Surge in U.S. IPOs: Investors Eye AI and Crypto Opportunities

The U.S. initial public offering (IPO) market is experiencing a significant surge, with a total of **161 IPOs** recorded by September 30, 2025, according to data from Renaissance Capital. This figure already surpasses the **150 IPOs** completed throughout all of **2024**. The third quarter alone saw **64 IPOs** that collectively raised **$15.3 billion**, marking it as the most active quarter for new issuances since **2021**.

A notable trend in this year’s IPO landscape is the prevalence of companies tied to emerging technologies, particularly **artificial intelligence (AI)** and **cryptocurrency**. For instance, **CoreWeave (CRWV)**, which operates a cloud platform for AI computing, started trading at **$40 per share** in March and had reached **$137** by the end of September, reflecting a market capitalization of **$71 billion**. Similarly, **Circle Internet Group (CRCL)**, a trading platform for bitcoin and issuer of a stablecoin, saw its shares rise from **$31** in June to **$133**, giving it a market valuation of **$30 billion**. Both companies, however, have yet to achieve profitability, as highlighted by data from S&P Global Market Intelligence.

Investors are approaching this hot IPO market with a mix of enthusiasm and caution. Nick Einhorn, director of research at Renaissance, points out the risks associated with investing in IPOs during periods of high asset prices. “The danger is that when the cycle turns, IPO stocks can fall sharply,” he stated. Historically, IPOs have been viewed as risky investments, primarily because these companies tend to be newer and lack the established track records that typically characterize publicly traded firms.

The evolution of the IPO market reflects broader economic shifts. Originally, IPOs were a means for companies to raise capital for business expansion. Today, they often serve as an exit strategy for early investors and a liquidity option for employees compensated with stock. Einhorn also noted that the average first-day return for IPOs exceeding **$100 million** in market capitalization has been **27%** in **2025**, significantly higher than the **16%** seen in **2024**.

Investors may benefit from a more cautious approach when considering IPO stocks. One strategy is to wait until companies have established a track record post-debut, ideally after several quarterly earnings reports. Additionally, understanding when a company’s “lock-up period” ends—typically lasting **90 to 180 days**—is crucial, as this can lead to increased selling pressure once insiders are permitted to sell their shares.

For those looking for more stable investment options, Jay Ritter, a finance professor at the University of Florida known for his expertise in IPOs, advises focusing on more mature companies. His research indicates that companies with at least **$100 million** in revenue at the time of their IPO tend to perform on par with the broader market. Among this year’s IPOs, **42 companies** meet this criterion, including educational publisher **McGraw Hill (MH)** and online ticket reseller **StubHub Holdings (STUB)**.

Investors should also consider valuation metrics carefully, particularly for unprofitable firms. Ritter emphasizes the importance of applying standard investment evaluation methods, regardless of whether the stock has been trading for three months or thirty years. “Don’t think of it as an IPO or recent IPO; think of it as a stock,” he advised.

While many of 2025’s prominent IPOs revolve around innovative sectors, there are also traditional firms worth exploring. **Venture Global (VG)**, which focuses on liquefied natural gas in the U.S. Gulf Coast, went public to raise funds for its ambitious expansion plans. Despite its $31 billion in debt and fluctuating share price—down from **$24** to **$14**—analysts like Manav Gupta from UBS have recently upgraded their ratings on the stock, anticipating a price target of **$18** within the next twelve months.

Another noteworthy returnee is **Smithfield Foods (SFD)**, which was taken private in **2013** and made its comeback to public markets in January 2025 with a **13%** stake priced at **$20** per share. Analysts predict earnings per share of **$2.35** in **2025**, with a price-to-earnings ratio under **10**. Six out of seven analysts covering the stock have issued Buy ratings, suggesting a potential **25%** gain based on their average target price.

Investors keen on entering the IPO space should exercise caution and limit their exposure to amounts they can afford to lose. Diversifying through exchange-traded funds (ETFs) can mitigate risk, although volatility remains a possibility. The Renaissance IPO ETF, which refreshes its holdings quarterly, has shown a **14.5%** gain in **2025**, closely aligning with the **14.8%** rise of the S&P 500 and outpacing the **10.4%** return of the Russell 2000 index.

In comparison, the First Trust US Equity Opportunities ETF (FPX) has performed somewhat more steadily, achieving a **39.3%** increase in 2025, while maintaining a competitive expense ratio of **0.61%**. It aims to replicate the IPOX-100 U.S. index, capturing a significant portion of the market capitalization from IPOs over the past four years.

As the IPO landscape continues to evolve, investors should remain vigilant, informed, and prepared to navigate both opportunities and risks.