🌊 The 2025 IPO Wave: Winners, Losers, and What Investors Should Watch

Quote of the week: “Time is the friend of the wonderful business, the enemy of the mediocre” Warren Buffett.

The past few years have been quiet on the IPO front.

Sure, a few big names like Arm and Reddit grabbed headlines, but it’s been nothing like the IPO frenzy of 2017–2021, when giants like Uber , Airbnb , Spotify , CrowdStrike , Snowflake (and plenty more) all hit the public markets.

Now, though, 2025 is looking very different. Both the number of IPOs and the capital raised are on track to outpace the last three years combined.

And the thing is, successful IPOs attract more IPOs. Some will be genuine gems, while others, not so much.

That’s why this week, we’re digging into the IPO market, and more importantly, how you can improve your odds of spotting a winner.

What Happened in Markets this Week?

Here’s a quick summary of what’s been going on:

⚠️ Intel warns US stake could hurt international sales (Reuters)

• Intel’s CEO says geopolitical flare-ups and splintered supply chains could mess with Washington’s grip on the company.
• If tensions rise, expect tighter export controls, policy U-turns, or even a forced sell-off of the U.S. stake.
• Intel shares could take a hit, while rivals like AMD or TSMC might look safer by comparison.
• Watch for congressional noise, reviews from the Committee of Foreign Investments in the United States (CFIUS), and whether Intel keeps getting those sweet onshore incentives.
• Near-term volatility could offer tactical entry points, but long-term winners will be those diversifying manufacturing and securing resilient supply chains.

🪙 Gold hovers near record as Fed pressure rattles markets ( Yahoo )

• Trump’s anti-rate-hike criticisms are spooking investors who worry the Fed might lose its independence.
• That fear is fueling demand for gold, now flirting with all-time highs as a safety valve against political meddling.
• A strong gold bid means gold miners and ETFs shine, while risk assets and the dollar could wobble if Fed credibility slips.
• Investors are using the likes of Barrick Mining, Newmont , and gold ETFs, are acting as hedges. Real yields (yield after inflation) and central bank backbone are now the main plotlines.
• Keep an eye on inflation surprises and Fed pushback, because both will determine whether gold’s rise is structural or a cyclical flight to safety.

📈 Nvidia had a smashing quarter, but those data center sales numbers are mighty concerning ( Sherwood )

• Q2 revenue hit $46.7B with $26B net income, but data center sales slightly missed, triggering a 4% post-earnings dip.
• Growth instead came from gaming, with a record $4.3B haul, while “net other income” surged thanks to Nvidia’s stake in CoreWeave, up 175% last quarter.
• Export bans kept Nvidia out of China’s AI market until late in the quarter, highlighting geopolitical fragility despite blowout profits.
• Guidance is ahead of estimates, but investors should watch if hyperscaler capex keeps offsetting regulatory headwinds and cooling data center demand.
• Nvidia may be the first $4T giant, but even titans stumble when their crown jewel (data centers) flashes weakness.

📦 US box factories are folding fast ( Sherwood )

• About 9% of US cardboard production is shutting down in 2025, the steepest cuts since the financial crisis, with 2,500 jobs lost.
• Tariffs are choking exports, which make up 10–15% of US box demand, forcing players like International Paper , Georgia-Pacific, and Smurfit Westrock to mothball mills.
• Ironically, closures could lift utilization rates back into the 90% range, which boosts margins for survivors if demand holds steady.
• Their stocks aren’t cheap, IP and Packaging Corp. trade at ~20x forward earnings, but a tighter supply could give the sector a profitability pop.
• Tariffs may be crushing capacity, but leaner supply sets up box makers for fatter margins given costs would stay the same but output per mill would increase.

💸 🇳🇴 World’s largest sovereign wealth fund exits Caterpillar and five banks on Israel concerns ( CNBC )

• Norway’s $2T sovereign wealth fund is exiting Caterpillar and five Israeli banks, citing “unacceptable risk” of human rights violations linked to settlement activity.
• The move comes amid political heat at home, with NBIM trying to balance ethics guidelines against its mandate to deliver max returns.
• Caterpillar loses a $2.4B shareholder, while Israeli lenders face reputational and liquidity pressure, though the Tel Aviv exchange is still at record highs.
• For investors, this underscores rising ESG scrutiny and the risk of sudden divestment waves hitting names tied to conflict zones.
• Sovereign funds move slowly, until they don’t. When ethics clash with profits, exclusions can land hard and fast on global portfolios.

