After a stellar year, stocks are coming off a strong performance in 2024, with the S&P 500 (^GSPC) up 23%, marking its second consecutive year of annual returns of more than 20%. This performance is the first since 1998 and shows a strong recovery in the market.
As markets pick up, initial public offering (IPO) activity in 2024 has picked up as well. Although the number of IPOs in the United States exceeded 400 in 2021, the deterioration of the economic situation has led to a decrease in investor risk appetite. The number of IPOs in the United States dropped to 90 in 2022, and the market remains sluggish in 2023. However, as of the third quarter of 2024, a total of 121 companies in the United States have successfully gone public, up from 101 in the same period last year. Many analysts predict that this momentum will continue into 2025, setting the stage for Chime, Databricks, and Stripe to go public.
Here are the details on these three highly anticipated IPO stocks that investors should keep an eye on.
1. Chime
1. Chime
Chime is a fintech company founded in 2013 to make banking simpler, more useful and free. Its products include no-fee checking accounts, high-yield savings accounts, debit cards, and secured credit cards (secured by a cash deposit). Additionally, Chime offers a product called SpotMe that allows users to get up to $200 in free overdraft protection.
In August 2021, Chime closed a $750 million funding round that valued it at approximately $25 billion. The company has not raised additional capital since then, but platform Forge Global is valued at about $25 billion. Although Chime had originally planned to go public in early 2022, the IPO was delayed due to factors such as high inflation and rising interest rates. However, a Bloomberg report states that Chime plans an initial public offering in 2025, although this plan has not yet been finalized.
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2. Databricks
2. Databricks
Founded in 2013, Databricks is a leading data analytics software company focused on big data and artificial intelligence. Earlier, IT consulting firm Gartner named Databricks a leader in data science and machine learning. According to the report, Databricks is the only tool vendor that can compete with Amazon AWS, Microsoft Azure, and Alphabet Google Cloud. Its strong ties to the artificial intelligence boom made the company a popular choice when it went public.
In December 2024, Databricks closed a $10 billion funding round, sending its valuation soaring to $62 billion. Still, Databricks CEO Ali Ghodsi said that while an IPO is a possibility, the company may not go public until 2026. Therefore, investors should continue to pay attention to the development of Databricks, especially its breakthroughs in the fields of artificial intelligence and big data.
3. Stripe
Founded in 2010, Stripe is a leading fintech company that provides a payment processing platform that helps businesses accept payment cards and digital wallets online and offline. Stripe's suite of tools for the e-commerce marketplace, including merchant authentication, customer payment processing, and paying sellers, has already attracted big-name companies like Amazon, Shopify, and Instacart as customers.
Stripe is currently valued at about $65 billion, a valuation it confirms largely by allowing employees to cash out their stock. In 2023, its total payments volume grew 23%. Additionally, Stripe said in its latest annual letter that cash flow performance was strong in 2023 and it expects to continue to perform well in 2024. These strong financial numbers make Stripe likely to be a particularly attractive option for investors, especially those wary of high cash-burning companies, when it eventually goes public.
Conclusion
As economic and market conditions pick up, there will be many highly anticipated IPOs in 2025. Chime, Databricks and Stripe all represent technological innovation and market opportunities in different areas, and they all have strong growth potential and appeal. If these companies are successfully listed, investors will have investment opportunities worth paying attention to. Although the specific timetable for the listing of each company has not yet been determined, in any case, continued attention to these innovative companies will provide investors with new investment opportunities.
Which Stock Should You Buy in Your Next Trade?
AI is a growth business
According to International Data Corporation, the global artificial intelligence market is expected to grow from $235 billion in 2024 to more than $631 billion in 2028.
With the AI market already large and still growing quickly, plenty of companies can profit from AI. Although picking stocks in a growth industry comes with a lot of uncertainty, these top AI stocks are all worth considering.
FAQ
Artificial intelligence stocks: FAQ
What is the best AI stock to buy?
Artificial intelligence is a fast-moving technology, and AI stocks will likely be volatile as the sector evolves. Some AI stocks that have attracted the most attention include Nvidia, Microsoft, and Alphabet, but finding the best stock to buy is also a matter of price and valuation, which changes quickly.
Is it good to buy Nvidia stock?
Nvidia has jumped into the lead among semiconductor companies in making AI chips and accelerators, but the space is changing rapidly, and competition is coming from Advanced Micro Devices and others. The semiconductor sector can also be highly cyclical, and pricing can change rapidly. If Nvidia can maintain its lead in AI chips, the stock should continue to be a winner, but the stock will likely be volatile since the AI landscape is still developing.
What is the biggest AI company?
Currently, the biggest company that has made AI central to its business model is Nvidia, with a market cap that has soared past $3 trillion. The tech giant is at the center of the AI revolution as its components are fueling AI applications and are in high demand by major cloud infrastructure companies.
Is AI good for investing?
Artificial intelligence is likely to shake up the economy and the business world, creating opportunities in the stock market as that happens. Whether AI is good for investing will depend on the company, but there will be winners from the new technology.
What company is No. 1 in AI?
Currently, Nvidia is broadly considered the leader in AI technology. The company has a monopoly-like market share in the data center GPU market and its revenue has more than tripled since ChatGPT launched. Nvidia isn't guaranteed to remain the leader, though. Competition is on the way.
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