Stock bulls looking for the next hot Wall Street trade are increasingly turning to the busiest corner of the US market this year — initial public offerings.
Shares of newly public companies have trounced the broader benchmarks, with the weighted average performance of firms listing their shares on US exchanges soaring 41% in 2025, excluding financial vehicles such as blank-checks. That figure more than doubles gains in both the S&P 500 Index and the Nasdaq 100 Index.
The surge in performance is sparking interest from banks and asset managers. Goldman Sachs Group Inc. this month rolled out a Liquid IPO basket, allowing investors to track a universe of companies that have been public for more than 30 days.
The biggest deals have been the most lucrative. IPOs raising more than $1 billion have surged 77% on average, underscoring investor appetite for size and liquidity. Among the standouts are Circle Internet Group Inc., which has climbed 324%, CoreWeave Inc., up more than 233%, and Bullish, which has advanced 83% since its debut.
“The IPO performance this year has been driven by several supporting factors, but perhaps the most important is that success begets success,” Will Braeutigam, US capital markets transactions leader at Deloitte, said in an email. He cited positive returns since 2024 for newly-listed firms, as well as rising retail interest and the relative maturity of the companies currently going public.
So far this year, firms have raised $32 billion on US exchanges, a sharp rebound after the market turbulence that followed tariff-driven uncertainty in April. September alone has been the busiest month for IPOs since 2021 as the broader stock rally encouraged a wave of offerings.
Equity fund flows have helped IPO stocks trend higher, one of a range of macro and micro factors driving strong IPO performance in 2025, according to Stephane Gruffat, global head of equity capital markets syndicate at Deutsche Bank AG.
“The majority of new listings have been in compelling higher growth, disruptive, innovative sectors,” Gruffat said. The presence of cornerstone investors in some cases has also helped. So-called cornerstones agree to buy shares during the marketing period, before the IPO has been priced.
The starting size and valuation of the deals has been another factor, Gruffat said. Circle’s listing is just one example of an IPO where excitement increased as the number of shares and the price range were increased during the marketing process. The stablecoin issuer ultimately sold even more stock in the IPO, pricing the deal above the already-raised range, with the momentum helping to spark a 168% first-day rally.
While crypto and artificial intelligence-related IPOs saw the biggest gains this year, the market is broadening out, with firms across sectors such as fintech, defense and aerospace, education and software going public.
To be sure, the majority of IPO companies end up disappointing in the long run. Three years after going public, almost two-thirds of traditional IPOs in the cohort from 2010 through 2020 underperformed the market, with 64% of them lagging market returns by more than 10%, according to Nasdaq research published in 2021.
Still, IPO-focused exchange-traded funds are enjoying renewed demand. The Renaissance IPO ETF and the First Trust US Equity Opportunities ETF have both outperformed the S&P 500 this year, posting 16% and 37% returns respectively.
Yet flows into these ETFs remain below pre-pandemic peaks. First Trust’s FPX has attracted $70 million in 2025, a turnaround after four years of outflows but still less than the $145.5 million that poured in a year before the pandemic. Renaissance’s IPO ETF has pulled in $3.6 million so far this year, compared with inflows of $586 million in 2020.
“With IPO-focused ETFs beating the S&P 500, we expect more flows coming into these products,” said James Seyffart, an ETF analyst at Bloomberg Intelligence.
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