Goldman Sachs Report: 2026 IPO Market Reaches $125 Billion Record; Experts Say Bubble Not Imminent

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The U.S. IPO market in 2026 has raised over $125 billion, surpassing the full-year record set in 2021. The market is concerned about two things: Is this a warning sign of the cycle’s end? And can the market absorb so many new stocks?

Goldman Sachs enlisted three experts: its chief U.S. equity strategist Ben Snider, IPO research authority Jay Ritter, and Acadian portfolio manager Owen Lamont. Their views differed. Snider said there’s no need to worry too much, as late-cycle signals haven’t appeared yet and the market’s absorption capacity has been underestimated. Ritter said high issuance volumes do predict lower returns, but this signal is only slightly better than random. Lamont said the wave of issuances is one of the four horsemen of a bubble, but it may indicate the bubble has only just begun and is far from ending.

The consensus among the three is that the number of IPOs is far below historical bubble levels, and first-day gains have not gone out of control—no real warning signs have yet appeared.

Since 2026, U.S. IPO fundraising has reached approximately $125 billion, surpassing the full-year 2021 record of $120 billion. Goldman Sachs expects total fundraising for the year to exceed $200 billion.

But behind the numbers lie structural issues. The record-high financing amounts have been driven primarily by a few ultra-large tech companies whose IPOs contributed the bulk of the increase, while the actual number of IPOs remains relatively low. Since 2026, only about 60 companies have gone public—slightly above the same period in 2021, but far below the annual totals of around 400 in 1999 and around 250 in 2021. Goldman Sachs’ IPO barometer indicates that the current environment is merely normalizing, not booming.

Private equity and venture capital have accumulated approximately $4 trillion in unrealized value and are accelerating exits as the IPO window reopens. AI-themed drives unusually large transactions, with substantial funding required for AI infrastructure through both IPOs and secondary offerings or bond issuances by existing companies.

Ben Snider, Goldman Sachs' Chief U.S. Equity Strategist, believes there's no need to worry too much.

Snider believes that late-cycle warning signals worrying the market are not evident today. IPO activity is rising but not extreme, with IPO valuations only slightly above historical averages and far below previous bubble periods. Total equity supply in 2026 is projected to account for only about 1% of the Russell 3000’s market capitalization, matching the 2015–2019 average and remaining below the 1.5% seen in 2021 and the 2% during the dot-com bubble.

Demand side is equally healthy. S&P 500 buybacks rose 4% year-over-year in the first quarter, and strategic M&A announcements increased by 100% year-over-year. The household sector has shifted from being a net seller during the dot-com bubble to a net buyer in recent years, with funds flowing in through ETFs and mutual funds. Foreign investors' ownership share has risen from 6% in 1995 to 18% today.

Although hyperscale companies have slowed buybacks due to reduced AI-related capital expenditures, AI beneficiaries such as banks and semiconductor firms continue to expand their buybacks. NVIDIA recently added an $80 billion buyback authorization, bringing the total announced buybacks for the year to a record $960 billion. Goldman Sachs forecasts total buybacks of approximately $1.3 trillion in 2026, sufficient to offset new supply from IPOs and lock-up expirations.

Snider believes that IPOs have a self-regulating mechanism: they continue only when demand is sufficient. If the market cannot absorb the supply, it naturally limits future offerings.

Jay Ritter, director of the IPO Research Center at the University of Florida, believes the signals are present but weak.

Ritter points out that high issuance volumes do predict lower future market returns, but the accuracy of this prediction is only slightly above random, at about 52%. Relying on IPOs to identify market turning points is unreliable; after Greenspan’s 1996 comment on “irrational exuberance,” the market continued to rise for another 3.5 years.

Ritter’s long-term research shows that, after excluding first-day gains, IPOs on average underperform the market over the three years following listing. However, he highlights several exceptions. The technology sector has been the best-performing segment in the IPO market; companies with annual revenues exceeding $100 million generally keep pace with the market, and technology firms with dual-class share structures actually outperform. This structure allows companies to issue a large number of low-voting shares to incentivize employees while enabling founders to maintain control through high-voting shares, giving management a strong incentive to focus on stock price performance.

