New kids on the block

You know IPOs are back when everyone from an e-scooter startup to the parent company of Dunkin’ Donuts is announcing plans to go public.

But perhaps the best example of a buzzy IPO market is Enhanced Games, an Olympics-style international athletic competition where performance-enhancing drugs are encouraged. Shares jumped over 20% on the company’s first day of trading after a SPAC merger last week.

Zoom out: For years, the IPO pipeline was frozen thanks to higher interest rates and ongoing market volatility. But over the past year, the tech sector has embraced lax regulation and, taking a cue from investors, is shrugging off red flags about the economy and moving full-steam ahead. Major IPO filings like SpaceX may be the flashiest, but a slew of others show just how hungry investors are for new investment options.

The chips are down…to go public

This is about to be a busy week for new listings, and it all starts with Cerebras Systems. The AI chipmaker just signed a major contract with OpenAI in December, and since the company filed for an IPO earlier this month, it’s become a highly anticipated debut.

• When the company first filed, it planned to sell 28 million shares at a price between $115 and $125. But thanks to booming demand, Cerebras just upped its IPO offering to 30 million shares priced between $150 and $160.
• That means the company is now aiming to raise $4.8 billion in the IPO, up from its previous $3.5 billion, making it the biggest IPO of the year so far.

What makes Cerebras stand out in a market already saturated by AI chip stocks is that it is thinking bigger. Essentially, its Wafer Scale Engine 3 chip is a giant, multi-purpose chip—sort of like a 3-in-1 shampoo, conditioner, and body wash for AI. The drawback is that this kind of chip better supports smaller AI models. But that market seems to be more than enough to support the company’s business: Its revenue grew 76% last year.

All things AI

It isn’t just chipmakers—the AI boom is boosting demand for IPOs across the markets, from energy to asset management.

Geothermal power company Fervo Energy, which is expected to debut this week, said today it is upsizing its IPO, now seeking a valuation of $7.4 billion, up from its previous goal of $6.5 billion. The reason, of course, is the surge in investor excitement about the debut, which will give the retail crowd another opportunity to gain exposure to the industry powering AI datacenters.

Then there’s Blackstone Digital Infrastructure Trust, which filed for an IPO last week and is looking to raise up to $1.75 billion. Unlike the other IPOs above, this isn’t a buzzy new startup, but the datacenter acquisition arm of asset management behemoth Blackstone. The plan is for the new venture to buy already existing data centers, giving traders the chance to indirectly make a play on the AI hardware expansion.

With this much excitement about IPOs, we have some news: The Brew Markets Datacenter Co. will be looking to make the jump into public markets shortly.—LB