Wall Street's hopes for a 2025 IPO bonanza are being put to the test
Hopes for an IPO bonanza in the first year of the new Trump era are being put to the test.
Several tech companies, including CoreWeave, buy now, pay later app Klarna, and social media platform Discord, are setting out to go public sometime over the second quarter.
But those plans could change if the stock market’s recent whipsaw movements persist. Customer service software provider Gensys has already postponed its plans to go public in April or May, according to a report from the Information.
Some companies that have tested the public markets so far this year have experienced setbacks. One is Venture Global Inc. (VG), a liquefied natural gas exporter that watched its stock fall roughly 60% since a January listing.
“The early IPOs that we have seen … haven’t really given a vote of confidence for other companies to follow,” Brianne Lynch, EquityZen head of market insight, told Yahoo Finance, citing the example of Venture Global.
“I think a lot of investors are hoping a Big Tech company like CoreWeave could be the one to reverse that trend because, certainly, we aren’t seeing strong IPO traction yet.”
The good news for Wall Street is that, so far this year, the total value of US IPOs is up 62%, according to Dealogic, hitting $10 billion as of March 11. The number of deals has nearly doubled, to 63 from 33 during the same period in 2024.
But those results are still well short of 2021, the last boom year for dealmaking. The value of 2025’s IPO deals so far is on track to underperform the average year of the past decade, while the number of deals so far is higher.
“Right now, our outlook is a little bit negative,” Avery Marquez, a portfolio manager for IPO-focused ETF provider Renaissance Capital, told Yahoo Finance. “We’ve got a little bit more caution than we did at the beginning of the year, but I think we’re very heartened by the fact that we’re still seeing companies filing.”
‘Big expectations’
At the beginning of the year, bankers were wildly optimistic that the Trump administration’s pro-growth agenda and deregulatory stance would unleash the market’s animal spirits and spur a flurry of US deals handled by big Wall Street banks such as JPMorgan Chase (JPM) and Goldman Sachs (GS).
But the uncertainty surrounding the administration’s trade policies is roiling markets and raising new concerns about the direction of the US economy and inflation, likely making it tougher for bankers and executives to pull the trigger on a public listing.
“There were a lot of big expectations for the first quarter,” said David Konrad, a Keefe, Bruyette & Woods analyst who covers money center and investment banks. But now, he said, “it’s very difficult to price an IPO when we’re getting these swings in the market.”
A major IPO to watch in the coming weeks or months is CoreWeave, a startup that provides data center infrastructure to the likes of Microsoft and Nvidia. It is proving to be integral to the booming needs created by tech companies’ artificial intelligence efforts.
It filed for an IPO in late February and aims to raise about $4 billion at an expected target valuation of more than $35 billion, according to a Bloomberg report.
CoreWeave’s IPO is being led by Morgan Stanley (MS), JPMorgan, and Goldman Sachs, along with 11 other advisers.
Nvidia is both a big backer and client to the company. So is ChatGPT creator OpenAI. This week, CoreWeave struck a $11.9 billion contract with OpenAI that included CoreWeave’s services, along with a private stake in the company.
One challenge ahead for a CoreWeave IPO is that investors are beginning to reset the big bets they’ve made on the future of AI growth.
Companies like CoreWeave seeking to go public are weighing their recent concerns of market volatility against how quickly their private capital and insider demands for payouts need to be replenished, according to Renaissance’s Marquez.
“Normally, when you have a sell-off like the one that we’ve been having, in addition to just volatility and macro uncertainty, you’re seeing headlines of companies pumping the brakes, killing their IPO plan,” he said.
But “that just isn’t the case right now,” Marquez added.
However, Lynch of EquityZen expects that valuable startups considering their next move are content to grow in the private markets while they “wait out the volatility.”
“It’s questionable when these IPOs might happen,” she added.
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.
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