Author: Xiaojing , Tencent Technology

Edited by: Xu Qingyang

In 2025, the capital market witnessed an unprecedented "technology boom and bust show".

On one hand, newly listed tech darlings saw their stock prices plummet like kites with broken strings. Once-hot star companies saw their market value evaporate by billions of dollars within months, with some experiencing dramatic drops exceeding 50%. The chill in the market spread rapidly, causing a large number of companies planning IPOs to hesitate and repeatedly postpone their plans.

On the other hand, capital's "desire" is burning brightly.

A brand new "trillion-dollar club" is gathering outside the capital markets. From SpaceX, the aerospace empire led by Elon Musk, to OpenAI under Sam Altman, and giants like Anthropic poised for launch, they are preparing for unprecedented mega-IPOs in the history of technology, with valuations often reaching hundreds of billions or even trillions of dollars.

Cold and heat, destruction and revelry, retreat and advance.

Is this trial by fire the beginning of a market returning to rationality, or the prelude to extreme divergence in capital? The clock has struck midnight on 2026. Will the logic behind this "ice and fire" continue, and has the future flow of capital changed?

01. A Review of Tech IPOs in 2025: The Chill of IPO Failures and Stock Price Crashes

In 2025, despite signs of recovery in the number of tech company IPOs (around 23, a significant increase from 2024), the overall performance was dismal: more than two-thirds of the companies' stock prices had fallen below their IPO price, with a median decline of 9%, significantly underperforming the S&P 500 index, which rose nearly 18% during the same period.

However, after a brief period of euphoria, tech stocks have returned to the cold reality.

Among numerous star startups, Circle (a stablecoin issuer) has become one of the very few survivors: benefiting from favorable policies, its stock price surged on its first day of listing, and although it has since fallen back, it is still holding steady on its gains, making it the only winner that has managed to stand firm.
In contrast, other unicorns have performed less well. Figma generated considerable buzz in its early IPO, but its stock price has plummeted from its peak due to intensified competition in AI and slowing growth. Companies like Klarna (installment payment), StubHub (ticketing platform), and Navan (business travel software) have collectively lost billions of dollars in market value after their IPOs, revealing the secondary market's aversion to the "loss-for-growth" model.
The worst performer was cryptocurrency exchange Gemini . Hit by both financial losses and regulatory pressure, its stock price has been halved from its IPO price, plummeting by 58%.

Chart: Stock performance of technology companies that went public in 2025

On the other hand, funds are betting on "scarcity" with unprecedented patience. Although small and mid-cap tech stocks are struggling due to insufficient liquidity and prolonged trust cycles, the entry of super giants such as SpaceX, OpenAI, and Anthropic is expected to reignite market enthusiasm on its own.

This extreme polarization indicates a shift in the aesthetics of the secondary market: investors are no longer buying into "growth stories," but are instead squeezing into a very small number of "must-have" top sectors at any cost.

In contrast, small and medium-sized listed technology companies with an average market capitalization of approximately $8.3 billion face challenges such as higher valuation thresholds, insufficient liquidity, and longer trust-building cycles, making it difficult to attract sustained attention from index funds and retail investors.

This situation reflects a severe "trust gap." On the one hand, company founders and venture capital firms are unwilling to lower their valuations for IPOs; on the other hand, public investors, under the shadow of the AI bubble, have become extremely sensitive to the company's profit prospects and internal cash-outs. Coupled with banks blaming pricing difficulties caused by environmental volatility, the multi-party game has reached a stalemate, ultimately leading to an awkward situation where no one benefits.

This chill is rapidly spreading to companies planning to go public in 2026. Companies such as corporate travel software Perk (formerly TravelPerk) have already postponed their IPO plans to 2027. If market sentiment does not improve significantly in 2026, there may be a large number of potential IPO companies "waiting in line but not daring to ring the bell".

From a historical perspective, the recovery in 2025 is still far from reaching prosperity levels. Data from Accel Analysis and Qatalyst shows that the number of IPOs in the software and AI sector peaked in 2019-2021, with 13, 19, and 46 respectively. This was followed by a collapse in 2022-2023, with zero and one IPOs respectively, before entering a recovery phase in 2024-2025 (4 and 8 IPOs).

Chart: Number of IPOs in the Software and AI Sector Each Year from 2010 to 2025

However, the number of IPOs in the software and AI sector in 2025 will only be about half of the peak in 2021, lower than the "normal" benchmark of 9-10 IPOs per year from 2010 to 2018. This indicates that the technology IPO market is still a long way from truly returning to normal.

Chart: Returns of 8 Software and AI IPOs in 2025

Analysis of Failure Cases: The Clash Between Overvaluation and Market Reality

Navan's experience is quite typical.

This travel management platform went public in October 2025, and its valuation trajectory resembled a parabola: from a peak of $9.2 billion during its Series G funding round in 2022, it shrank to $6.2 billion ($25 per share) at the time of its IPO pricing; on the first day of trading, it closed below the IPO price again, with the share price falling to $20 and its market capitalization remaining at only $4.7 billion.

