Strong Expectations for IPOs in 2025 from Goldman Sachs

Goldman Sachs Expects a Recovery in IPO Volume

Strategists at Goldman Sachs, led by Ben Snider, have announced that they expect significant recovery in initial public offerings (IPOs) throughout the year. After a prolonged slowdown, 61 new IPOs are anticipated by 2025.

IPO Activity to Reach Record Levels

According to Goldman Sachs' analysis, IPO activity is expected to reach record levels in dollar terms. However, these transactions are expected to represent only 0.2% of the Russell 3000 market capitalization, which is below the 0.3% share observed in 2021.

Risks and Uncertainties

The strategists point out that factors such as market volatility and companies' cautious behaviors are significant risks. They specifically warned that the concentration of software companies among those expected to go public could negatively impact the outlook for IPOs in the event of potential market corrections.

Potential IPO Volume and Scenarios

Considering that various large private companies are preparing for IPOs, Goldman Sachs emphasized that potential outcomes could vary widely. If none of the IPOs take place, the total volume could drop to $80 billion; however, if all are successful, it could rise to $200 billion.

Stock Demand and Supply Dynamics

The strategists expect that companies' stock demand will outstrip supply. Additionally, gross buybacks are projected to exceed $1 trillion, and net demand, excluding mergers and acquisitions, is expected to reach around $700 billion.