Crypto and tech companies are leading gains in US IPO market

Newly public tech and crypto companies are big beneficiaries of renewed investor interest in the U.S. IPO sector.

Investors are trading the shares of newly listed companies enthusiastically, hoping for a company that will deliver consistent gains.

The sudden increase in investor interest in IPOs is sending shares of newly public companies soaring on their first day of trading. This enthusiastic trading resulted in the most fervent first-day trades the U.S. market has seen since the boom days of 2021.

The IPO wave is at historic levels

The recent streak of strong market debuts includes a 140% gain for the drone tech firm Airo Group Holdings Inc., a 168.5% increase for the stablecoin issuer Circle Internet Group Inc., and a jaw-dropping 735% surge for cable network Newsmax Inc. earlier this year.

Each of these firms raised over $50M in their offerings. Much of the momentum behind these IPOs is driven by professional traders and retail investors piling in on the first day.

Many of these buyers, however, weren’t able to secure shares during the actual IPO process, as that is typically reserved for large mutual funds and institutional investors committed to long-term positions. As a result, the post-listing surge is often a product of market hype.

“The companies that see huge day-one pops are typically younger, harder to value, and generate significant retail buzz,” Jay Ritter, a finance professor at the University of Florida who has studied IPO performance for decades, said. “What’s true about most of these companies is that they are not mature and they are hard to value.”

Between 1980 and 2023, 316 companies saw their shares double on debut. However, nearly 90% of them suffered negative returns over the next three years, with an average decline of 46% from their day-one closing price.

In essence, the IPO first-day hype has historically been a poor predictor of long-term success. Vroom Inc., for instance, posted a 118% gain on its debut in 2020 but filed for Chapter 11 bankruptcy last year. Even star IPOs like Airbnb Inc. and Snowflake Inc., which doubled on their first day in 2021, now trade slightly below their day-one closing prices.

Investors are holding out hope for the next Chipotle Mexican Grill Inc. The company is one of the few IPOs with a strong opening day that went on to deliver years of compounding gains. Chipotle’s long-term performance was so strong that the company announced a rare 50-for-one stock split last year.

New-gen stocks dominate the market

Circle’s $1.2B IPO is one of the largest of 2025 so far. The company’s stock surged 168.5% on its first day of trading,

“Circle’s listing marks a return of serious institutional confidence in the stablecoin sector,” Greg Martin, the managing director at Rainmaker Securities, a platform for private market transactions, said. “It reflects a belief that the regulatory headwinds may be clearing.”

Airo Group, which manufactures advanced drones for defense and commercial use, raised $60M and posted a 140% first-day rally, benefiting from favorable timing.

Just days earlier, President Donald Trump signed executive orders aimed at boosting the domestic drone industry amid escalating geopolitical tensions, including renewed conflict in the Middle East.

Airo’s executive chairman, Chirinjeev Kathuria, acknowledged the surge exceeded expectations. “I don’t think we expected it to go up that much,” he said in an interview. Insiders revealed that 70% of the 6 million shares offered were allocated to just five long-term investors, helping stabilize early demand and drive the price higher.

Even politically charged firms like Newsmax are benefiting from the revival, boasting a 735% opening gain after its $75M IPO in March. The company has experienced a slight decrease from those highs, but its stock is still up 24.2% from its IPO price as of Friday.

The market performed poorly in April due to the volatility at that time, but May and June have been more favorable and have opened a valuable window for companies to launch.

However, with the looming threat of geopolitical instability, such as the Iran-Israel conflict, along with persistent trade tensions, especially with China, companies doing well on the market have noticed a drop.

The digital health firm, Omada Health Inc., gained 21.1% on debut, but ended last week down 10% from its IPO price. Adtech startup MNTN Inc. rose to 64.8% in its first session, but is now up just 15.7% overall.

“There’s still a question mark as to whether we return to a more chaotic environment,” Martin of Rainmaker Securities said. “If we do, that could slam the IPO window shut very quickly.”