Goldman Sachs CEO David Solomon Predicts Resurgence in IPO Market and Dealmaking

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Key Highlights:

Goldman Sachs CEO David Solomon anticipates the end of the multi-year IPO drought, predicting a surge in initial public offerings (IPOs) and dealmaking.

Despite challenges such as rising inflation and regulatory hurdles, Solomon expressed optimism for improved business conditions ahead of President-elect Donald Trump’s inauguration.

The tech IPO market, which had been dormant since 2021, is expected to recover as market conditions stabilize.

Key Background:

David Solomon, CEO of Goldman Sachs, expressed optimism on the future of the IPO market, signaling the end of the multi-year drought that has subdued initial public offerings. Speaking during a summit in Silicon Valley on January 15, 2025, alongside Cisco CEO Chuck Robbins, Solomon remarked that the IPO market, which has been sluggish in recent years, is poised for a recovery. “It’s going to pick up,” Solomon affirmed, acknowledging that while the market has been “slow” and “turned off,” there are signs of renewed momentum.

The IPO market has faced significant challenges, particularly within the tech sector, which has been largely dormant since late 2021. Factors such as soaring inflation and rising interest rates caused tech stocks to fall out of favor, while mergers and acquisitions (M&A) also slowed due to regulatory restrictions. Solomon, however, believes that a shift in sentiment is underway. He pointed to a more constructive business environment and an increased appetite for deal making, which is expected to drive both M&A activity and IPOs in the coming months.

Solomon’s optimism coincides with broader market trends, including a notable rally in the S&P 500. On the same day as his comments, the S&P 500 posted its largest gain since November 2024, aided by Goldman Sachs’ strong fourth-quarter earnings. Despite these positive market trends, the IPO market has yet to see a full resurgence, though some notable companies, including chipmaker Cerebras and online lender Klarna, have taken steps toward going public.

Solomon also pointed out that the current IPO landscape is shaped by a significant reduction in the number of public companies, which has dropped from approximately 13,000 to 3,800 over the past 25 years. He noted that the availability of private capital at scale has made it less appealing for companies to pursue a public listing, with the increased regulatory and disclosure burdens further deterring potential IPO candidates. While Solomon remains bullish about the IPO market’s prospects, he emphasized that structural changes in the market are likely to keep a significant number of companies from going public in the near future.