Ironically, Navan is not a shell company. It boasts $613 million in annual recurring revenue (a 32% increase) and over 10,000 enterprise clients, demonstrating a solid business scale and genuine revenue generation capabilities. However, market pricing logic has drastically changed: the same company could easily achieve a price-to-sales ratio (P/S) of 15-25 in 2021, but in the 2025 environment, even a valuation of only 10 times would still be considered "too expensive" by the market.

The core issue behind this lukewarm reception lies in the failure of the "Rule of 40". Although Navan achieved 30% revenue growth, this was offset by a net profit margin of approximately -30%, resulting in a score of virtually zero. According to this golden rule for measuring the health of software companies, only when the sum of growth rate and profit margin is ≥ 40% is it considered to have achieved a balance between "expansion" and "efficiency".

Chart: Post-IPO stock performance of Figma and Naavan

Figma's experience is a microcosm of the dramatic fluctuations in tech stocks. Despite a 2.5-fold surge after its July IPO, its share price plummeted 60% from its peak after releasing earnings guidance indicating slower growth. This volatility stemmed primarily from two factors: first, structural imbalances—the initial 8% float created artificial scarcity, while the release of a large number of restricted shares in September triggered a sell-off; second, valuation overload—its price-to-sales ratio of 31 was more than four times that of Adobe, making its premium seem insignificant in the face of slowing growth.

The chill in the market is spreading across the board. From ticketing platform StubHub (down 42%) to commercial aerospace company Firefly (down 36%), from transportation software Via (down 28%) to fintech company Klarna (down 22%), companies with "high valuations and low profits" are collectively facing a brutal market correction.

The Dilemma of Investment Banks: Goldman Sachs and Morgan Stanley Lose Their Glamour, Who Will Pay for the Overvaluation Bubble?

The poor performance of IPOs in 2025 is also an awkward situation for Goldman Sachs and Morgan Stanley, the investment banks that dominate the listing of the vast majority of technology stocks.

Goldman Sachs-led IPOs (such as Via and Firefly) saw a median decline of approximately 28%, underperforming the overall market. Morgan Stanley, which handled deals like Figma and CoreWeave, saw its underwritten IPOs decline by about 4%, better than the overall median, but each company has already fallen significantly from its peak.

Chart: Performance of IPO projects led by Goldman Sachs and Morgan Stanley

Analysts point out that part of the poor performance is due to factors beyond the banks' control. Public investors believe that many companies now attempting to go public are not particularly outstanding, while some of the strongest companies remain private.

Samantha Liu, chief investment officer for small and mid-cap growth stocks at AllianceBernstein, noted that she had tried to tell bankers running IPOs for companies like Navan to keep prices reasonable, especially if they didn't expect a lot of retail interest. "People's expectations were completely out of control," she said.

02 The Rise of Giants: The Frenzy of Record-Breaking IPO Preparations for SpaceX and OpenAI

While many tech upstarts are experiencing a "winter" in the public market, a completely different wave of enthusiasm is rising from the other side of the market. In stark contrast to those companies whose IPOs immediately plummeted, there are a few super tech giants that have established absolute advantages and are considered "must-haves".

SpaceX: Aiming for the largest IPO in history

According to sources familiar with the matter, SpaceX is actively pursuing its IPO plans, aiming to raise over $30 billion and reach a valuation of $1.5 trillion. This figure is approaching the record set by Saudi Aramco in 2019.

In terms of scale, if SpaceX sells 5% of its shares at a valuation of $1.5 trillion, the $40 billion offering would break Saudi Aramco's record of $29 billion, becoming the world's largest IPO ever.

Unlike Saudi Aramco's extremely low circulating share, SpaceX's successful offering of this scale would completely reshape the global landscape of hard technology investment. Management currently favors a listing in mid-to-late 2026, but this could be postponed to 2027 depending on market fluctuations.

SpaceX's confidence in accelerating its IPO stems from its explosive business growth: Starlink has become a core revenue pillar, and the "Direct Connect" service has greatly expanded market boundaries; at the same time, Starship's progress in lunar and Martian exploration has provided enormous potential.

Financial data shows that the company's revenue is projected to reach $15 billion in 2025 and is expected to jump to $22 billion to $24 billion in 2026. In addition to its core aerospace business, the funds raised in the IPO will also be invested in new areas led by Musk: the development of space-based data centers and related chips.

Elon Musk recently confirmed via social media platform X that SpaceX has achieved positive cash flow for several years and provides liquidity to employees and investors through regular share buybacks. He emphasized that the surge in valuation is a natural consequence of the technological breakthroughs achieved by the Starship and Starlink projects. Currently, SpaceX boasts an extremely prestigious shareholder lineup, including top institutions such as Founders Fund, Fidelity Investments, and Google.

OpenAI: A trillion-dollar IPO reshapes the AI capital landscape

OpenAI is reportedly preparing for a major IPO, aiming to raise at least $60 billion and achieve a valuation of $1 trillion. Sources indicate that OpenAI is considering filing for an IPO with securities regulators as early as the second half of 2026.

