TOP of MIND: IPO SURGE: A RED FLAG FOR MARKETS?

Research evidence excerpt

TOP of MIND: IPO SURGE: A RED FLAG FOR MARKETS?

July 22, 2026 | 4:05 PM EDT

Issue

TOPof MIND

IPO SURGE: A RED FLAG FOR MARKETS?

The US IPO market has reopened in a big way in 2026, with issuance already at a

record high. But this activity has raised two key concerns for the equity market:

whether it’s flashing a late-cycle warning sign and whether the market can

comfortably digest so much new supply. So, how worried should investors be? The

IPO Initiative’s Jay Ritter, Acadian’s Owen Lamont, and GS’ Ben Snider agree that

we’re not in an “IPO wave” (yet) but differ on how much of a red flag the surge in

issuance is signaling. Snider argues that the late-cycle warning signs of past IPO

booms aren’t evident today and digestion concerns are overdone. Ritter notes that

while high new issuance volume has historically predicted lower future returns, the

signal has been weak. But Lamont is more cautious, calling an IPO wave one of the

“four horsemen” of a bubble (especially alongside a surge in debt issuance), but

stresses that IPO waves don’t necessarily signal the market top. Key to watch: first

day IPO returns and the all-important AI outlook.

INTERVIEWS with…

Ben Snider, Chief US Equity Strategist, Goldman Sachs

“I’m less worried [about the surge in new issuance] than the average investor… the late-cycle warning signs that have

historically accompanied IPO booms aren’t evident today… [and] the equity supply-demand balance this year looks better

than most investors intuit.”

Jay Ritter, Director of The IPO Initiative and Professor Emeritus, The University of Florida’s Warrington College

of Business

“High new issue volume is a predictor of low future market returns. But, like most indicators, this signal works only slightly