🪚 IPOs in 2025: Cutting Through the Hype

After a couple of sleepy years, the IPO market is back in the spotlight.

Just last week, two major announcements grabbed headlines:

1. 💳 Swedish fintech Klarna dusted off its plans to go public
2. 🧑‍💼 Trump Media revealed it’s launching a crypto company via a SPAC

So far this year, the number of U.S. IPOs is already matching the total for all of 2024. That’s a big deal given how shaky markets were earlier in the year.

US IPOs by Year - StockAnalysis.com

While not every IPO has been a home run, a few have absolutely taken off:

1. Coreweave had rough timing (its debut came just before “Liberation Day”), but since then, the stock has soared 140%.
2. Circle Internet Group priced its IPO at $31, started trading at $83 , and shot up to $260 within weeks. It’s since pulled back by half, but early investors are still up 3x.
3. Figma went public in July at $33, opened at $115 , and is now hovering around $70.
   1. If you got IPO allocation, you’ve doubled your money.
   2. If you bought at the open, you’re down ~40%.

✨ These kinds of standout IPOs tend to ignite investor excitement, and that ripple effect gives other companies the confidence to jump into the market.

But as the buzz builds, so does the need to separate real business potential from pure hype, which we’ll get into soon.

🌏 Beyond the U.S.: IPOs Around the World

U.S. listings tend to steal the spotlight, and for good reason. A U.S. IPO is a global badge of credibility.

It should be no surprise then that over half of all companies going public on U.S. exchanges in 2025 are foreign firms chasing that prestige.

Elsewhere in the world, IPO momentum is picking up, but it’s not evenly spread. A few key markets are doing the heavy lifting:

1. 🇮🇳 India is gearing up for a record-breaking year, with several heavyweight IPOs expected to land before December.
2. 🇨🇳 Greater China, including Hong Kong , is also having a standout year—accounting for about one-third of all IPOs globally.
3. 🌴 Southeast Asia (think Singapore ) is seeing a small bump in activity, but that’s off a very low base. The past few years have been quiet.
4. 🇬🇧 Over in Europe and the UK, things are much slower. Investors there seem t o be picking their battles, backing only the most promising opportunities.

One trend that is making a surprise return is SPAC (Special Purpose Acquisition Company) deals. T hose blank-check companies used to fast-track listings.

Crypto-related SPACs seem to be powering most of these deals, fueled by the Genius Act and growing interest around Bitcoin Treasury Companies.

Before we dive into the pros and cons of investing in IPOs, let’s quickly cover the key terminology. If you already know how IPOs work, feel free to skip ahead 👇

🏫 IPOs 101: Going Public

An Initial Public Offering (IPO) is when a private company makes its big debut, selling shares to the public and officially joining the stock exchange.

But that exciting moment when the stock starts trading is actually the final step in a long, behind-the-scenes process that can take months.

So, what actually happens during an IPO?

Here’s the play-by-play:

1. 📄 Regulatory filings come first. The big one is the prospectus, a detailed document laying out the company’s business plan and why it wants to go public.
2. 🧑‍💼 The company teams up with investment banks (aka underwriters), who help manage the whole process and drum up investor interest.
3. 📢 These banks take the company on a roadshow, pitching the business to big institutional investors and gauging appetite.
4. 🤝 They then agree on the deal structure, like how many shares to sell, what price range to target, and whether any price stabilization tricks will be used after the IPO.

Then the company has to figure out how much capital to raise (what they’ll use it for), while also considering liquidity (having enough shares in the market), and dilution (are existing owners giving up too much stake).

This is a balancing act, and it’s crucial.

Once the IPO date is set:

1. 📝 Underwriters invite their clients to bid for shares, which is mostly institutional investors.
2. 🧍‍♂️ Retail investors are usually offered a smaller slice of the pie, and only through specific brokers involved in the IPO.

