPOs by major tech firms—deals that aim to break records and threaten to further intensify this trend. Upcoming IPOs by companies such as SpaceX, OpenAI, and Anthropic could further bolster the sector’s weight in the indices.

Another bubble?

Currently, tech companies account for nearly 40% of the total value of the U.S. market—a share that, according to Hartnett’s estimates, could rise to nearly 48% following the next wave of IPOs. History doesn’t repeat itself, but it rhymes strongly: if these forecasts come true, the sector would surpass the 41% reached during the dot-com bubble and the 44% recorded during Japan’s stock market euphoria in the late 1980s.

Although concentration levels are high, analysts insist that high valuations alone are not a trigger for a correction. Juan Gómez Bada, chief investment officer at Avantage Capital, states that, unlike what happened during the dot-com crisis, valuations have so far been supported by real earnings. The latest earnings season is a good example. According to FactSet data, the “Big Seven” reported a 62.3% earnings growth rate in the first quarter, well above the 17.4% for the rest of the S&P 500.

“The concentration of capital partly reflects that of earnings. Today’s dominant companies are of higher quality and have profitable business models,” notes Castelo. This is the main difference from the dot-com bubble, when stock prices were driven by expectations rather than results. “The graveyard of that bubble is full of companies that never made a dollar.”

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A Franciscan Monk, A Festival With Karol G, And The Vatican’s Investments: How The Pope Came To Say That ‘AI Needs To Be Be Disarmed’

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Last year Time magazine included Pope Leo XIV among the 100 most important figures in the world in artificial intelligence (AI). It is no coincidence. Only eight days passed from his papal appointment to his first public remarks on the technology: “Truth is never separated from charity… Thus, truth does not distance us, but rather allows us to face with greater vigor the challenges of our time, such as migration, the ethical use of artificial intelligence and the protection of our beloved Earth,” he said in his second official address. His first encyclical, Magnifica Humanitas (magnificent humanity), is devoted precisely to this technology.

AI is a concern at the Vatican. For the pontiff, the issue was so important that it even influenced his choice of name. “Pope Leo XIII […] addressed the social question in the context of the first great industrial revolution. In our own day, the Church offers to everyone the treasury of her social teaching in response to another industrial revolution and to developments in the field of artificial intelligence that pose new challenges for the defence of human dignity, justice and labor,” Leo XIV said in his first address to the College of Cardinals.

“Artificial intelligence needs to be disarmed,” the pope declared yesterday during the presentation of his encyclical. “The word is strong, I know, but deliberately chosen because this moment needs words capable of attracting attention […] The Church has long been working for nuclear disarmament […] In a similar sense, artificial intelligence now demands to be ‘disarmed,’ freed from logics that turn it into an instrument of domination, exclusion and death,” he added. Before him, Christopher Olah, co-founder of Anthropic, the developer of Claude and Mythos — a generative AI system so sophisticated it has triggered global alarm over its potential to undermine cybersecurity — took the floor. “We need moral voices that the incentives cannot bend. We need more of the world — religious communities, civil society, scholars, governments — to do what His Holiness has done here: to take this seriously.”

In the 1891 encyclical Rerum Novarum, Leo XIII adapted the Church to the social reality brought by the turn-of-the-century change, calling for labor rights for the precarious industrial proletariat of the time that included children and pregnant women who faced 20-hour workdays, and criticizing the excesses of monopoly capitalism (43 years after the publication of the Communist Manifesto). The first U.S. pope intends to do the same in the context of AI, even though he presented his encyclical alongside a prominent member of the AI industry — a fact that has been noted (“It’s as if Leo XIII had presented Rerum Novarum together with Henry Ford,” an analyst commented).

As evidenced by the unbridled promotion and implementation of technology at the expense of human dignity, we are truly experiencing an eclipse of the sense of what it means to be human. It is imperative to recover an understanding of the true meaning and grandeur of humanity as…

— Pope Leo XIV (@Pontifex) May 22, 2026

The encyclical, published this Monday, is not presented solely as a way to address the social consequences of AI. The Church is under increasing scrutiny, and it sees in this technology a potential source of problems for the institution. “It is no revelation that the Catholic Church is experiencing one of the deepest crises in its history, fundamentally due to the loss of credibility because of widespread sexual abuse within its structure,” says theologian Juan José Tamayo, honorary emeritus professor at Carlos III University in Madrid and author of Cristianismo Radical (Radical Christianity). “AI is a communication mechanism for spreading the Catholic message, the Pope’s message, and that of the hierarchy in general, to harmonize it with the idea of a universal Church. That is why they need AI to convey a message to the entire citizenry that in some way neutralizes that crisis.”

