A Wait-and-See Environment Bodes Well for the US IPO Market

With companies looking for the right moment to go public, those with the cash to pick their opportunities will be most valuable in the near future.

EY has released its 2025 Q2 report on global IPO trends, and much like other markets, the IPO landscape has seen uncertainty and volatility caused by global macroeconomic concerns. How can you shape uncertainty into opportunity for your IPO? covers the varied results of the first half of 2025, noting “Momentum has become increasingly fragmented across regions, shaped by divergent economic cycles, uneven trade tariff effects, policy decisions and investor risk appetite.”

With tariffs, inflation, expected rate cuts, and other concerns, the US is not immune to volatility. But the sectors where the US is succeeding demonstrate the country’s strengths while we wait to see what the second half of 2025 brings.

Cross-border IPOs seek refuge in active US markets

According to EY, globally, “the second quarter saw just 241 IPOs, with US$31.5b in capital raised, which was the weakest second-quarter performance since 2020 by number.” IPO activity in Europe has largely paused since April as companies wait to see what happens with trade deals. As EY notes, “higher volatility typically signals increased investor uncertainty and risk aversion, creating headwinds for IPO candidates.” As a result, “many companies that had planned to go public in the first two quarters have paused or withdrawn their listings.”

A bright spot for the US has been cross-border IPOs, which accounted for 14% of total global deals in the first half of the year. 93% of global cross-border IPOs chose to list in the US, which EY attributes to the market’s “deep capital pools, broader investor base and strong liquidity.” US-China tensions could cause a shift toward Hong Kong as a destination, but as long as the US presents the strongest investor base, international companies should continue to favor it.

To see the value the US brings, it’s important to look not only at the number of deals, but share price beyond the first day of trading. The report shows share price performance since IPO in the US is nearly 40%. Continued post-IPO activity should make a strong case for the US as a destination.

The US tech sector has advantages in the short and long term

Though sector-specific numbers aren’t always telling (the number of IPOs in some sectors can be quite small, making percentages misleading), the sectors where the US led in EY’s report show commonalities. When compared to Greater China, there were three sectors in which the US led in both deal count and total proceeds: Technology, Financials, and “Others,” which includes a number of public sector and service-oriented categories.

“Geographically, the US accounted for just more than half of tech IPO proceeds,” notes the report. This is largely due to software companies, AI cloud infrastructure, and fintech, while “hardware listings remain concentrated in Greater China, reflecting the region’s strength in electronics and semiconductor manufacturing.”

China leads in tech hardware, industrials, energy and other tangible assets. The US leads in categories that demonstrate the strength of a knowledge-based economy, “a growing recognition that long-term value creation is increasingly driven by intangible assets and strategic vision.”

We don’t know yet whether the rapidly-changing landscape of global trade will re-shore manufacturing to the US, but the IPO market tells us there is an appetite for innovation that bodes well for the future. The tech sector is also poised to take advantage of periodic opportunities over the next 6-12 months as companies can rely on venture capital funding to wait for the right moment to go public, a major differentiator amid global uncertainty.

Cash on hand may be the key to finding the right moment for an IPO

Market uncertainty can cause hesitancy for both companies and investors. As EY explains, “heightened volatility is compelling companies to reimagine their exit strategies, stay private longer or pursue listings with smaller float sizes.” Postponing listings could be a viable strategy for companies that believe conditions will be more favorable in the future. But just as likely is a scenario where volatility continues, in which case choosing the right moment is critical.

This wait-and-see stance is only viable for companies that are financially capable of doing so. Those with Private Equity sponsors or VC capital can pick their spots more easily. Companies in software and service-based sectors are well-positioned because their lack of physical assets creates flexibility; as the US leads in these sectors, the outlook for the US IPO market could prove more favorable than for other regions.

We don’t know how long the uncertainty will last, but companies that aren’t forced to go public at the wrong time can reap the rewards. While activity may slow or speed up at different points over the next 6-12 months, the ability to weather unexpected changes will determine the IPO environment, and the US is succeeding in the sectors best poised to handle these changes.