Like most investors looking for the next multi-bagger growth stock, I like to stay on top of the IPO market.
2023 were dry times for IPOs with just 108 new companies ($19.4 billion raised), but 2024 was stronger, finishing with 150 IPOs that raised a total of $29.6 billion.
And it’s looking even better for 2025.
Here’s why…
Goldman Sachs publishes an insightful IPO Issuance Barometer for the U.S. It’s based on five components and measures how conducive the macro environment is for IPOs.
This barometer currently stands at 137, well above the reading of 100, which is consistent with the typical frequency of IPOs.
This is bullish, not just for the IPO market but for other M&A activity as well.
There’s good reason to think that M&A and IPO activity will continue to accelerate under a Trump administration.
While details remain fuzzy, the Republican agenda favors deregulation, which greases the wheels for business combinations and new offerings.
A relatively stable stock market is also good for IPOs, as is improved confidence among corporate execs, investment banks and investors.
Here are two upcoming IPOs I suggest keeping an eye on.
2 New Stocks to Watch
ServiceTitan (TTAN)
Software platforms have been used to transform nearly every industry out there. But the construction, renovation and service trades haven’t had a lot of great options.
ServiceTitan (TTAN) is changing that. Plumbing, roofing, HVAC, painting, landscaping, pest control and other trade businesses are increasingly turning to the company to better manage all aspects of their business.
As of the beginning of 2024, the company had 8,000 Active Customers (those with over $10,000 in annualized billings). In the twelve months ending July 31, 2024, the company generated $685 million in revenue and processed $62 billion of Gross Transaction Volume (+23%).
The stock initiated trading at 101 after pricing at 71 per share, above the initial price range of 52 to 57. That’s one of the biggest increases in pre-IPO pricing we’ve seen in a long time.
Service Titan, which was founded in 2007, is also interesting because it is venture-backed, with names that include Iconiq Growth, Battery Venture, Bessemer Venture Partners and TPG Tech.
According to Avery Marquez of Renaissance Capital, this is a good sign as it could signal potential to unlock the large backlog of venture-backed companies out there.
CoreWeave
One of the biggest names likely to come public in early 2025 is CoreWeave, a cloud computing services company with backing from Nvidia (NVDA).
The company rents Nvidia-chip-equipped computer services to artificial intelligence (AI) app developers. This gives CoreWeave a GPU-as-a-service business model and makes it a competitor to the big cloud computing mega-caps, like Amazon (AMZN) and Google (GOOG) that have begun to build their own AI accelerator chips in order to reduce reliance on Nvidia.
While the direct connection to Nvidia can be seen as a plus, especially given the inside track to source next-generation B200 Blackwell AI chips, it remains to be seen if this narrow band of chip offerings from Nvidia will evolve into a liability.
Analysts point out that Amazon’s AWS has access to a broader menu of chips that can be matched to a variety of applications. Not every application requires the Ferrari of chips.
On the other hand, current demand for advanced AI functions means demand for CoreWeave’s solutions is hot. The Information recently reported that Microsoft (MSFT) is the company’s biggest customer as it tries to meet demand for ChatGPT use cases.
CoreWeave is reportedly on track to generate $2 billion in revenue this year, then quadruple revenue to $8 billion in 2025.
It’s no wonder this is expected to be a major IPO.
The last funding round, from mid-November, gave CoreWeave a $23 billion valuation, up more than 3-times from a year earlier. Investors in that round included Cisco (CSCO), Pure Storage (PSTG) and BlackRock (BLK).
We don’t know when CoreWeave expects to announce a target IPO date. But the company has just hired Morgan Stanley (MS), Goldman (GS) and JP Morgan (JPM), so clearly it’s getting ready.
