Despite significant uncertainty across global markets, initial public offerings (IPOs) demonstrated remarkable resilience in the first quarter of 2025. According to the latest EY IPO Trends 2025 report, the total value of IPOs rose by 20% year-over-year. Particularly striking was the 62% surge in the number of newly listed companies in the healthcare and life sciences sectors. Healthcare IPOs alone reached eleven—marking the highest number of debuts in over two decades.
Meanwhile, sweeping policy changes introduced by the U.S. administration have fueled record-breaking global defense spending. This is reflected in the IPO momentum of aerospace and defense firms. Among current IPO candidates, the technology, artificial intelligence, financial services, healthcare, and life sciences sectors continue to dominate.
However, despite an impressive number of profitable IPOs and a growing pipeline of candidates, market enthusiasm remains cautious.
AI’s Unstoppable Momentum
The report dedicates substantial attention to companies harnessing the transformative power of artificial intelligence (AI). AI is increasingly redefining business models and has become a strategic asset in the IPO process—enhancing operational efficiency and market readiness.
Interestingly, smaller firms have also successfully developed innovations in generative AI (GenAI), dispelling the myth that only tech giants can afford to fund such initiatives. As AI becomes an integral part of corporate strategy, it also plays a growing role in helping companies respond to external challenges such as shifting tariffs and disrupted supply chains. As markets remain volatile, the race to leverage AI for resilience and growth is accelerating.
Record Defense Spending Spurs IPO Activity
One of the key drivers of market disruption in Q1 2025 has been the policy overhaul by the new U.S. administration. Changes to the geopolitical landscape and new trade, tax, and immigration policies have introduced both opportunities and risks. EY notes that private aerospace and defense companies are increasingly eyeing public markets to expand their capital base.
Globally, nearly 3,500 private defense firms operate with venture capital (VC) backing. Those funded by private equity (PE), however, typically enjoy higher median valuations. Currently, around 90 defense-related companies are preparing for an IPO, and over ten are already in the registration phase. More than 300 are publicly listed. Among the current IPO candidates, over half plan to list on U.S. exchanges, with most cross-border transactions originating from Europe.
While increasingly turbulent geopolitical and macroeconomic conditions are changing the rules of the game, even the most profitable companies must now invest in more professional IPO preparation to succeed post-listing. Trade wars, persistent inflation risks, and growing economic uncertainty are weakening investor confidence.
“At the same time, the ongoing cycle of interest rate cuts could encourage more companies to consider going public,” says Anna Zaremba, EY Partner.
Investors Await Rate Cuts
Although many economies have eased monetary policy, interest rates remain elevated. Heightened market uncertainty—driven by trade tensions, regulatory shifts, and the rapid rise of AI companies—has made investors more selective. They now favor safer, more predictable returns.
IPO hopefuls must now present stronger financials and long-term value creation potential. Investors demand more than just solid earnings—they expect compelling growth narratives and resilience.
Methodology
EY analyzed IPO data for Q1 2025 to identify primary market trends and outline projections for the remainder of the year. Data sources included Dealogic, S&P Capital IQ, Mergermarket, PitchBook, AlphaSense, and EY’s internal analysis. Special purpose acquisition company (SPAC) data was excluded, unless otherwise stated.
Source: CEO.com.pl
