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SPACEX SET TO TEST A MORE DISCIPLINED IPO MARKET

With SpaceX’s blockbuster IPO expected to price later this week, the deal is drawing fresh attention to the broader state of the U.S. IPO market. DataTrek co-founder Jessica Rabe weighed in on Tuesday, providing a snapshot of where things stand -- and what it could mean going forward.

She says the IPO market matters for two key reasons. First, it’s a useful barometer of investor confidence. Second, the companies going public today often end up driving index-level returns in the years ahead.

So far this year, the results have been somewhat mixed. Many of the most notable IPOs haven’t delivered uniform gains since listing, but importantly, most were still trading above their IPO prices as of Monday’s close -- even after recent volatility tied to geopolitical tensions and oil price swings.

One clear trend, according to Rabe, is that quality is being rewarded. Some of the top-performing new listings -- including Forgent Power Solutions FPS.N, Cerebras Systems CBRS.O, and Fervo Energy FRVO.O -- are tied to AI infrastructure and energy. Those have been two of the market’s strongest secular themes, and investors are clearly favoring companies with that kind of structural tailwind.

Another notable shift: today’s IPOs tend to be more mature businesses. Many are debuting with multi-billion-dollar valuations, suggesting the pipeline is less about early-stage speculation and more about established companies coming to market.

Issuance levels also support that view. Rabe says there have been 68 IPOs so far this year, compared with 90 last year, which is still well below the boom periods of 1999 and 2021. In other words, this is nowhere near the kind of frothy conditions seen in past speculative cycles.

Rabe’s takeaway is that investors are still willing to fund growth -- but only when it’s backed by solid business models and durable competitive advantages. The big question now is whether that discipline holds once SpaceX hits the market. If it does, 2026 could mark a genuine reopening of the U.S. IPO market.

(Terence Gabriel)

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