Nobody wanted to hear about IPOs in 2022 or 2023. The window slammed shut when rates spiked from zero to 5.25%, and companies that dreamed of billion-dollar valuations suddenly faced down rounds and empty order books.

But while the public markets froze, private companies kept building. They cut costs, improved unit economics, and got profitable (some of them at least). Now, three years later, that discipline is about to pay off. The IPO market is roaring back in 2026, and it's bringing some of the biggest names in tech with it.

To understand why IPOs are returning now, you need to understand why they disappeared in the first place.

The 2021 IPO boom wasn't built on fundamentals or discretion, it was built on free money. With the Fed funds rate at zero and investors desperate for yield, anything with a growth story could go public. Profitability was totally optional. A clear path to cash flow? Who even cares. The market rewarded revenue growth at any cost.

Then the Fed started hiking rates in March 2022. By July 2023, rates hit 5.25%, the highest level in 22 years. Suddenly, the math completely changed. Future cash flows got discounted at much higher rates, making unprofitable growth companies significantly less valuable. The Nasdaq fell 33% in 2022. The IPO window nailed itself shut and put a "DO NOT DISTURB" sign on the door.

Only 28 companies went public in 2022, raising just $7.1 billion. That was the lowest activity since 2009. Compare that to 2021, when 397 companies raised $142 billion. The market basically stopped working.

But the picture started to change in 2025.

The Fed cut rates three times in the second half of 2025, bringing the fed funds rate down to 4.25-4.50% as of January 2026. And most importantly, investors started believing that rates had peaked and a "higher for longer" scenario wasn't going to last forever (although that remains to be seen).

Jon Gray, President of Blackstone, told the WSJ Invest conference in early February 2026 that he expects 2026 to be "a breakout year for public listings," pointing to a "friendlier regulatory backdrop, easing interest-rate pressure, and a growing backlog of high-profile private companies preparing to tap public markets."

The technical setup matters here too. PwC reported that 72 traditional IPOs raised $33.6 billion through November 2025 which is more than the full-year totals of 2024, 2023, and 2022 combined. September 2025 became the busiest month for new listings in years, with 13 IPOs raising over $8 billion. That momentum carried into Q4 despite a government shutdown that temporarily halted SEC operations.

As I mentioned, while public markets were closed, private markets stayed wide open. Late-stage funding rounds kept happening and companies kept growing. And now there are more than 800 unicorns (private companies valued over $1 billion) globally, according to PwC's 2026 capital markets outlook.

These aren't speculative startups anymore. These are growing into established businesses with billions in revenue, thousands of employees, and MOST CRUCIALLY - real paths to profitability. Databricks hit a $4.8 billion revenue run rate in Q3 2025, growing 55% year-over-year, and is cash flow positive. Canva reports $3.3 billion in annual revenue and has been profitable for seven consecutive years.

The numbers are staggering when you look at the biggest names alleged to be moving forward with an IPO in the coming years. In fact, a couple of these will be among the largest IPOs in the history of markets.

SpaceX, valued at $350 billion in private markets as of December 2025, is reportedly targeting a $1.5 trillion valuation for its IPO. That would make it the largest VC-backed listing of all time by a factor of 10x. The company told employees in December it's preparing for a public offering aimed at funding "an insane flight rate" for its Starship rocket, AI data centers in space, and a moon base.

OpenAI is laying groundwork for what could become one of the largest IPOs in market history, with early estimates suggesting a valuation between $830 billion and $1 trillion. CFO Sarah Friar has pointed to 2027 as a likely timeline, but some advisers believe late 2026 is possible if market conditions hold. CEO Sam Altman has publicly stated he's "0% excited" about becoming CEO of a public company, but when you need tens of billions in capital to scale compute infrastructure, you simply have to play ball.

Anthropic (maker of Claude AI) is reportedly exploring an IPO after hitting a $350 billion valuation in November 2025 funding. Databricks raised $4 billion at a $134 billion valuation in December. Kraken confidentially filed for an IPO in late 2025, targeting Q1 2026 at around a $20 billion valuation.

These are companies actively hiring banks, filing paperwork, and preparing S-1s and they will go public - it is just a matter of when.

First, interest rates are finally cooperating.

The Fed cut rates from 5.25-5.50% down to 4.25-4.50% in the second half of 2025, and markets expect at least two more cuts in 2026. Lower rates make future cash flows more valuable today, which directly boosts tech valuations. It also makes bonds less attractive, pushing investors back into equities.

Karim Anani, EY's Global IPO Leader, explained it well saying "Activity in 2025 demonstrated a return of confidence in global IPO markets, marked by a selective and fast-moving environment. As we approach 2026, the foundations for a broader reopening are strengthening."

Second, sponsor-backed companies need exits.

Private equity and venture capital firms are sitting on older vintage portfolio companies that have been waiting years to exit. Many PE funds raised capital in 2018-2020 with the expectation of returning money to limited partners by 2025-2026. That timeline is here. If IPOs don't happen soon, these firms face pressure from LPs who've been stuck in illiquid positions for too long. Many of these such funds and firms would have been willing to exit a few years ago if the economics hadn’t deteriorated.

