Strong recent activity and returns in the IPO market continue to provide a gauge that investor sentiment is high. As I wrote previously, IPO activity across major U.S. exchanges has largely rebounded to long-term average levels. Post-IPO returns reveal a meaningful divergence between technology and non-technology companies, mirroring the recent bull market in tech-related stocks. A deeper dive into a recent technology IPO may help illustrate why.
Recent technology-related IPOs have outperformed their non-technology counterparts. Since the beginning of 2024, there have been 23 ‘large IPOs’ – defined as deals raising more than $500 million in proceeds – with 11 coming from tech-related companies and 12 from non-tech sectors. On average, tech IPOs have seen a share price appreciation of 108% compared to their deal price. In contrast, the average non-tech IPO has ‘only’ appreciated by 49% relative to their deal price, as shown in the chart below.
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The chart also shows a more favorable distribution of outcomes for tech IPOs. Technology’s best performing IPO, CoreWeave, has returned 237% compared to its deal price, whereas Amer Sports’ 188% return since its deal is the best performer in the non-tech cohort (price return data from FactSet as of 6/5/2025 closing prices).
A closer look at CoreWeave highlights why some technology IPOs have delivered such strong performance. CoreWeave exhibits several distinguishing characteristics compared to its peers. Public market investors appear willing to pay premium valuations for businesses they perceive as uniquely positioned to sustain long-term competitive advantages.
CoreWeave’s specialized cloud computing architecture has become a key enabler for emerging AI applications. According to company reports, OpenAI is one of CoreWeave’s largest customers, selecting the company to help them train and host their latest AI models. CoreWeave also earned the #1 ranking in SemiAnalysis’ March 2025 GPU Cloud ClusterMAX™ Rating – a third party scoring system evaluating cloud providers on factors such as security, reliability, and usability, among other factors. CoreWeave’s rating even exceeded those of major incumbents like Microsoft Azure and Amazon AWS.
This recognition may help explain CoreWeave’s ambitious growth outlook. Analysts polled by FactSet estimate CoreWeave can grow revenue to $16.4 billion in 2027, up from 2024’s $1.9 billion (data as of 6/6/2025). If the company can achieve this estimate, it would represent a 105% compounded annual growth rate, a growth rate that is significantly above many other technology companies. Outsized growth of this nature may help investors point to unique operating abilities. With hardware and software engineered to work in tandem, CoreWeave may be able to maintain a performance edge over its peers and continue fueling its outsized expansion.
The IPO market has largely recovered and underscores the market’s appetite for innovation-driven growth stories. Companies like CoreWeave have captured investor enthusiasm by offering not just scale, but also differentiated capabilities in fast-growing sectors like AI infrastructure. Investors should remain selective, distinguishing between companies with durable value propositions and those benefiting from short-term hype. The IPO market’s recent rebound may be just the beginning of a longer-term rotation toward next-generation technology platforms.
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For more content by Blake Anderson, CFA®, Associate Portfolio Manager click here
