Prime Highlights:
- The IPO market is rebounding after a few slow years, with 2026 set to bring high-profile listings like SpaceX and OpenAI.
- While the boom offers more opportunities to invest early in promising companies, investors should stay cautious due to potential risks.
Key Facts:
- Historical trends show that large IPO waves can be risky: 1999 IPOs had three-year returns of -48%, and 2021 saw -49% over three years.
- Companies going public during slower periods often have more stable, long-term potential compared with those launching during a busy IPO market.
Background:
The IPO market is picking up, and many big companies are expected to go public in 2026. Investors are eagerly anticipating major debuts, including SpaceX and OpenAI, signaling renewed optimism in the U.S. equity markets.
The frenzy is reminiscent of 1999, when hundreds of companies went public, giving early investors in firms like Nvidia and BlackRock extraordinary long-term returns. While this year’s market is unlikely to reach the same historic heights, experts predict significantly more choices than the recent past, when only 38 companies launched IPOs.
“We’re going to see some companies go public that are going to shape the American technology and economic landscape for the next decade,” says Matt Kennedy, senior strategist at Renaissance Capital.
However, experts also caution investors to temper their enthusiasm. History shows that large waves of IPOs can be risky. Jay Ritter, a professor at the University of Florida who studies IPOs, says that while some companies perform very well, most new listings don’t. For example, IPOs in 1999 had three-year returns of -48%, and in 2021, when 311 companies went public, the overall three-year return was -49%.
Kennedy adds that when many companies rush to go public, smaller or unprofitable businesses can make it to the market. Even strong companies may come at high prices, which raises the risk of future losses.
For those looking for the next big success, the 2026 IPO market is exciting, but careful research and smart choices are important.