Third, public market valuations caught up to private ones.

For several years, private market valuations were higher than public comps, creating a disincentive to go public. Why would you ever accept a down round on Nasdaq when you can raise at a premium in private markets?

But that gap has closed. The S&P 500 hit 36 all-time highs in 2025 despite trade concerns and a government shutdown. Tech multiples expanded. Now public markets can actually compete with late-stage private valuations - and obviously they offer something private markets can't: that’s liquidity.

The pipeline for 2026 is genuinely impressive and the market will be paying close attention. Here are the names generating the most buzz:

SpaceX – You’ve probably heard of them. Elon Musk's space company is targeting H2 2026 at a potential $1.5 trillion valuation. The company entered a "quiet period" in late 2025 (an SEC-mandated communications blackout before IPOs), suggesting this is real and happening sooner rather than later.

OpenAI – Probably late 2026 or early 2027. The company needs massive capital to scale compute infrastructure. Estimates suggest a $60-80 billion raise at an $830 billion to $1 trillion valuation.

Anthropic – Possibly 2026, though no formal timeline set. The company engaged Wilson Sonsini (top Silicon Valley law firm) to explore an IPO. At $350 billion valuation, this would be significant.

Databricks – Very likely early 2026. The company is cash flow positive, growing 55% YoY, and just raised at $134 billion. Crunchbase labels it "very likely" to IPO.

Kraken – Confidentially filed for Q1 2026. The crypto exchange is positioning itself alongside Coinbase and other public crypto platforms. Valuation target around $20 billion.

Canva – Probable for 2026. The design platform hit $3.3 billion in annual revenue and has been profitable for seven years. Valued at $42 billion in private markets.

Discord – Gaming-focused communication platform rejected a $10 billion Microsoft acquisition in 2021. Now considering public markets at potentially $20-30 billion valuation.

The sectors dominating this pipeline? The same ones we have been covering and will continue to focus on in our posts:

According to PwC, AI infrastructure is seeing the strongest investor demand, followed by insurance, specialty risk, and industrials benefiting from reshoring trends.

Don't confuse an "open IPO window" with "everything will work." The 2026 market is open but selective. Investors aren't buying stories anymore; they're buying cash flow, profitability, and discipline. They have to in these conditions vs 2021 wild optimism.

Mike Bellin, IPO Services Leader at PwC, summarized it perfectly by saying "A shutdown-driven backlog and easing rates are bringing supply, yet investors are paying a premium for scaled, cash-generative stories with clear profitability paths, especially in AI infrastructure, software, and specialty risk."

If you're not profitable (or damn close), if your unit economics are unclear, or if your growth story relies on "eventually we'll figure out monetization," you're staying private or you should. The market's tolerance for speculative bets hasn't returned to 2021 levels and likely will not for some time due to the rate environment and economic conditions we find ourselves in.

Look at what happened in 2025. CoreWeave (AI data center) went public and gained 60% from its listing price. It had a clear, profitable business model, while Figma (design platform) initially popped 255% on day one, then fell 50% below IPO price as investors questioned whether the growth justified the valuation. The market is going to be rewarding execution, not hype.

If you're managing your own portfolio, here's what to be aware of as the window opens and this accelerates.

Be patient on early allocations.

Most retail investors can't access IPOs at the offering price and you're buying after the first day pop. This is the case even if you are trading on a platform like Robinhood, SOFI, or even Fidelity. That often means overpaying. The temptation is real and I understand the draw, but if you truly want exposure to SpaceX or OpenAI, wait 3-6 months post-IPO for the lockup period to expire and initial volatility to settle.

Focus on fundamentals over narrative. The companies that will succeed in this IPO cycle are ones with actual revenue, margins, and paths to cash generation. AI is exciting, but "AI-powered" doesn't justify infinite valuations.

Diversify your bets. IPOs are inherently risky. Even great companies can have terrible first-year performance (ask anyone who bought Uber or Lyft at IPO and they’ll tell you). If you're allocating to this space, keep it to 5% of your portfolio maximum. Don’t try to be a hero in pre-game warmups.

The broader takeaway? The reopening of the IPO market matters even if you never buy a newly public company. It signals that capital formation is working again, that innovation is being funded, and that public markets can compete with private ones. A healthy IPO pipeline supports the entire venture ecosystem because it allows early investors to exit, recycle capital into new companies, and keeps the innovation flywheel turning.

2026 probably won’t replicate the insanity of 2021. But if rates stay stable, AI infrastructure demand holds up, and companies deliver on their promises? We could see some of the most significant public market debuts in history. And for self-directed investors, that creates opportunities if you approach them with discipline and realistic expectations.

The Earnout Investor provides analysis and research but DOES NOT provide individual financial advice. Jamie Dejter may have a position in some of the stocks mentioned. All content is for informational purposes only. The Earnout Investor is not a registered investment, legal, or tax advisor, or a broker/dealer. Trading any asset involves risk and could result in significant capital losses. Please, do your own research before acquiring stocks.