U.S. IPO Proceeds Set to Quadruple in 2026? ETFs to Consider

Goldman Sachs analysts project a sharp rebound in U.S. IPO activity in 2026, forecasting total proceeds could quadruple to about $160 billion, driven by software and healthcare listings and a handful of late-stage tech/AI names. Mega-cap candidates such as SpaceX (reported exploration of an IPO valuing up to $1.5 trillion with as much as $50 billion in proceeds) and OpenAI (targeting a second-half 2026 IPO near a $1 trillion valuation) could disproportionately lift overall proceeds and investor appetite. Expectations of Fed rate cuts in 2026 and signals from SEC leadership favoring lighter disclosure for smaller/newly public companies add an accommodative backdrop that may encourage issuance and IPO-focused ETF interest. Managers should weigh sector concentration (tech/AI dominance) and valuation risk despite an otherwise constructive issuance outlook.

Analysis

Market structure: A 2026 IPO surge (Goldman’s $160B target implies ~4x 2025 issuance) benefits exchanges (NDAQ), lead banks (GS), and IPO-focused ETFs (IPO, IPOS, FPX, FPXI) through fee and underwriting revenue. Late-stage AI/space winners (private SpaceX/OpenAI/Anthropic) would concentrate proceeds—if three mega-deals materialize, expect 30–50% of issuance from <5 names, raising concentration and short-term liquidity risk. Increased supply of new equity will be absorbed only if Fed cuts expectations (2026) lower the term premium; absent cuts, higher rates could cap IPO valuations.

Risk assessment: Key tail risks are a failed mega-IPO (valuation reset), a regulatory U-turn by the SEC, or macro shock (recession) that defers listings—each could wipe out 30–60% of anticipated issuance. Near-term (days–months) drivers are filing cadence and market volatility spikes around S-1s; medium-term (6–12 months) is execution of listings and aftermarket performance; long-term (2+ years) is structural change to public-company economics and secondary market depth. Hidden dependency: heavy reliance on a handful of private giants means headline outcomes hinge on deal timing and lock-up behavior.

Trade implications: Tactical longs: selective exposure via IPO ETFs and NDAQ/GS with disciplined sizing (use call spreads to control cost); hedge macro tail with duration. Options: sell short-dated volatility after listings pop (30–60 days) and buy long-dated protection (LEAP puts) on concentrated AI names. Cross-asset: expect USD to soften if Fed cut priced in—raise EM equity/currency exposures and compress credit spreads; bond yields should trend lower into cuts, supporting long-duration treasuries as a hedge.

Contrarian angles: Consensus assumes smooth, record-breaking issuance; I see a >40% chance that issuance front-loads into 2026 and then stalls, leaving IPO ETFs with poor post-IPO returns and higher redemption risk. Historical parallels (2000 tech IPO boom, 2020 SPAC wave) show headline supply can precede multi-year underperformance; exchanges may compete on fees, capping NDAQ upside. Unintended consequence: lighter disclosure rules could reduce institutional allocations to new listings, lowering aftermarket liquidity and increasing volatility.

Key Decisions for Investors

• Establish a staggered long in Renaissance IPO ETF (IPO): start 1.5% of portfolio now, add another 1.5% by Jan 2026 if two of the following occur—SpaceX or OpenAI file S-1 or aggregate announced 2026 IPO pipeline >$50B. Exit/trim to 0.5% if IPO ETF AUM falls 20% from current level or 90-day average volume drops below $15M.
• Buy NASDAQ (NDAQ) exposure via a 12-month call spread (e.g., buy Jan 2027 1x ATM call, sell 1x 110% call) sized to 1.5% portfolio to capture listing fee upside; reduce by half if quarterly listing volumes grow <3% QoQ or if SEC final rule reduces listing fees by >20%.
• Short-term hedging: allocate 2% to long-duration Treasuries (buy TLT or 10y futures) if S&P 500 drops 8% from current levels or VIX spikes above 25 to protect against a macro-driven IPO freeze over next 3–6 months.
• Relative-value pair: go long IPO ETF IPO (notional 1%) and short equal notional of QQQ (1%) for 6–9 months to capture potential outperformance of fresh-issuance momentum versus mature tech; unwind if IPO ETF underperforms QQQ by 8% over a rolling 30-day period.
• Trigger-based regulatory monitor: if SEC publishes a final rule easing disclosure for small/new issuers within 60 days, increase IPO/sponsor exposure by +1–2% and add LEAP call exposure on high-quality pre-IPO names; if rule is delayed/reversed, reduce IPO exposure by 50%.