At the same time, OpenAI is also in talks for a funding round of up to $100 billion, which could bring its valuation to $830 billion.

The company aims to complete this round of financing by the end of the first quarter of next year and may invite sovereign wealth funds to participate in the investment.

This funding round comes against the backdrop of OpenAI's commitment to invest trillions of dollars and forging numerous partnership agreements globally in order to maintain its leading position in the AI technology race.

The core logic behind the financing is aimed at computing power dominance. OpenAI will need to invest over $38 billion in building data centers and server clusters over the next few years. Potential investors have formed four camps: tech giants (Amazon, Nvidia, Microsoft, and Apple, among others, seeking business partnerships), sovereign wealth funds (Middle Eastern and Singaporean funds seeking technology implementation and industry repatriation), Wall Street investment institutions (JPMorgan Chase, among others, vying for pre-IPO seats), and innovative financing models (government energy cooperation, special debt instruments, etc.).

Of particular note is the deep integration of geopolitical factors into the financing negotiations: multiple rounds of investment from the UAE's MGX Fund, Saudi Arabia's potential requirement for localization of data centers, and the indirect involvement of the US government through infrastructure cooperation have made this financing transcend the commercial realm and become a microcosm of the technological competition between major powers.

If the funding round is successful, OpenAI will set a new record by raising more funds than most countries' annual technology budgets.

Besides SpaceX and OpenAI, AI startups like Anthropic have also joined the "hot" camp with valuations exceeding $300 billion. The rise of these mega-giants stands in stark contrast to the sluggish performance of most tech IPOs in 2025.

Overall, 2026 may see a wave of IPOs by highly valued unicorns, with potential candidates including:

The IPO giants—SpaceX, OpenAI, and Anthropic—will redefine the size of the IPO market.
AI and Infrastructure: AI companies seeking funding for expansion, such as chipmaker Cerebras, and data center providers Lambda, Crusoe, and Nscale.
Fintech and Software: Motive, backed by Index Ventures, which sells safety technology to truck drivers; PayPay, a Japanese fintech company backed by SoftBank; and other mid-sized tech companies.
Companies that have postponed or are taking a wait-and-see approach: such as Perk, which has postponed its IPO plans to 2027, and a large number of candidate companies that are "waiting in line but not daring to knock on the door".

"There's a pool of potential IPOs waiting to go public, but nobody's going to rush into anything unless market acceptance of IPOs improves by 2026," said Jeff Crow, senior managing partner at Norwest Venture Partners.

It is worth noting that B2B industry leaders like Stripe and Ramp, with annual recurring revenues exceeding $1 billion, are currently opting for large-scale private financing or equity acquisition offers rather than going public.

Payment giant Stripe recently completed a takeover bid, valuing the company at $91.5 billion. The State Street Private Equity Index now represents a valuation of over $5.7 trillion, more than five times the $110 billion in committed capital when it launched in 2007. This abundance of private capital alleviates the pressure on companies from quarterly earnings call scrutiny and increased regulatory pressure associated with going public.

Tim Levine, CEO of Augmentum Fintech, Europe’s largest fintech fund, believes that “the likely exit strategy for many of our portfolio companies will be mergers and acquisitions rather than IPOs.”

Jeff Crow, senior managing partner at Norwest Venture Partners, also said his venture capital firm has seen a “better M&A climate,” with three companies in its portfolio being acquired by large tech companies in recent weeks.

03 Tech IPOs: The Rules of the Game Have Changed

Looking ahead to 2026, the global IPO market is at a critical juncture, transitioning from a "valuation winter" to "cautious optimism." Improved macroeconomic indicators, more predictable monetary policies, and the commercialization dividends of AI technology are collectively catalyzing a recovery in market sentiment.

A diversified global IPO pipeline is taking shape, and if market volatility can be effectively controlled, the IPO momentum accumulated in 2025 is expected to explode in 2026.

However, the road to recovery is not smooth, and the market is facing severe entry challenges:

●Severe IPO backlog: Hundreds of established unicorns that were originally scheduled to go public in 2022-2023 are still in the queue. They are more mature and have a more urgent need for funds.

● Significantly raised entry barriers: Market performance in 2024-2025 demonstrates that buyers are no longer accepting "marginal cases." Typical candidate companies need to have approximately $500 million in annual recurring revenue (ARR), a 50% growth rate, and strong unit economics.

● Complex macroeconomic dynamics: The pace of IPOs in 2026 will heavily depend on the stability of monetary policy, the easing of geopolitical tensions, and the robustness of the labor market.

Chart: Potential Factors Influencing Tech Company IPOs in 2026

The dramatic fluctuations since 2025 are essentially a painful correction of the market from irrational exuberance to a return to value. Except for a very few top giants, the public market has almost closed its doors to mediocre companies. Investors are no longer paying for "expected growth" and are instead scrutinizing profitability and sustainability with unprecedented rigor.

For entrepreneurs, the rules of the game may have changed permanently, and profitability, strategic clarity, and unit economic efficiency have become the keys to survival.

Jin Lu, the specially invited translator, also contributed to this article.

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