History Repeats? 2026 to See the Largest IPO Boom in History—Will the AI Feast Usher in a New Era or Repeat the "Dot-Com Bubble" Crash?

Wisdom Finance APP has noticed that the current market environment eerily reminds people of the final phase of the internet bubble 25 years ago. Extremely high valuations are a key similarity. Another commonality is that both eras revolve around a major technological paradigm shift, one that is not only driving market indices but also fueling the U.S. economy.

Another resemblance is the significant increase in IPO activity and other large-scale fundraising events through stock and bond issuance. These funds are being used to finance the massive AI infrastructure buildout currently sweeping across the United States.

As shown in the chart above, the amount of capital raised through the U.S. markets saw a massive surge in the second quarter. The last time companies raised such substantial funding from the public was in Q4 of 2021. Notably, this was at the end of a wave of large-scale IPOs and SPACs. That boom was driven by the Federal Reserve's loose monetary policy and a 40% growth in M2 money supply within two years from the start of the pandemic.

It is also noteworthy that the IPO and SPAC surge in 2021 receded sharply the following year. In 2022, the Nasdaq Index dropped by one-third. The S&P 500 declined by just over 18% in 2022. Fortunately, ChatGPT’s debut in November 2022 sparked an AI-related rally in the market, which has persisted ever since.

Last quarter, the IPO market was led by SpaceX (SPCX.US), which completed a massive public offering in mid-June. Elon Musk’s company raised a little over $85 billion from its market debut, making it the largest IPO in U.S. history. Less than two weeks later, the company again raised $25 billion from the public via a bond offering.

It’s worth noting that after SpaceX’s stock was met with significant enthusiasm upon listing, the share price experienced a roller coaster ride and has now returned to its initial IPO price, with a current market cap of about $1.8 trillion. For a company projected to generate less than $1.9 billion in revenue for fiscal year 2025, but with nearly $5 billion in losses, this is still not a bad result. Even so, the recent drop has wiped out more than $1 trillion in valuation from the stock’s post-listing peak. Thanks to changes in listing standards, SPCX is now included in many passive ETFs. Notably, the company’s bonds have declined sharply in the past few trading sessions.

Subsequently, chipmaker SK Hynix (SKHY.US) raised slightly over $26 billion through a U.S. listing last week. OpenAI and Anthropic are both eyeing their own IPOs in the near future. Anthropic aims for a debut this fall, while OpenAI is speculated to potentially go public in early 2027. Both loss-making companies are targeting a valuation of around $1 trillion.

Additionally, data center developers appear to be preparing to cash out on the AI boom by selling majority stakes in their companies. Potential data center-related firms include Netrality Data Centers, DataBank, Edged, and EdgeCore Digital Infrastructure.

As hyperscale data center capital expenditure budgets continue to climb, the scale of fundraising through debt, IPOs, and equity offerings will keep accelerating. At the very least, this will continue until the market can no longer bear such massive levels of equity and debt issuance. 2026 is expected to be the biggest IPO year on record.

So, for investors, will this massive wave of IPOs and capital raising take a different trajectory over the next few quarters than it did in 1999 and 2021? While AI-related firms are tapping the public markets for hundreds of billions to fund their capital expenditure budgets, insiders are cashing out a substantial number of shares.

For example, insiders at AI cloud service provider CoreWeave (CRWV.US) have sold around $2.3 billion worth of stock since its May 2025 IPO, following the expiration of the lock-up period. Over the past three months, they’ve sold a net total of slightly more than 18.5 million shares, which currently trade around $77.00 apiece, with a market capitalization of about $42 billion.

To borrow words from Mark Twain, history may not repeat itself, but it often rhymes. In light of this, analyst Bret Jensen remains cautious on the overall market. About a quarter of his portfolio is allocated to short-term U.S. treasuries, which are currently yielding nearly 4%.