As the second half of 2025 gets underway, global capital markets appear to be gradually absorbing the political and geopolitical shocks that dominated the earlier part of the year. Trade tariffs, regional conflicts and macro-policy uncertainty — once primary triggers for volatility — are increasingly being priced into asset valuations. Equity markets have regained ground, volatility gauges like the VIX have moderated and capital flows are diversifying toward regions with deep capital pools such as Hong Kong.
At the mid-point of 2025, sentiment in the global IPO market reflects a cautiously optimistic tone, according to the EY Global IPO Pulse Survey conducted with institutional investors in June. There are signs of renewed momentum in the US and India, early indications of recovery in Europe and continued strong activity across parts of Asia-Pacific and the Middle East — particularly in Hong Kong and the Chinese mainland.
In a more positive scenario, a global IPO market rebound could materialize in the second half of 2025 or early 2026, given more cooperative trade frameworks, accommodative monetary policy, controlled inflation and geopolitical de-escalation. These developments would help stabilize business activity and economic growth, improve equity valuations and capital market momentum, and reduce market volatility — conditions that typically foster renewed investor confidence.
Clearer regulatory and policy signals, a firm macroeconomic footing and potent sector-specific catalysts are also pivotal to igniting IPO momentum within relevant sectors. While broader structural reforms and innovation play an important role, sustained recovery fundamentally hinges on geopolitical stability and unambiguous monetary policy.
Interestingly, investor priorities are no longer confined to traditional financial metrics such as profitability and EBITDA growth. While these fundamentals remain essential, the latest EY Global IPO Pulse Survey reveals an evolving investment lens. Three of the top five factors influencing investor interest over the next six months are non-financial in nature: research and innovation; brand strength and market positioning; and the quality of corporate strategy and its execution.
This shift underscores a growing recognition that long-term value creation is increasingly driven by intangible assets and strategic vision. Investors are placing greater emphasis on a company’s ability to differentiate through innovation, build resilient and trusted brands, and execute clearly defined growth strategies. These elements are seen not only as indicators of future performance but also as signals of adaptability in a rapidly evolving market landscape.
In fact, this subtle but notable shift in investor sentiment toward growth-oriented equity stories has started to manifest in the US, Middle East and Greater China. The market is showing renewed appetite for innovation and scalability, especially in sectors benefiting from supportive policy environments. Technology, health and life sciences, and financials are emerging as key beneficiaries of this trend. These sectors are drawing increased attention from both institutional and retail investors, as they align with long-term structural themes such as digital transformation, health care innovation and fintech disruption.
In Europe, however, listing activity has trailed other regions since early April, following the market disruption triggered by the US administration’s sweeping tariff announcements. The upcoming September-October window could be a critical testing ground. Several high-profile listings are scheduled during this period, which market participants view as a litmus test for broader investor appetite and the potential for a more robust recovery heading into 2026.
However, the outlook could weaken under a second scenario if high or unevenly easing interest rates, entrenched inflation and ongoing geopolitical tensions continue to dampen investor sentiment.
The situation could deteriorate and delay the narrow IPO window further if major policy shocks or regional geopolitical escalations — such as renewed trade disputes — trigger a sharp decline in risk appetite and delay interest rate cuts. A flight to safe-haven assets would likely follow, effectively stalling IPO activity, particularly in Western economies. In this scenario, only the most resilient and strategically positioned companies would be able to proceed with listings, navigating heightened volatility and investor scrutiny.
Even in uncertain times, there are pockets of opportunity at more granular sector levels. The accelerating global trends of reshoring, nearshoring, and “friend-shoring” strategies are fueling a robust pipeline across specific industrial segments. This is particularly evident in construction, engineering, and advanced or sustainable manufacturing sectors, as companies invest heavily in localizing production and fortifying supply chains. Listings in the mobility space are gaining momentum due to supply chain reconfiguration and rising demand for auto components, particularly in China.
In the energy sector, IPOs span both traditional and clean energy. Mid‑cap nuclear innovator like Oklo and large Liquid Natural Gas (LNG) deals like Venture Global signal a realignment toward resilient infrastructure assets, bolstered by AI-driven power demand, clean energy transitions and geopolitical risk including regional conflicts. Significant global political momentum behind increased defense spending is directly funneling capital into defense innovation, strengthening the aerospace and defense IPO pipeline, with particular attention on defense tech firms. As countries prioritize national security and technological superiority, companies offering cutting-edge solutions in areas like cybersecurity, advanced materials and autonomous systems are likely to attract substantial investor interest.
Mining and materials firms, particularly those focused on gold, lithium, rare earths and critical minerals essential for defense and clean energy, are gaining traction as governments and investors secure strategic resources.
Digital asset plays are also drawing notice: stablecoin pioneers such as Circle Internet Financial are laying the groundwork for public offerings, part of a broader reopening of crypto and fintech IPO avenues as stablecoins enter mainstream adoption. The life sciences sector is also seeing more activity from China, where breakthroughs in cell and gene therapies, diagnostics and biotech platforms are driving renewed investor interest. Even with diversification, technology remains the backbone of the IPO pipeline. Cloud infrastructure, SaaS and AI hardware continue to attract substantial capital.
Semiconductor and electronics firms, particularly those supporting AI and industrial automation, continue to be key IPO candidates. These developments reflect a more discerning capital market where investors increasingly factor in volatility and gravitate toward issuers aligned with long-term growth, technological advancement, and structural spending themes over shorter term speculative assets.
Global equity markets have surged to fresh record highs this July, even as investors navigated renewed US tariff announcements, responding with brief volatility rather than broad-based selloffs. Nonetheless, the global economy is facing increased disinflationary pressures, while business activity is anticipated to maintain a modest but uneven pace, according to EY’s 2025 midyear global economic outlook. Regional growth has become increasingly fragmented, with developed markets showing signs of fatigue and emerging markets displaying mixed resilience.
Despite the broader cooling in economic conditions, companies aligned with national priorities and innovation, and those able to present a credible equity story with realistic valuations and flexible timing, are likely to succeed in navigating this complex environment.
