US IPO Market Underperformed in Uneven 2025
Initial public offerings (IPOs) in the United States yielded lacklustre results in 2025, hampered by equity market volatility and heightened scrutiny surrounding sectors like crypto and artificial intelligence. Many of the year’s highly anticipated listings failed to meet expectations. Shares of companies that went public in 2025, excluding closed-end funds and blank-check vehicles, increased by a weighted average of 13.9 per cent, falling short of the S&P 500 Index’s 16 per cent gain.
PwC’s US IPO leader, Mike Bellin, noted the selective nature of the market reopening in 2025. He observed that investors favored quality over momentum, raising the requirements for companies, especially tech and consumer firms, to go public. Mid-sized offerings experienced weaker performance compared to larger transactions. US deals ranging from $US500 million to $US1 billion saw an increase of just 5.6 per cent, while deals exceeding $US1 billion jumped 20 per cent.
Notably, data centre campus developer Fermi capitalised on AI enthusiasm, raising $US785 million through its IPO despite lacking revenue or confirmed tenants. Fermi is a company that builds data centre campuses. Its shares, however, were already trading below the IPO price when the company announced on December 12 that its initial investment-grade tenant had terminated their agreement. The stock has since fallen 58 per cent from its IPO price.
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