JPMorgan eyes new research frontier with coverage of private firms, source says
With many industry-leading private companies delaying public listings, they are attracting a growing share of investor capital, prompting institutional investors to track them more closely at earlier stages.
Companies such as ChatGPT-maker OpenAI, Elon Musk's SpaceX and TikTok-parent Bytedance now hold valuations that rival or surpass several major S&P 500 firms, blurring the distinction between public and private market influence.
The largest U.S. lender released its first report on OpenAI, the company that spurred Wall Street's AI gold rush, according to an internal memo seen by Reuters.
Unlike traditional research notes, these brokerage reports will not feature estimates, price targets or ratings, Hussein Malik, J.P.Morgan's head of global research said in the memo, which highlighted AI and software as core areas for private company coverage.
"Private companies are becoming increasingly relevant to various industries, especially in the new economy space," Malik said.
"The goal of this offering is to support our investor clients by providing structured information and tracking, offering deeper insights into key disruptors and their impact on the sectors in which they operate."
Institutional investors are increasingly focused on private company research and investment opportunities as these firms develop technologies that influence mature sectors, the source added.
Nearly 1,500 private startups have achieved unicorn status, having raised funding at valuations above $1 billion, according to PitchBook's tracker.
North America leads globally with over 1,000 unicorns, collectively valued at nearly $4 trillion.
As private companies play a growing role in transforming legacy industries, Wall Street is adjusting to rising demand for insights into these influential firms, reflecting a shift in how market power is assessed.
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