When bidding ends, the underwriters:

1. ✍️ Set the final IPO price
2. 💰 Decide the total number of shares to be sold

Another balancing act here:

1. Price it too high → not enough buyers after the IPO
2. Price it too low → the company could leave serious cash on the table

What happens next?

Shares typically start trading the next day. The first price you see on a stock chart isn’t the IPO price; it’s the price of the first public trade . Issuers and banks usually hope to see that first trade come in above the IPO price and keep climbing from there.

📘 IPO Lingo You Should Know

Before diving into the risks and rewards of investing in IPOs, we need to decode a few key terms:

📊 Primary vs. Secondary Shares

1. Primary shares are n ew shares issued to raise fresh capital for the company.
2. Secondary shares refer to existing shareholders cashing out by converting their holdings into public shares.

✨ Knowing which one dominates in an IPO tells you who’s getting the money, the company or the insiders.

⏳ Lock-up Period

1. After an IPO, insiders (like execs and early investors) are usually barred from selling shares for 90 to 180 days.
2. This creates artificial scarcity early on, which can drive prices up.
3. But when that lock-up ends, you often get a wave of selling as insiders cash out.

🧊 Float

1. This is the number of shares available to trade publicly.
2. A small float, especially when insiders hold a big chunk, can cause big price swings.
3. In short: low float = high volatility. Arm Holdings is a good example of this.

🔁 Direct Listings vs. SPACs: Lookalikes With Key Differences

They might seem similar, but the mechanics are very different.

🪞 Direct Listings

1. Companies go public without raising new money
2. No new shares are issued; it’s just existing shareholders selling to the market. It’s simple, but there’s a catch:
   1. When things are going well, insiders don’t want to sell. But w hen sentiment turns, everyone wants out at once, which can cause chaos.

💰 SPACs (Special Purpose Acquisition Companies)

1. A SPAC is a shell company that goes public first with a blank cheque.
2. It then merges with a private company, bringing it to market without a traditional IPO.
3. SPACs are easier to list and have become wildly popular in recent years, with vastly mixed results.

But keep in mind:

1. The structure often favors the sponsor and big institutional players.
2. Minority investors can get a raw deal, especially in follow-on financing rounds.
3. And yes, SPACs require serious due diligence.

📜 Historical IPO Returns: Hits, Misses & Lessons Learned

Two of the most successful companies to go public in the last 20 years are Alphabet (formerly Google) and Meta (formerly Facebook).

Here’s what happened to their stock prices during the first five years:

Alphabet and Meta: First 5 Years - TradingView

Both companies were successful, growing and profitable when they listed, but their stock price moves couldn’t be more different.

Google’s shares traded higher from day one, while Facebook’s stock dropped 40% in the first few months before recovering

✨ The lesson here is that even with top-tier companies, sentiment and valuation can heavily sway the short-term outcome.

Finance professor Jay Ritter (University of Florida) has built the go-to database on IPO performance, covering 9,181 U.S. IPOs between 1980 and 2023. His findings are eye-opening:

1. The average “first-day pop” (IPO price → close of day one) is ~19%.
2. The average 3-year return is also just ~19% —well below the broader market.
3. Roughly 70% of IPOs underperform —it’s the rare outliers that drag the averages up.

So, while IPOs get a ton of hype, the average results are, frankly, underwhelming.

The data does show clear patterns. IPOs perform much better when the company:

1. 📊 Has $100M+ in pre-IPO revenue
2. 💵 Is already profitable, even with revenue under $100M
3. 💻 Operates in tech, though note: pre-dot-com IPOs were a graveyard.

The b ottom l ine is that if you’re chasing tiny, speculative IPOs, the odds are stacked against you. But the winners tend to emerge from those that start public life as profitable, scaled-up businesses.

🕵️‍♂️ 4 Tips for Assessing IPOs

Investing in an IPO isn’t wildly different from investing in any other company… but there are a few unique red flags and signals to watch for.

1️⃣ What’s the motivation for the IPO?

1. Some IPOs exist mainly to cash in on hype.
   1. A sudden pivot into the latest fad is usually a dead giveaway.
2. IPOs also give early investors and founders an exit.
   1. That’s not a bad thing, but if they truly believe in the company, they won’t be rushing to sell everything the moment their lock-up period expires.

2️⃣ Is there a clear path to profitability, and can the business scale?

