The Biggest IPO Year Ever Is Not a Reason to Change Your Plan

2026 is on track to be the biggest year ever for initial public offerings in the U.S. stock market. SpaceX has already completed the largest IPO in history, measured by capital raised, and Anthropic is actively preparing for its own listing. ^[4]. After years of investors hearing that the most interesting startups were staying private for longer, momentum finally seems to be shifting back in favor of public markets.

What Is an IPO?

An initial public offering, or IPO, occurs when a privately owned business sells shares to the public for the first time and begins trading on an exchange. Before the IPO, ownership is generally limited to founders, employees, and a small circle of professional investors and venture capital funds. Outsiders only see what the company chooses to disclose.

The process works roughly like this: A company hires investment banks to underwrite the deal and files a registration statement with the Securities and Exchange Commission (called an S-1), which becomes the first comprehensive public record of its finances, risks, and ownership. Executives then visit with institutional investors through a roadshow to build demand for the shares. Banks typically set the offering price the night before trading begins, allocate shares to institutions at that price, and the stock begins trading the next morning.

Buyer Beware

Three features of the IPO process are often misunderstood:

• The offering price is not the price most investors pay. Institutions buy at the IPO price; individuals generally buy in the open market after trading begins. Market prices are determined by supply and demand. When an IPO “pops” on its first day, those gains belong to people who were allocated shares before trading began.
• The company controls the timing. Businesses go public when conditions favor sellers. That’s management’s job, but it should inform how you read the enthusiasm around any deal.
• Early trading is thin by design. Only a fraction of a company’s shares are sold in most IPOs. Insiders are usually barred from selling for a set period afterward (called the “lock-up period”). Limited liquidity can support the share price in the short term, but pressure it later as more shares become available.

2026’s IPO Market Is Off to a Strong Start

Companies have already raised more than $150 billion in the U.S. stock market so far in 2026 ^[2], a roughly 250% increase from 2025’s full-year total. That’s on pace to exceed the previous full-year record, set in 2021. Two offerings account for most of this sum. SpaceX, the pioneer of reusable rockets and satellite-based telecommunications, raised approximately $86 billion including the underwriters’ full over-allotment exercise, at a market value near $1.8 trillion ^[1]. SK Hynix, the South Korean maker of high-speed memory chips used for artificial intelligence, raised roughly $27 billion by listing American depositary shares for the first time ^[3] (this wasn’t technically an IPO, because SK Hynix was already listed on the Korea Stock Exchange).

But History Advises Caution

The last time the IPO market was this hot was 2021. Before that, it was the dot-com bubble of the late 1990s. Like today, those were both times of investor exuberance about the technology sector. But they serve as cautionary tales.

The Renaissance IPO Exchange-Traded Fund (ticker IPO) invests in recently listed U.S. companies, so it can serve as a proxy for the IPO market. This ETF enjoyed a huge run starting around the time of the COVID pandemic in 2020, capitalizing on investor enthusiasm for electric vehicles, software-as-a-service, and cryptocurrencies. It peaked in February 2021 but subsequently crashed by nearly 70%, and has yet to regain its 2021 highs. Investors who bought during the 2021 IPO mania have significantly underperformed the S&P 500. So have investors who held the ETF over the past 10 years.

Chart: Renaissance IPO ETF vs. S&P 500, 10-year performance

The Internet was another revolutionary technology that set off a booming IPO market in the late-90s. That technology really did end up changing the world, and it spawned the creation of several huge and successful tech companies. But for every Google or Amazon, there were many more dot-com startups that failed. One study by the IPO Initiative found that the average IPO from 1999-2000 lost more than half its value over the subsequent three years.

AI IPOs in the Pipeline

The next hot IPOs on investors’ radars are Anthropic and OpenAI, the two leading developers of artificial intelligence models. Anthropic is the company behind Claude, which has enjoyed breakout success this year thanks to its Claude Code software development agent. OpenAI first set off the AI frenzy with its launch of ChatGPT in November 2022, and remains Anthropic’s closest rival.

Anthropic is actively preparing for a listing that could come as soon as this fall, with OpenAI likely to follow later in 2026 or early in 2027 ^[4]. Both companies have been growing incredibly quickly and are hoping for valuations north of $1 trillion. There’s little doubt that AI will change the world, and these companies are pushing the frontier of what AI can do. It’s no wonder investors are excited.

