IPO pops are nearing 10-year highs, and tech is leading the way

The recent flurry of initial public offerings (IPOs) in the tech sector has been nothing short of explosive, with companies like Figma and Circle Internet Group experiencing astronomical gains in their share prices on their first day of trading. Figma, a tech unicorn, saw its shares surge by 250% from its IPO price of $33 to close at $115.50, while Circle Internet Group witnessed a more than 165% increase from its IPO price of $31 to close at $83.23.

These IPO “pops” are not isolated incidents but rather a trend that is becoming more pronounced, especially in the tech industry. According to data from IPO advisory firm Rainmaker Securities, the average first-day performance of IPOs in the first half of 2025 was 27.5%, nearly double the 15% jump seen in the same period the previous year. The 20 largest offerings of 2025 have seen even larger gains, with first-day pops averaging 36%.

The tech sector has been leading the charge in these IPO gains, with the NYSE reporting the largest average first-day hike of 36.3% over the past year. This sector has also seen a high concentration of share prices opening above their expected range, indicating strong investor demand for tech offerings.

One of the reasons behind the tech sector’s dominance in IPO pops, according to Rainmaker Securities managing partner Greg Martin, is the difficulty in valuing companies that are rapidly growing in new markets. Tech companies often operate in innovative and evolving industries, making it challenging to accurately predict their future growth potential.

The trend of high IPO pops has extended to crypto-related fintech companies as well, with new issues like Bullish experiencing significant gains on their first day of trading. Bullish, a fintech crypto exchange, priced its IPO at $37 and closed its first session at $68, representing an 80% jump.

However, it’s essential to note that while these IPO pops may generate excitement in the short term, they do not always translate to long-term success. Research has shown that IPOs with high levels of hype tend to underperform those with lower levels of enthusiasm by more than 8% over the long run.

As for Figma, which initially opened at $85 but is now trading around $54, the stock price has seen a correction from its first-day highs. This volatility in stock prices raises questions about the sustainability of these gains and the impact of hype on IPO performance.

In conclusion, the current IPO season shows no signs of slowing down, with tech offerings continuing to attract significant investor interest. Whether these gains are a result of economic inefficiencies, inexperienced traders getting caught up in the hype, or a combination of both remains to be seen. Ultimately, only time will tell how these high-flying IPOs fare in the long run. The IPO market for US companies with a market cap of at least $50 million has seen a significant increase of 53.1% compared to the same time last year, according to IPO research firm Renaissance Capital. This surge in IPO activity is a promising sign for the market, indicating a renewed interest in going public among companies of varying sizes and industries.

Deal making in general is also on the rise, with markets starting to open back up after a period of uncertainty and volatility. This increase in deal activity is a positive indicator of economic growth and investor confidence, as companies look to expand and capitalize on new opportunities.

“We’re definitely in a historically higher ground than normal at this point,” noted Martin, an industry expert. This sentiment reflects the overall optimism and momentum in the IPO and deal making landscape, pointing towards a positive outlook for the market moving forward.

As the market continues to evolve and adapt to changing conditions, it is essential for investors to stay informed and up to date on the latest trends and developments. Platforms like StockStory aim to help individual investors navigate the market and make informed decisions to beat the market.

For breaking news and updates on US equities and the latest technology news impacting the stock market, follow Jake Conley, a breaking news reporter covering US equities for Yahoo Finance, on X at @byjakeconley or reach out via email at jake.conle@yahooinc.com.

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