Owen Lamont, Senior Vice President and Portfolio Manager at Acadian Asset Management, believes that the wave of issuances is one of the Four Horsemen of the bubble.

Lamont is the most cautious. He views large-scale equity offerings as one of the four signs of a market bubble, believing that companies are smart and tend to issue stock when their prices are overvalued. This signal was effective in 2021, when the massive wave of SPACs and IPOs served as a good time to underweight U.S. equities.

But he also emphasized that a wave of issuances does not necessarily mean the market has reached its peak. The IPO wave of the 1990s lasted for several years, as did Japan’s asset bubble in the late 1980s. Therefore, a wave of issuances may indicate that the bubble has only just begun, far from its end.

Lamont noted that he is more focused on first-day price gains. If first-day gains far exceed the normal 15% to 20% range and enter the 100% or higher territory—as was common in 1999—that would be a clear sign of speculative frenzy. Currently, except for a few exceptions, first-day gains are not extreme.

Regarding IPO investing, Lamont offers a vivid analogy: an IPO is like a banana—it needs to ripen before it’s ready to eat. Waiting one to three years after the listing to buy is a better strategy. He also warns that if a wave of debt offerings coincides with a wave of equity offerings, it’s a clearer negative signal that overall corporate valuations may be inflated.

The situation in Europe differs from that in the U.S. According to Goldman Sachs global strategists Peter Oppenheimer and Guillaume Jaisson, equity financing in Europe over the past 12 months exceeded €200 billion, representing just 1.7% of market capitalization—slightly above the long-term average of 1.4%. After accounting for buybacks and redemptions, net supply remains slightly negative. The real issue in Europe is not the scale of issuance, but insufficient domestic capital inflows. Only about 40 IPOs occurred over the past year, far below the normal level of approximately 100. This creates a self-reinforcing dynamic: domestic investors, facing a scarcity of growth stocks, withdraw from local markets, while growth-oriented companies opt for other listing venues to access deeper pools of capital.

The situation in Hong Kong is more positive. In 2025, Hong Kong’s IPO market experienced a strong recovery, with 119 companies raising $37 billion. In the first half of 2026, 84 companies have already raised $27 billion, with full-year projections reaching $60 billion. The average return over the three months following IPOs is approximately 60%, with a median return of around 20%, significantly outperforming previous years. Goldman Sachs China strategist Si Fu expects around $110 billion in equity supply in Hong Kong in 2026, comprising $60 billion from new H-share IPOs and $50 billion from secondary offerings, which will be easily absorbed by demand exceeding $400 billion from corporate dividends, southbound capital flows, and global capital reallocation.

The most interesting aspect of this Top of Mind is how the three respondents interpreted the same set of data differently. Snider, seeing record IPO amounts but modest numbers, concluded that the market is normalizing. Lamont, looking at the same data, concluded that a wave may be forming. Neither perspective is right or wrong—only different in time horizon. Snider is assessing current supply and demand balance, while Lamont is analyzing historical patterns. Both judgments can be valid simultaneously: normalization now, potentially turning into a bubble in two to three years.

Ritter’s perspective adds another dimension. While underperformance relative to the market in the early stages of IPOs has been a 60-year trend, exceptions exist in the technology sector, for large-revenue companies, and for dual-class share structures. These exceptions demonstrate that broadly shorting IPOs may cause you to miss true winners. NVIDIA, which went public in 1999 with a $600 million valuation, was also part of this group of high-valued tech IPOs.

Insights from Goldman Sachs are also worth noting. Snider, as a strategist, is relatively optimistic; Oppenheimer, as a strategist, focuses on Europe’s structural disadvantages; and Lynam, as a credit strategist, warns of saturation in the debt market. The differing perspectives within the same institution across functions are more instructive than any single conclusion.

Disclaimer

This article is a compilation and interpretation by Chaoxiang Research of a third-party brokerage research report (Goldman Sachs, July 20, 2026). The ratings, price targets, earnings forecasts, and related judgments cited herein are the views of the brokerage's analysts and represent the position of their respective institution, not the views of Chaoxiang Research, nor do they constitute any investment advice.

The market carries risks; make decisions independently. This article should not be used as a basis for buying or selling any securities.