Goldman Sachs expects US IPO proceeds to reach as much as $160 billion in 2026, while the secondary-market impact of mega IPOs may be limited

Overview

In this edition of US Weekly Startup, Goldman Sachs focuses on investor questions arising from potential mega IPOs, discussing the 2026 US IPO outlook, recent IPO performance, characteristics of high-quality IPOs, trading patterns around lockup expirations, mutual fund cash management, the market impact of historical mega IPOs, and potential rebalancing pressure from index rule changes. Overall, the report argues that the US IPO window has not closed, the macro backdrop remains broadly supportive, and if several large private companies go public, full-year proceeds could reach historical highs; however, investors need to distinguish between first-day issuance enthusiasm and the ability to deliver on fundamentals thereafter.

Core views

First, US IPO activity has recovered from the trough, with both issuance volume and proceeds in 2026 so far well above the same period last year, though volatility and geopolitical uncertainty have led the IPO count forecast to be cut from 120 to about 100 deals. Second, recent IPO first-day performance remains strong, with an average first-day gain of about 19%, but returns over the following weeks to months are below historical averages, suggesting the market is placing greater weight on growth quality, the path to profitability, and valuation discipline. Third, the best-performing recent IPOs typically feature high revenue growth and a path to profitability within 24 months, and those issued at lower price-to-sales multiples have also performed better afterward. Fourth, lockup expirations usually create short-term pressure, and in recent years IPOs have fallen more before expiration, but on average recovered more strongly within three months after expiration. Fifth, mutual funds have historically raised cash ahead of mega IPOs, but mega IPOs have not meaningfully pressured the S&P 500, the largest constituents, or the Momentum factor. Sixth, even if mega IPOs are quickly added to major indices, their initial weights are small, so passive and active selling pressure on existing constituents is expected to be lower than market concerns imply.

Analysis framework

The report combines a top-down assessment of the macro issuance environment with a bottom-up analysis of IPO sample performance. At the macro level, it uses the GS IPO Barometer to track variables such as interest rates, valuations, and CEO confidence; at the market-impact level, it looks back at mega IPO cases such as Visa, General Motors, Alibaba, and Meta Platforms; at the security-performance level, it compares return differences for IPOs since 2023 versus 2013-2022 IPOs over one week, one month, three months, and six months after the first day of trading, and uses revenue growth, profitability timelines, and price-to-sales ratios to explain the divergence.

Methodology notes

• Issuance environment indicatorGS IPO Barometer

  Macro barometer for the IPO environment

  This indicator is used to measure whether the macro backdrop is favorable for IPO activity. The report replaces the CEO confidence input from the quarterly Conference Board survey with the monthly Chief Executive Magazine survey to support weekly updates; other inputs such as interest rates and equity valuations remain unchanged.

• Historical event studyMega IPO event study

  Comparison of market performance before and after mega IPOs

  Using the largest US exchange-listed IPOs over the past 30 years as the sample, the report examines mutual fund cash, the S&P 500, the largest constituents, high-yield credit, and the Momentum factor before and after IPOs to determine whether market impact stems from IPO supply pressure.

• Fundamental groupingIPO quality screen

  Grouping by growth, path to profitability, and valuation

  The report evaluates 12-month post-IPO performance by grouping companies by sales growth, first profitable year, and price-to-sales ratio. It concludes that high-growth companies with near-term profitability perform better, while high-valuation issuers deliver weaker subsequent returns.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• US IPO market

  Core research subject

  Strengths

  The issuance window is recovering, 2026 proceeds are expected to rise significantly, and the GS IPO Barometer shows the macro backdrop remains broadly supportive.

  Weaknesses

  Recent IPOs have shown weak post-day-one performance, and the market is more cautious toward companies with high valuations and no clear path to profitability.

  Comparison

  So far in 2026, IPO count and proceeds are up about 80% from the same period last year, but the expected number of deals is below the previous forecast.

  Risks

  Market volatility, geopolitical uncertainty, a high concentration of software companies in the listing pipeline, and uncertainty over the timing of mega IPOs.

• GS Liquid IPO Index (GSX1LIPO)

  Proxy for recent IPO secondary-market performance

  Strengths

  Reflects the performance of more liquid recent US IPOs and direct listings.

  Weaknesses

  Year-to-date return is -1%, lagging the Russell 2000’s +12%.

  Comparison

  Recent IPO baskets have underperformed relative to the small-cap index.

  Risks

  Insufficient growth delivery by constituents, valuation compression, and lockup expiration pressure.

• S&P 500

  Benchmark for assessing the market impact of mega IPOs

  Strengths

  Historically, it has risen an average of 5% in the month after mega IPOs, showing no clear evidence of systematic pressure caused by IPO supply.

