Elon Musk‘s SpaceX is gearing up for a highly anticipated stock market debut, which experts believe could serve as a significant catalyst to rekindle interest among companies looking to list their shares. This comes after a noticeable decline in initial public offerings, or IPOs, over recent years.
The IPO process — where private companies first offer their stock to the public to raise necessary funds — has experienced a steep decline in activity over the last five years.
Earlier this month, SpaceX, recognized for its rocket launch services, Starlink’s satellite-based internet, and its innovative large language models following a merger with xAI in February, has confidentially filed for an IPO with the U.S. Securities and Exchange Commission.
SpaceX aims for a staggering valuation of approximately $2 trillion, positioning it as the sixth-largest publicly traded company, following the renowned Magnificent Seven members: Nvidia, Apple, Alphabet, Microsoft, and Amazon. If successful, this IPO could motivate other privately held companies to pursue their own public offerings.
Delayed Timelines for IPOs Following the Record Year of 2021
In 2021, a remarkable total of 1,035 companies made their public offerings. Despite the challenges posed by pandemic-related disruptions to supply chains that fueled rising inflation, the Federal Reserve kept interest rates low, finishing the year with an effective federal funds rate of just 0.08%. These low rates encouraged companies to capitalize on cheaper capital, resulting in inflated valuations for their public debuts.
This environment led to a surge of well-known firms going public that year, including Coinbase, Rivian, Robinhood, and SoFi.
However, as a reaction to soaring inflation, the Fed increased rates 11 times from 2022 to 2023, maintaining those rates since then. This marked the fastest sequence of interest rate hikes since the 1980s. Coupled with a significant influx of funding from private sources, this discouraged companies from pursuing public offerings, nearly drying up the IPO market.
The number of IPOs dropped by almost 83% in 2022, with only 181 companies going public, and a mere 154 companies followed suit in 2023.
Nevertheless, following this downturn, prediction markets like Kalshi are beginning to show that expectations for popular companies to make their public debuts in 2026 are increasing.
Could SpaceX’s Success Spark a Wave of New IPOs?
By the end of the first quarter of 2026, 104 companies had already gone public, indicating that this year is set to witness the highest number of IPOs since the record-breaking highs of 2021.
If SpaceX successfully raises between $50 billion and $75 billion in its public offering, it could provide a significant green light for other private AI companies that are already household names, such as Anthropic and OpenAI, which are rumored to be considering their own IPOs this year.
“In light of the major pullback in 2022 and 2023, I believe that [a successful IPO for SpaceX] could definitely pave the way,” states Jennifer Horton, executive vice president at CapWealth.
Another influencing factor is the immense popularity of Musk. While institutional investors primarily focus on the financial health of companies, retail investors often gauge their decisions based on sentiment. As the CEO of Tesla, SpaceX, and Neuralink, along with being recognized as the world’s richest individual, Musk holds substantial media attention, capital, and influence.
“For retail investors, I think [the IPO] will provide valuable insights into investor appetite,” says Horton. “Is their interest driven by their faith in Musk or by the company’s actual financial performance?”
SpaceX reportedly plans to reserve up to 30% of its IPO shares for retail investors. A strong interest from this group could significantly impact the decisions of other companies considering public listings this year.
Expanding Investment Opportunities Beyond AI
The resurgence of IPOs is not limited to AI companies. For instance, X-energy, supported by Amazon and focused on developing next-generation nuclear reactors and proprietary nuclear fuel, made its debut on the Nasdaq on April 24, achieving a remarkable 27% gain within its first two days of trading.
According to Kalshi, the sandwich chain Jersey Mike’s holds a 92% chance of going public this year, while the odds of an IPO for the cryptocurrency exchange Kraken stand at 62%. Hawkeye 360, a defense technology firm, could potentially go public as soon as early May, and a listing from beverage maker Liquid Death is also rumored for 2026.
“While Anthropic and OpenAI are the primary focus, these mega-cap tech IPOs are certainly eye-catching,” Horton comments. “However, I believe this could create momentum in other sectors as well.”
She also mentions the potential for IPOs from Fannie Mae and Freddie Mac after years of government conservatorship. Public listings from these government-sponsored secondary mortgage market providers could greatly benefit financial stocks, which have struggled among the S&P 500‘s 11 sectors this year.
Nevertheless, Horton warns that the same challenges that led to the slowdown after 2021 could return. “If interest rates remain elevated for an extended period, that could compress valuations,” she cautions. “Less available capital might lead to [companies] delays.”
While the Fed is projected to maintain its benchmark rate in April, inflation has risen from 2.4% in March 2025 to 3.3% in March 2026. The ongoing conflict in Iran has led to increased prices for essential goods such as gasoline, plastics, airfare, and food. If consumer costs continue to spiral, the central bank may have to consider further rate hikes, which could deter other companies from emulating SpaceX’s path.
What Key Considerations Should Investors Keep in Mind Regarding Upcoming IPOs?
With numerous significant IPOs anticipated in 2026, investors contemplating purchasing shares at these companies’ debuts should be acutely aware of the associated risks.
“Historically, the stock performance in the first year following an IPO has varied significantly, with a considerable minority delivering exceptional returns while a slight majority has posted negative returns,” remarks Thomas Shipp, head of equity research at LPL Financial, in a post dated April 23.
One reason, according to Shipp, is that individual investors rarely have access to the initial offer prices. “Investment banks typically allocate a significant portion of the shares they underwrite to large institutional investors,” he notes. Furthermore, “taking a private company public creates a liquidity event for existing shareholders. Insider ownership stakes may be sold, increasing expected selling pressure after the IPO.”
These risks shouldn’t lead investors to completely avoid IPOs. Instead, they should proceed with caution. Citing three decades of IPO data, Shipp emphasizes that outcomes can vary widely, ranging from incredible success stories to complete failures.
“We advise investors to approach any IPO investment with care and anticipate considerable volatility,” he concludes.
Despite the unpredictability, Horton expects some retail investors to act impulsively regarding SpaceX’s IPO. “There are many fans of Elon Musk,” she states. “I believe many will disregard caution simply to see how it all unfolds.”
Henry Caldwell is an insightful author and contributor to the Oxford Wise Finance blog, where he shares his expertise on a wide array of general topics, with a particular focus on finance. With a background in economics and a passion for making complex concepts accessible, he engages readers with practical advice and thought-provoking analysis. Henry’s writing empowers individuals to navigate the financial landscape with confidence, making informed decisions that enhance their financial literacy and overall well-being.