High revenue growth can look exciting, but just keep in mind:

1. 📊 When numbers are tiny, it’s easy to post big growth just by spending aggressively.
   1. That doesn’t mean the growth is sustainable or even economically sensible.

Instead, dig into unit economics, customer churn, and whether there’s a credible path to profitability

3️⃣ Look at the risk disclosures in the prospectus.

Company roadshows and presentations are all best-case scenarios. But the prospectus is the document where the lawyers make sure the risks are clearly spelled out. Often, it’s a more honest look at what could go wrong.

Our risks section also points out some noteworthy risks. If a stock is in your watchlist or portfolio, you’ll be notified of any new risks we detect.

4️⃣ Keep monitoring the company after the IPO

The real test comes in the months that follow:

1. 📑 Quarterly reports
   1. Is management delivering what they promised?
2. ⏳ Lock-up expiries
   1. Are insiders holding or bailing?
3. 🧐 Analyst reports
   1. What’s the market’s evolving view?

Your narrative can change dramatically as fresh information comes in. For example, this narrative’s latest update explains why their point of view on the stock has changed.

Circle Internet Group - Simply Wall St

Another recent IPO is Figma. This narrative has received revised forecasts since the initial narrative was created.

💡 The Insight: Let the Market Come to You

Typically, opportunities are created for investors when the market underestimates a company’s potential - or when other investors panic or overreact to negative news.

As Warren Buffett said, "Be greedy when others are fearful and fearful when others are greedy."

An IPO is the final step in a months-long marketing campaign, so the odds of others being fearful are low. However, if it’s a quality company, and it’s trading below a fair value that you have confidence in , there’s no reason not to invest.

There’s also every chance that news and sentiment bring the price below your fair value estimate after the IPO. Irrational buying in the first few days and weeks can lead to irrational selling later.

You can keep track of recent IPOs with this stock screener by saving it and then adjusting the ‘ Days Since Listing’ metric under Advanced Filters. The screener below filters for recent IPOs with strong Future and Health scores.

IPOs in the last 12 months - Simply Wall St

Check it out! And then, add those stocks you’re interested in to your watchlist, set your fair value, and wait patiently for the right price where the odds are in your favor.

Key Events During the Next Week

Tuesday

🇪🇺 Eurozone Inflation YoY Flash

• 📉 Forecast: 2.1% (Previous 2%)
• ➡️ Why it matters: A slight uptick keeps pressure on the ECB and may delay rate cuts.

Wednesday

🇦🇺 Australia GDP YoY

• 📉 Forecast: 2.1% (Previous 1.3%)
• ➡️ Why it matters: A surprise rebound may reduce the case for RBA easing and lift the Aussie dollar.

🇺🇸 US JOLTs Job Openings

• 📉 Forecast: 7.3m (Previous 7.44m)
• ➡️ Why it matters: Fewer job openings suggest cooling demand for workers, adding to signs of labor market softness.

Friday

🇨🇦 Canada Unemployment Rate

• 📉 Previous: 6.9%
• ➡️ Why it matters: A high and possibly rising unemployment rate could push the BoC closer to cutting rates.

🇺🇸 US Nonfarm Payrolls

• 📉 Forecast: 50k (Previous 73k)
• ➡️ Why it matters: A continued hiring slowdown adds to evidence that the US labor market is losing steam.

🇺🇸 US Unemployment Rate

• 📉 Forecast: 4.2% (Previous 4.2%)
• ➡️ Why it matters: A steady print masks underlying job market weakness, keeping the Fed cautious.

Earnings season continues with some important software companies due to report. The largest include:

• Salesforce
• Broadcom
• Copart
• Kroger
• Zscaler
• Figma

Disclaimer

Simply Wall St analyst Michael Paige has a position in SPOT. BlackGoat is an employee of Simply Wall St, but has written a narrative in their capacity as an individual investor. Simply Wall St has no position in the company(s) mentioned. This article is general in nature.  We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Any narratives mentioned are general in nature and explore scenarios and estimates created by the authors. These narratives do not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company’s future performance and are exploratory in the ideas they cover. The fair value estimates are for informational purposes only and do not constitute a recommendation to buy or sell any stock. They do not take into account your objectives or financial situation. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com