Reports of an IPO mania are greatly exaggerated

Excitement over IPOs should be kept in perspective…

IPO proceeds as a percent of S&P 500 market capitalization

^{Source: Professor Jay Ritter, Initial Public Offerings: Updated Statistics, University of Florida; Bloomberg, as of June 17, 2026. Note: IPO data excludes Special Purpose Acquisition Vehicles; 2026 data includes SpaceX IPO.}

Initial public offerings (IPOs) are very much in the news in 2026. Google searches for “IPO” have already tripled this year compared to all of 2025. The SpaceX IPO on June 12 was the largest in US history. Anthropic and OpenAI have initiated the process to go public. Media narratives increasingly center around an IPO “mania,” suggesting frothy market conditions.

The chart puts all the excitement into proper perspective by measuring IPO proceeds relative to the value of the stock market. Yes, IPO activity is on the rise this year, but it remains a very small portion of the S&P 500 (less than 0.5% in most years), and well below IPO activity from the 1990s. Thus, IPOs are unlikely to materially influence the overall direction of the stock market.

Why are IPOs a much smaller factor in the stock market today than thirty years ago? The rise of private markets. Private equity and venture capital are often preferred over more highly regulated public markets to fund a company’s growth. Firms are staying private longer before considering an IPO, and some stay private forever.

What we’re watching this week

Wednesday

Micron Technology, a top-ten public company by market cap and a bellwether in computer chips, reports fiscal Q3 earnings. The Philadelphia Stock Exchange Semiconductor Index has risen about 100% in 2026.

Thursday

The PCE price index—historically the Fed’s preferred measure of inflation—is reported for May. Last week’s FOMC meeting, led by new Chair Kevin Warsh, emphasized bringing inflation down, declaring that “the committee will deliver price stability.”