2026 U.S. IPO Fundraising to Hit $225 Billion! Experts Warn: One of Four Market Bubble Signs Already Visible

2026 has only just passed its halfway mark, yet U.S. initial public offering (IPO) fundraising has already reached historic highs, sparking market debate over whether the economic cycle has entered its late stage.

Goldman Sachs invited three market experts to discuss whether the IPO boom signals an "end-of-cycle warning" and whether the market can absorb such a massive supply of new stocks. Participants included Ben Snider, Goldman Sachs’ chief U.S. equity strategist, Jay Ritter, director of the IPO Research Program at the University of Florida’s Warrington College of Business, and Owen Lamont, senior vice president and portfolio manager at Acadian Asset Management.

Among them, Lamont holds the most cautious stance. While he acknowledges that the surge in corporate stock issuance may reflect new capital expenditure demands driven by artificial intelligence (AI), historical patterns show that major technological revolutions often coincide with market bubbles, and companies typically rush to raise capital when stock prices are high.

Goldman Sachs forecasts that total U.S. IPO fundraising in 2026 will reach $225 billion, a record high.

"The Four Horsemen of the Market Bubble"

Lamont introduced a revised version of the "Four Horsemen of the Market Bubble." The term originally referred to four star stocks—Microsoft (MSFT-US), Cisco (CSCO-US), Intel (INTC-US), and Dell (DELL-US)—during the 1998–2000 dot-com bubble.

Lamont redefined the four bubble indicators as:

- Market valuations are excessively high - Investors believe prices will keep rising despite knowing valuations are inflated ("bubble faith") - Corporations aggressively issuing equity - Massive inflows of capital into the market

He noted that the current IPO boom already meets at least one of these criteria. However, since IPO booms often last for years, this may signal the beginning of a bubble rather than its end.

He also pointed out that there have been relatively few cases of IPOs surging on their first trading day, suggesting the market has not yet reached extreme speculative levels.

Additionally, Lamont warned that corporate bond issuance, not just stock issuance, deserves attention. Goldman Sachs’ chief credit strategist, Amanda Lynam, recently cautioned that rising market supply and issuer concentration could pose risks.

IPOs Typically Underperform the Market in Early Years

Jenny Grimberg, Goldman Sachs’ executive director of global macro research who moderated the discussion, noted that regardless of whether the IPO boom signals a market warning, historical data shows that newly listed stocks typically underperform the broader market in their first few years.

Therefore, Lamont advised investors to remain patient, using the analogy: "IPOs are like bananas—you should let them ripen before eating."

Another concern for him is that some major index providers have begun including large IPOs in indices earlier than usual. For example, the Nasdaq 100 Index recently included SpaceX (SPCX-US) ahead of schedule, a move Lamont disagrees with.

Goldman: The Market Can Absorb New Stock Supply

In contrast, Snider and Ritter expressed more optimistic views.

Snider noted that the total U.S. equity market capitalization is around $75 trillion, and the estimated corporate equity issuance for this year is about $700 billion—representing a limited share of the overall market.

He also believes the IPO market has a self-regulating mechanism: if demand is insufficient, new listings will naturally fail to proceed.

Goldman Sachs pointed out that IPO companies today generally have stronger profitability compared to those during previous IPO booms.

Ritter added that while historically heavy IPO issuance has often preceded periods of low market returns, U.S. corporations have returned approximately $1.6 trillion to investors through buybacks and dividends in recent years, indicating the market still has capacity to absorb new supply.

Apollo: IPOs Since 2019 Have Generally Underperformed the Market Over Three Years

As the U.S. IPO market heats up, alternative asset manager Apollo Global Management warned that IPOs in recent years have generally underperformed the broader market.

Apollo’s chief economist, Torsten Slok, stated that since 2019, the average three-year return of U.S. IPOs has lagged behind the overall stock market. Key reasons include high initial valuations, unfavorable interest rate environments, lower-quality companies going public earlier, and market returns being highly concentrated in a few large tech stocks.

Slok noted that the 2020–2021 IPO boom occurred during a period of zero interest rates, fiscal stimulus, and retail investor speculation, leading companies to go public at elevated valuations with limited upside potential. After the Federal Reserve (Fed) began its rate-hiking cycle in 2022, valuations were compressed, hitting unprofitable growth-oriented IPOs particularly hard.

Although the Fed has held rates steady recently, markets are now pricing in potential rate hikes by year-end due to inflation pressures.

Meanwhile, the U.S. bull market continues into 2026, with SpaceX completing the largest IPO in history in June, and expectations that AI firms like OpenAI and Anthropic will go public soon.

Slok believes the factors that have caused IPO underperformance since 2019 remain in place.

He expects future IPO valuations may inflate again, interest rates will likely remain higher than in the 2010s, and market returns will continue to be concentrated in a few large tech stocks, making it persistently difficult for new listings to outperform.

The S&P 500 Index has risen 9.5% year-to-date. The Renaissance IPO ETF, which tracks recent IPOs, has gained 17.5%, outperforming the S&P 500, though it does not currently hold SpaceX. SpaceX’s stock price has recently fallen below its IPO price.

"The factors suppressing IPO performance may persist," Slok said. "IPO valuations could inflate again, interest rates will likely remain above 2010s levels, and market returns remain concentrated in a few large tech stocks—new listings still face a high relative hurdle."