Investment Strategy
The Brew: The 2026 IPO Class – Real Innovation, Realistic Expectations
The latest IPO class offers investors access to potentially transformative companies, but strong narratives must still be measured against business fundamentals, valuations, and execution.
June 2 2026
Few investing stories have generated more excitement than the companies preparing to go public in 2026. SpaceX, reportedly valued near $1.8 trillion, and Anthropic, around $1 trillion, anchor a pipeline where roughly 90% of the value is tied to artificial intelligence. The innovation is genuine, and the enthusiasm is easy to understand.
But excitement and investment returns are not the same thing. Decades of research show that buying newly public companies in the open market has typically been a losing trade. Recent cohorts have been especially difficult: every IPO class from 2019 through 2024 trailed the broad market over its first three years, several by more than 70 percentage points.
Market-adjusted = cohort return minus the CRSP value-weighted market. Source: Jay R. Ritter, University of Florida, Table 19 (updated Feb. 2026).
Why the gap? Much of the value in these businesses is created while they are still private, so public investors often arrive late, after the easiest gains are gone. The widely reported first-day “pop” rewards those with pre-IPO access, not those buying once shares trade.
The encouraging part is that you may already own the exposure. Through holdings like Microsoft, Alphabet, and Amazon, a typical diversified portfolio already carries meaningful stakes in OpenAI, Anthropic, and SpaceX, with daily liquidity, public-company governance, and often a lower implied valuation than the IPO itself.
Our guidance is not to ignore innovation, but to pursue it with discipline. When it comes to new listings, the entry point has mattered more than the story.
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