Tech Firms Prepare for Mega IPOs in 2025 as Market Shows Signs of Awakening

The tech industry is gearing up for a potentially massive year in 2025 as the market for initial public offerings (IPOs) shows signs of awakening. Nasdaq president Nelson Griggs, speaking at the Forbes Iconoclast Summit in New York, expressed optimism about the upcoming year, stating that “25 will be a year of some of the mega tech IPOs you’ve been hearing about.” This comes as the energy in Silicon Valley rebounds, with companies securing funding at a rapid pace.

In recent years, the IPO market had been relatively dormant due to factors such as high interest rates, climbing inflation, and restricted capital flows following the COVID-19 pandemic. However, early indications in 2024 suggest a shift in this trend. Notably, two tech sector IPOs, an AI upstart and a popular social media platform, collectively raised $1.5 billion in the first quarter of the year. These successful offerings may be just the beginning of a broader trend.

Colin Stewart, Morgan Stanley’s global head of technology equity capital markets, has even suggested that a major tech firm could go public before the end of this year. Furthermore, he anticipates that 2025 will be an even better year for the markets. The positive signal for tech firms eyeing IPOs came last September when British chip maker Arm debuted on the Nasdaq, becoming the largest IPO of the year. Arm’s stock has since performed well, with a market capitalization of $166 billion.

Michal Katz, head of investment and corporate banking at Mizuho Americas, highlighted the growing number of unicorns, privately owned startups valued at over $1 billion, that need to go public. She emphasized the need for alternative avenues, such as mergers, acquisitions, and minority stakes, until markets like the Nasdaq open up to these companies. Katz stressed the importance of satisfying investor demand for returns on their investments.

The Nasdaq, known for its tech-heavy focus, has outperformed the S&P 500 this year, with a 19% return, surpassing it by 4 percentage points. This further underscores the positive sentiment surrounding the tech sector.