Why IPOs Are Everywhere Right Now — and What It Means for Investors

You can't log on to the internet these days without seeing something about an initial public offering, or IPO. News, commentary and memes about IPOs from SpaceX, Anthropic and OpenAI are flooding social media feeds — and driving the discourse for the first time in years.

What's changed? Why is everyone talking about IPOs all of a sudden?

Angela Lee, a Columbia Business School professor who teaches venture capital and personal finance, says it's partially because "we've had an atypical few years" in terms of IPO volume.

Data from the U.S. Securities and Exchange Commission shows that 492 companies went public in 2020, followed by 1,078 in 2021. Then the number of IPOs dipped, cratering at just 169 in 2023. It's finally rebounding, so Lee says part of the reason we're seeing so much buzz is that "it feels like 2026 is coming out of that drop."

Investors are largely optimistic about the stock market. Lee says folks have become accustomed to the low-interest-rate environment (or at least have gotten past their post-pandemic "we need to wait and see what happens" phase) and the economic upheaval caused by global events (or at least have "a broader acceptance of some of the geopolitical uncertainty").

Case in point: The Nasdaq — the second-largest stock exchange in the world — closed at an all-time high in late May. So did the S&P 500, an index that tracks 500 of the biggest public companies in the U.S.

"People like to sell IPOs when the market is high," says Neil McDonald, the U.S. CEO of Moomoo, a trading platform. "Nobody wants to bring an IPO when the market's down, because it's going to be priced low."

Joel Shulman, CEO and CIO of ERShares, says the downturn of previous years has led to a backlog. Companies have been "waiting, waiting, waiting," and although there are lingering concerns about what'll happen with the job market, Iran war and overall economy, many firms have decided the time is right to take the plunge.

That includes three high-profile companies: SpaceX, which is expected to IPO on Friday; Anthropic, which filed for its IPO on June 1; and OpenAI, which filed Monday. These are "massive companies with a lot of potential," Lee says. "That's why they're buzzy."

These aren't typical IPOs

All three have massive valuations, a term that refers to how much a business is worth. Anthropic is valued at $900 billion. The Wall Street Journal reports that SpaceX is tracking for $1.75 trillion.

These are much bigger numbers than we're used to seeing. "For the first time, we're going to have companies valued with a T," Lee adds.

One of the main reasons companies go public is to access capital. Anthropic, for example, needs a ton of artificial intelligence infrastructure to keep supporting services like Claude. In fact, it recently agreed to pay xAI — yup, as in Elon Musk's company — $1.25 billion per month for compute (aka processing power). Going public opens up a new channel of cash to help offset these and other expenses.

McDonald says another unique thing happening is that everyday investors are primed to have access to these IPOs. Usually, 90% of shares of popular IPOs are reserved for institutional investors. But both OpenAI and SpaceX have indicated they'll make a significant portion of their shares available to retail investors.

Even so, backing these trendy IPOs is not necessarily a financial move you should make.

"The average investor should ignore this," Lee says.

It's common for companies that IPO to struggle after their first day(s) listed on stock exchanges. A 2021 analysis found about two-thirds of IPOs underperformed the market three years later.

"Just because something goes public does not mean it's going to appreciate," says Shulman.

Everyday investors are generally better off keeping the bulk of their portfolios in ETFs and index funds that include these buzzy companies as opposed to funneling money into potentially volatile single stocks, Lee adds. If you have a solid financial foundation and can't resist the excitement, you can try investing a very small portion — maybe 5% of your total portfolio — into IPOs like these.