AI Presents a Unique Challenge

On the other hand, the AI boom presents a unique challenge: Artificial intelligence requires spending many billions of dollars on computing capacity. The lead time for a new datacenter can be multiple years, making it difficult to match supply with demand. If AI companies overestimate future demand, they risk building or buying too much capacity, which could cause serious financial difficulties.

That’s on top of the usual concerns about valuation, competition, whether today’s leaders can sustain their technology edge, and where value will end up flowing in a brand-new industry. Much of the value from AI may end up being captured by consumers or infrastructure providers, rather than AI model builders.

Don’t Be Tempted to Skip the Line

When investors are this excited about upcoming IPOs, they naturally start asking whether they can get in ahead of time. Various financial companies have started marketing “pre-IPO access” to capitalize on this demand. Once again, investor caution is warranted.

Many private companies impose strict limits on who can own, buy, or sell their stock. Pre-IPO marketplaces try to skirt these rules with “special purpose vehicles,” but investors in such funds may not end up owning the underlying assets they think they own. Anthropic has gone so far as to explicitly state that any unauthorized transfers of its stock are void, and will not be recognized by the company.

Aside from legal uncertainty, pre-IPO shares come with an elevated risk of fraud, excessive fees, or shares being sold at inflated prices. Investors should be wary of any deal that sounds too good to be true.

A Disciplined Approach to a Hot IPO Market

None of the above means investors should ignore the IPO market entirely. It just means we need to apply the same discipline we would to any other investment decision. Here are some principles to keep in mind:

• Valuation matters. A great business won’t be a great investment if you pay too high of a price. Because companies choose when to come public and how many shares to sell, investors’ default assumption should be that IPOs are rarely bargains when they first start trading.
• Diversification is critical. Ask yourself if you already have exposure to similar themes through your existing holdings. If you do choose to invest in a recent IPO, be sure to consider the downside risk as well as the potential upside.
• You don’t have to participate. As Warren Buffett famously said, “there are no called strikes in investing.” Even if it feels like everyone around you is piling into the latest investing fad, it doesn’t mean you have to follow.

Speak to a Trajan Wealth Fiduciary Advisor

Navigating a hype-filled market requires more than just discipline; it may require an objective, outside perspective. If you are wondering how the current IPO landscape fits into your broader financial plan, or if you need help evaluating the risks of new market offerings, you don’t have to make those decisions alone. Speak to a Trajan Wealth fiduciary advisor to ensure your portfolio remains properly diversified and aligned with your long-term goals.

Examples are for illustrative purposes only and are not intended as investment advice. Past performance doesn’t guarantee future results. Sources: Nasdaq, IPO Initiative, Anthropic, Bloomberg, Trajan Wealth estimates.

[1] SpaceX Said to Cut IPO Valuation Goal to at Least $1.8 Trillion, Bloomberg News, May 29, 2026
https://www.bloomberg.com/news/articles/2026-05-29/spacex-lowers-ipo-valuation-target-to-at-least-1-8-trillion

[2] SpaceX IPO Takeaways: SPCX Closes at $161, Jumping 19% After Record Debut, CNBC, June 12, 2026
https://www.cnbc.com/2026/06/12/spacex-ipo-spcx-live-updates.html

[3] Renaissance Capital’s 2Q 2026 US IPO Market Review, Renaissance Capital
https://www.renaissancecapital.com/IPO-Center/News/120034/Renaissance-Capitals-2Q-2026-US-IPO-Market-Review

[4] Renaissance Capital Forecasts Busy Fall IPO Season With Record $146 Billion in Proceeds, Renaissance Capital Fall 2026 US IPO Preview, September 8, 2026 https://www.renaissancecapital.com/IPO-Center/Stats

[5] SK Hynix Raises $26.5 Billion in Biggest Foreign Debut in US, Bloomberg News, July 9, 2026
https://www.bloomberg.com/news/articles/2026-07-09/sk-hynix-is-said-to-price-us-share-offering-at-149-apiece-mrdz562z

[6] Ritter, Jay R. Initial Public Offerings: Updated Statistics (long-run returns data). University of Florida, Warrington College of Business https://site.warrington.ufl.edu/ritter/ipo-data/