Key Points

  • According to EY data, driven by accommodative monetary policy, total U.S. IPO proceeds in 2024 increased by 47% compared to 2023, and are expected to continue rising in 2025.
  • Mark Schwartz, EY Americas IPO and SPAC Advisory Leader, said that if the IPO wave in early 2025 receives strong market reception, it could drive more deal activity; however, expectations will depend on the magnitude and pace of further interest rate cuts by the Federal Reserve.
  • Schwartz expects that total U.S. IPO proceeds in 2025 could increase to a range of $40 billion to $50 billion, with the number of deals expected to fall within the historical average range of 125 to 150. According to EY statistics, U.S. IPO proceeds totaled $32.8 billion in 2024, with 183 deals completed.

In-Depth Analysis

In its report on U.S. and global IPOs, EY stated that President-elect Donald Trump plans to ease federal regulations,which could provide a boost to IPO activity this year. Additionally, a solid economic growth outlook, ample liquidity, and relatively high stock valuations could all boost IPO activity globally.

Schwartz noted: "The market is assessing who will be the winners and losers based on the implementation of policy changes. But at the end of the day, a pro-business environment is expected to be a significant tailwind for the IPO market." EY also noted that regardless of which party controls the White House, IPO activity typically picks up in the years following a presidential election.

EY said: "First movers in post-election years tend to be concentrated in the industrial, TMT (technology, media, telecom), and financial sectors. However, nearly all industries have experienced growth." Additionally, if Trump fulfills his campaign promises to lower corporate taxes and encourage domestic manufacturing and other production activities, it could further stimulate IPOs.

In its global report, EY stated that Trump's policies could benefit multiple industries worldwide, including energy, industrials, financial services, technology, cryptocurrency, and the health and life sciences sectors.

Meanwhile, EY cautioned that companies considering an IPO also face some potential headwinds. Increased federal spending and government restructuring could reignite inflation, push up U.S. Treasury yields, and trigger market volatility. EY said: "Future monetary policy decisions could introduce uncertainty, raising concerns about market stability and potentially affecting investor risk appetite."

Additionally, retaliatory tariffs and trade protectionism could increase costs for global companies that rely on imports, squeezing profitability and dampening IPO activity. EY also noted that the recent boom in AI-related IPOs could slow down—nearly 300 AI-related companies have gone public globally over the past four years. Schwartz said: "AI stories need to demonstrate tangible results over time for this trend to continue. As investors become more selective about the opportunities they are willing to support, returns in the form of new market opportunities or efficiency gains will be necessary."

Although IPO activity in 2024 was stronger than in 2023, it fell far short of 2021 levels—when 416 deals were completed with total proceeds of $155.8 billion. EY's report is based on IPOs recorded as of December 9, as well as deals expected to close by the end of 2024.

Editor's Note: This article has been updated to correct the first quote in the second paragraph.