US IPOs in 2026 have already reached a record high in dollar terms, with approximately $125 billion so far this year and projected to exceed $200 billion for the entire year. Historically, large-scale IPO waves have often preceded major stock market crashes, sparking market discussion.
1. Goldman Sachs' chief US equity strategist, Ben Snider, believes the current activity is more of a "normalization" of the IPO market than a speculative bubble like those of 1999 or 2021. Despite the massive amounts involved, the number of deals (approximately 60 so far this year) is closer to the long-term median of around 100. In comparison, there were nearly 400 deals in 1999 and over 250 in 2021. The huge sums are primarily driven by a few large tech/AI companies, but this reflects "normalization" rather than a widespread bubble.
2. The current median IPO valuation (approximately 5 times enterprise value/revenue) is only slightly above the long-term average (approximately 4 times), far below the 9 times in 1999 or 7 times in 2021. Total corporate buybacks are projected to reach $1.3 trillion in 2026, sufficient to offset the increased supply of new shares. Furthermore, demand from retail and foreign investors remains healthy.
3. With the lock-up period for IPOs expiring in 2026, the market supply and demand balance will face greater challenges in 2027, but Snider believes many investors will choose to continue holding. However, he advises investors to hold a portfolio of IPOs rather than betting on a single company, focusing on valuation, revenue growth, and profit path, while closely monitoring first-day IPO returns (as a sentiment indicator) and the prospects of the AI industry. If AI expectations change dramatically, the entire IPO market could adjust accordingly.