Investments in AI

Time presents Pope Leo XIV as a “spiritual counterweight” to Silicon Valley’s leadership. But the pontiff’s rhetoric, and that of his predecessor Pope Francis — who was highly critical both of AI and of the industry developing it — contrasts with the Church’s investment policy.

The Vatican bank, the Institute for the Works of Religion (IOR), manages assets worth $6.85 billion, according to its own reports. The amount has almost tripled since 2020, when it totaled $2.56 billion. The institution devotes 10% of its budget to charitable works that reinforce “humanitarian assistance that responds to the most urgent needs of the poor and the marginalized.”

The rest of that money is invested. Where? The IOR does not make its positions public. What is known are the values that, in the Church’s view, are suitable for investment — that is, those “aligned with Catholic values.” In February this year the IOR and U.S. financial services firm Morningstar launched two stock indices, one European and one U.S., each including 50 mid- and large-cap companies that “adhere to Catholic teachings regarding life, social responsibility, and environmental protection.”

Among the principal holdings of those indices are companies such as Meta, Microsoft, Amazon and Alphabet (Google’s parent), as well as ASML, Intel or Nvidia Corp, Apple and Tesla. In other words: AI developers, cloud infrastructure providers, manufacturers of the hardware necessary for this technology to operate, and companies whose flagship products incorporate AI.

Excluded from these indices are companies tied to sectors the Vatican has for years advised against investing in: gambling, abortion, and products related to terminating pregnancies (such as condom manufacturers), the fossil fuels and mining industries (because of pollution), or the arms industry. That last exclusion contrasts with the fact that many of the tech firms that do have the Church’s approval have contracts with the Pentagon or have provided direct support for the Palestinian genocide.

The Vatican-branded indices serve as a guide for asset managers and funds — such as iCapital, Altum Faithful or Portocolom — that specialize in attracting savings from religious congregations or organizations that observe Catholic principles. They manage billions of euros in assets, so their moves are influential. And those indices prominently include many of the main AI developers.

The friar who put the Church in the conversation

On Saturday, September 13, 2025, Karol G performed before a packed St. Peter’s Square on a night that also featured Andrea Bocelli, John Legend, and Pharrell Williams. The unusual festival, Grace for the World, capped a week of reflection sessions organized by the Fratelli Tutti Foundation, established by Pope Francis. During those days a dozen Nobel laureates visited the Vatican to debate various topics.

There was a panel dedicated specifically to AI. The question to be addressed was how human, animal, and machine intelligences can coexist. The caliber of participants was high: Geoffrey Hinton, Nobel Prize winner in Physics and creator of the Transformer algorithm that made generative AI possible; Yoshua Bengio, another godfather of AI; Stuart Russell, also well known in the field; cosmologist Max Tegmark, and historian Yuval Noah Harari.

The organizer of that panel — able to bring together such leading figures from academia — was a Franciscan monk, Paolo Benanti. This theologian served as an AI adviser to Pope Francis, a role he has also performed for Italian Prime Minister Giorgia Meloni. Benanti’s writings reflect a human-centered view of AI. He supports the development of a sapient AI only if it remains strictly a tool.

“The research question itself already implies a deterministic and doomster view of AI,” one participant in those meetings told EL PAÍS. The debates were heated. Of the dozen experts convened, only two sought to focus the discussion on the current problems caused by AI, such as its high energy consumption, environmental impact, the biases many models embed, or its effect on mental health.

After the working group concluded, Tegmark, Bengio, Hinton and Russell promoted a new letter opposing the development of AGI (artificial general intelligence, the kind that would theoretically match or surpass human capacities). Among the signatories were Benanti and Steve Bannon, former communications adviser to Donald Trump.

“Benanti’s rhetoric is essentially similar to that of [OpenAI CEO Sam] Altman: AI is so efficient, powerful and dangerous that AGI is imminent, so the crucial thing is that the right people develop it,” said a participant in the Vatican discussions.

There is no scientific evidence to suggest we are close to seeing AGI. Nevertheless, the Church is making a move with its encyclical on AI — both because of the social consequences of this technology, emphasized by Pope Francis and now by Leo XIV, and because of the elephant in the room at the Holy See: how the development of machines that can provide answers — whether correct or incorrect — to every question, even existential ones, could affect the institution’s very existence.

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