AI chipmaker Cerebras Systems Inc. added $6.38 billion with its May IPO.
Investor demand remained strong. Excluding SPACs, newly listed US companies have delivered a weighted-average return nearing 16% so far this year, almost double the S&P 500 Index's return this year, data compiled by Bloomberg show.
Eleven US IPOs have raised more than $1 billion in the first six months. "It's really the first time you could say that since 2021," said Will Connolly, a Goldman Sachs executive who leads equity capital markets in the Americas and whose firm served as lead left bank on SpaceX's IPO prospectus. "Even if you take out SpaceX's IPO, volumes are advancing rapidly."
Bankers expect the pace to keep up. SK Hynix Inc., a South Korean memory-chip maker, plans a $29 billion US listing set to jump-start the new quarter. Anthropic PBC may pursue a potential mega-deal IPO as soon as October.
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Two private-equity-backed companies have confidentially filed: Inspire Brands Inc. (owned by Roark Capital) and Jersey Mike's Subs (backed by Blackstone Inc.). Brookfield Corp.-backed data-center firm Csquare Inc. is about to begin the formal marketing phase of its offering.
"There could be another dozen jumbo IPOs - think $1 billion-plus - in the second half," said Keith Canton, who oversees private capital advisory and solutions worldwide at JPMorgan Chase & Co. He anticipates increased activity among companies supported by financial sponsors, including private equity firms.
But uncertainty about the Federal Reserve's next move could cause volatility. The possibility of interest rate cuts has been eliminated for this year, with traders preparing for a possible rate increase in the near future, and voters go to the polls in November to choose a new Congress. Arnaud Blanchard, a Morgan Stanley executive who serves as co-head of equity capital markets globally, said: "It's likely that activity will continue at a high pace over the summer so we're preparing for a busy Q3. "While Q4 is typically a constructive window, we could see some volatility around the midterm elections and so second half activity is likely to be front-loaded into Q3"."
Even amid record-breaking deals, not every IPO delivers lasting gains. Cerebras' stock has given back all of its increase from the past month and now trades near its offering price. Concerns about AI stocks, fueled partly by OpenAI delaying its IPO to 2027, could disrupt future offerings if those worries persist.
"For every Cerebras out there are four or five assets in PE that are more traditional IPO stories," said John Kolz, Barclays' head of equity capital markets worldwide. "So the discussion centers around the appropriate valuation, leverage and size judgments for a successful IPO."
Eddie Molloy, a Morgan Stanley executive who co-heads equity capital markets worldwide, noted: "In the past years, a lot of us have expected the IPO market to reopen with sponsor-driven activity, but it's been more driven by the capital needs associated with AI, or sponsor businesses tied to those thematics. "It does leave some deals in a holding pattern"."
Lisa Clyde, co-head of Bank of America Corp.'s global capital markets, described the flood of IPOs with a single word: "Epic." She added, "This will be the year everybody talks about for the foreseeable future."
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