  Weaknesses

  It fell an average of 1% in the month before IPOs, though the report believes this more likely reflects the macro backdrop.

  Comparison

  High-yield credit performed similarly to equities during these periods, supporting a macro-driven explanation.

  Risks

  If macro risks coincide with large offerings, short-term sentiment and flows could amplify volatility.

• Nasdaq-100

  Asset related to index rule changes

  Strengths

  Rule changes could allow some large companies to enter the index more quickly, improving investability and tracking demand for newly listed companies.

  Weaknesses

  Initial weights for low-free-float companies are constrained, and the benchmark AUM of active mutual funds is relatively limited.

  Comparison

  Assuming a company with a $1 trillion market cap and 10% free float, its initial weight in the Nasdaq-100 would be below 2%, but could rise to 2%-3% once free float reaches 90%.

  Risks

  Changes in index provider rules, public consultation outcomes, and the pace of free-float expansion remain uncertain.

• V, GM, BABA, META

  Historical mega IPO cases

  Strengths

  Used to observe the historical impact of mega IPOs on mutual fund cash, indices, and large-cap leaders.

  Weaknesses

  The sample size is limited, and some cases occurred in special macro environments.

  Comparison

  These IPOs raised amounts equivalent to about 15 bps of the S&P 500’s total market cap at the time.

  Risks

  Future potential mega IPOs may differ from historical cases in scale, valuation, free-float ratio, and industry characteristics.

Key data

• US IPO count so far in 202625 dealsCounts US IPOs larger than $25 million.
• US IPO proceeds so far in 2026$14 billionBoth count and proceeds are up about 80% versus the same period last year.
• Goldman Sachs 2026 IPO forecastAbout 100 deals and $160 billion of proceedsThe issuance count forecast was reduced from the previous 120 deals, but the proceeds forecast remains at $160 billion.
• GS IPO Barometer136Still points to a macro environment favorable for IPOs.
• Average first-day gain for 2026 IPOs19%Roughly in line with the 30-year historical median.
• Average first-day gain for IPOs in the first three weeks of Q2 202627%Stronger than the average 16% first-day gain for Q1 IPOs.
• GS Liquid IPO Index year-to-date return-1%The Russell 2000 returned +12% over the same period.
• Recent low-valuation IPO performanceAverage 12-month return of 11% for IPOs with price-to-sales below 2xThe average 12-month return for IPOs with price-to-sales above 5x was -5%.
• Mutual fund cash ratio1.4%As of February 2026, cash as a share of assets in US equity mutual funds was at the 5th percentile of the past 20 years; the cash balance was $181 billion.
• Assumed index inclusion impact of a mega IPOSelling pressure of about 5 bps of existing constituent market cap and less than 10% of average daily trading volumeAssumes a company with $1 trillion in total market cap and 10% free float enters the S&P 500 and is allocated at benchmark weight.

Impact & implications

For investors, potential mega IPOs are more likely to change new-share supply, capital attention, and the pace of index rebalancing than to directly trigger systemic selling pressure in the US large-cap market. Strategically, the focus should be on IPO quality rather than simple issuance excitement: revenue growth, the path to profitability, and valuation discipline are the key drivers of subsequent returns. For indices and active funds, near-term rebalancing pressure appears manageable, but if a large company’s free float rises meaningfully over time, its index weight could expand from below 0.5% or below 2% to 2%-3%, at which point the rebalancing impact would need to be reassessed.

Risks

• Geopolitical uncertainty and recent equity-market volatility could cause the IPO window to tighten again.
• Software companies account for about 20% of the IPO backlog since 2025; if risk appetite for the sector is insufficient, issuance activity could be dragged down.
• Recent IPO post-day-one performance is weaker than historical averages, which could undermine investor demand for subsequent new listings.
• Supply expectations ahead of lockup expirations may continue to weigh on the share prices of some newly listed companies.
• Index rule changes remain uncertain, particularly regarding the timing and scope of potential adjustments by S&P Dow Jones Indices and FTSE Russell.
• Uncertainty around the actual deal size, free-float ratio, and listing timing of mega IPOs creates two-way risk to the full-year IPO proceeds forecast.

What to watch

• Weekly changes in the GS IPO Barometer, especially inputs for interest rates, valuations, and CEO confidence.
• The listing timetables, deal sizes, and free-float ratios of large private companies that may come public later in 2026.
• Whether recent IPO returns one week, one month, three months, and six months after listing continue to lag historical averages.
• The combined quality of newly listed companies in terms of revenue growth, profitability timeline, and issuance valuation.
• Price performance and trading-volume changes before and after lockup expirations.
• Whether cash positions in US equity mutual funds continue to rise ahead of mega IPOs.
• Changes in rules or inclusion processes related to the Nasdaq-100, Russell 1000 Growth, and S&P 500.