Funding the AI Supercycle: IPOs, Liquidity & Growth | Nelson Griggs, Nasdaq | RAISE Summit 2026

IPO Market Overview and Pipeline Trends

• The public markets are experiencing a significant reopening, described as the "window is open," with the highest level of IPO diversity and pipeline volume in over 25 years.
• SpaceX completed what is characterized as the "biggest IPO of all time," joining the NASDAQ 100 just 15 days after trading began.
• The average time for private companies to reach a public listing has historically been 17 years, though AI infrastructure needs are accelerating this timeline.
• The current IPO pipeline includes a mix of "mega, mega caps" and broad-based mid-cap listings, driven by strong investor receptivity.
• The year 2021 saw excessive IPO activity ("too hot"), followed by a severe lull in 2022 and 2023, with activity rebuilding in 2024 and accelerating further in 2025.
• A "billion-dollar IPO" raise is now common, with the pipeline for late 2025 and 2026 described as "as strong as we've seen in many years."

Valuation Benchmarks and Profitability Shifts

• The benchmark for viable IPOs has shifted materially higher; public market investors now generally require north of $200 million ARR, with $500 million revenue serving as a strong benchmark.
• There is a strategic pivot toward balancing high growth with a credible path to profitability, moving away from the "growth at all costs" model of 2021.
• Public market valuations are currently trading at 25-26 times earnings, which aligns with the average of the last four years rather than indicating a super-expensive bubble.
• Retail investor participation has surged from 10% of the U.S. public market pre-COVID to 25% currently, creating new pools of capital for growth stocks.
• A significant divergence exists in the valuation of European tech companies; U.S. investors offer higher valuations for global growth stories compared to London or other European exchanges.

AI Infrastructure and Capital Needs

• Goldman Sachs estimates AI spending required to sustain the build-out could reach $8 trillion by 2031.
• While private companies like OpenAI and Anthropic have raised more than SpaceX's IPO in private placements, the public market is deemed necessary to sustain liquidity for these massive capital needs.
• Private market liquidity has increased dramatically; the average time between tender offers for private companies dropped from 900 days in 2022 to 150 days last year.
• The "Magnificent Seven" companies are facing pressure on free cash flow due to heavy AI infrastructure spending, but use cases are currently being deployed as infrastructure comes online.
• Chip sector IPOs are re-emerging as a high-growth area, with SK Hynix planning a $29 billion ADR listing to be the second-largest IPO of all time.

NASDAQ Index and Listing Rule Changes

• NASDAQ introduced "fast entry" into the NASDAQ 100 for companies with a market cap of roughly $100 billion (top 40%) that would otherwise miss the 1-year waiting period.
• This change addresses the reality that a $100 billion company has already achieved market maturity and scale, making the traditional 12-month price discovery window less relevant.
• The NASDAQ 100 index is market-cap weighted, but an adjustment was made to weight SpaceX based on three times the float rather than total market cap to manage passive fund ownership limits.
• Approximately 25% of shares for mega-cap U.S. companies on NASDAQ are now held by passive funds, making index inclusion critical for liquidity.
• Russell and other global exchanges have adopted similar fast-entry models, whereas S&P remains distinct due to its strict profitability standards.

European Market Dynamics

• Spoons (Spending Spoons) completed a $1.6 billion IPO in the U.S., marking the largest European tech listing since ARM in 2003.
• The primary driver for European companies listing in the U.S. rather than home markets is the disparity in valuations and liquidity between U.S. and European exchanges.
• Stockholm, Sweden, is cited as a European exception with a strong equity culture; 35% of the population owns equity, supported by pension rules that allow investment in growth companies.
• NASDAQ owns the Stockholm Stock Exchange, leveraging the Nordic market's success in capital raising and company retention.
• The consensus among NASDAQ is that without a local "equity culture" that tolerates risk, European exchanges struggle to retain high-growth companies domestically.

Forward-Looking Statements and Risks

• The IPO pipeline is projected to remain strong through September, October, and November, with a "little break" expected in August.
• While the economic backdrop is strong, volatility remains a key risk factor, particularly regarding "straight environment" (likely geopolitical or regulatory) uncertainty.
• Sector rotation is expected to continue, with value stocks currently outpacing growth, though the long-term secular trend in AI and technology remains intact.
• The SEC is viewed as progressive, potentially enabling easier on-ramps for private companies with appropriate disclosures to access public capital pools.
• Some high-profile private AI companies may delay IPOs until 2026 to avoid "cannibalizing" the immediate market attention from 2025 launches.
• The demand for AI stocks is so intense that 65% of venture capital in Silicon Valley is currently flowing into AI and chip stocks.