Wall Street prepares for boom in tech IPOs after Cerebras’ success

{"text":[[{"start":8.05,"text":"Wall Street is bracing for a wave of tech listings after investors piled into the initial public offering of semiconductor group Cerebras Systems, reinforcing bankers’ expectations that fundraisings could hit record highs this year."}],[{"start":22.65,"text":"The AI chip designer pulled off the largest semiconductor IPO in history this month, raising $6.4bn including the overallotment option, after bankers repeatedly raised the price and size of the offering."}],[{"start":35.9,"text":"Cerebras’ shares ended their first day of trading up 68 per cent, valuing the start-up at about $70bn, on par with 117-year-old General Motors."}],[{"start":47.15,"text":"The buoyant Cerebras offering reinforced that the market was enthusiastic about new listings, according to several tech bankers. "}],[{"start":55.7,"text":"Magdalena Heinrich, Bank of America’s head of US tech equity capital markets, said Wall Street was on pace for nearly $90bn of IPOs this year. "}],[{"start":64.85000000000001,"text":"The SpaceX listing expected for June, along with possible share sales for Anthropic and OpenAI, would tip this year’s haul well beyond the record $156bn of US IPOs in 2021, according to Dealogic."}],[{"start":79.4,"text":"“Capital is a competitive advantage — that’s why we are seeing this new rush to the public markets,” Heinrich said."}],[{"start":85.2,"text":"Bankers said the big AI labs such as Anthropic and OpenAI need more capital than private markets could provide, with public listings opening up new funding channels such as convertible bonds and easier access to debt capital markets. "}],[{"start":99.25,"text":"Jamie Turturici, head of technology, media and telecom equity capital markets at Barclays, who worked on the Cerebras listing, described the environment as “the front innings of a longer cycle”."}],[{"start":111.35,"text":"“Buy-side appetite for deals is very high,” said Turturici, adding that IPO shares had outperformed the wider market this year."}],[{"start":119.14999999999999,"text":"He said his team at Barclays had their largest pipeline of IPO candidates in more than six years, with “companies in the semiconductor ecosystem racing to get to market”."}],[{"start":null,"text":"

"}],[{"start":130.39999999999998,"text":"A return of large equity raises would be a boon for Wall Street after several years of lacklustre deal activity. "}],[{"start":137.34999999999997,"text":"The 1,010 IPOs and Spacs (special purpose acquisition companies) completed in New York in 2021 collapsed to 148 two years later, according to Dealogic. Volumes have slowly recovered, with public market fundraising from January to April this year up 124 per cent from the same period a year ago, the data shows."}],[{"start":159.19999999999996,"text":"AI labs such as OpenAI, Anthropic and SpaceXAI — formerly xAI, which Elon Musk rebranded when it merged with the rocket maker — are particularly hungry for capital as they race to build vast data centres to power their models. "}],[{"start":175.14999999999995,"text":"Investors have also piled into the infrastructure supporting this AI-driven boom in computing."}],[{"start":180.54999999999995,"text":"Nvidia, the leading AI chipmaker, and Broadcom, an important AI chip supplier to Google, are trading around all-time highs with market values of $5.4tn and $2tn respectively. "}],[{"start":193.19999999999996,"text":"Shares in energy groups are also setting records, with shares in Bloom Energy, whose fuel cells provide on-site electricity to data centres, up more than 1,200 per cent over the past year."}],[{"start":204.69999999999996,"text":"Heinrich of BofA said the enthusiasm for semiconductor and energy shares made sense because chips and power are the two most direct ways to gain exposure to the AI build-out in the public markets. "}],[{"start":216.09999999999997,"text":"“Everyone wants to invest behind AI. The technology is fundamentally changing the world we live in,” she said."}],[{"start":222.79999999999995,"text":"Rob Stowe, Barclays’ head of equity capital markets in the Americas, said the activity levels and engagement of investors were reminiscent of bumper years such as 2021. He noted the new listing activity was broader than just tech — with healthcare, real estate and clean energy also attracting significant investor demand in recent weeks."}],[{"start":243.59999999999997,"text":"“[We] are seeing pretty good capital formation across a lot of different parts of the market right now,” he said."}],[{"start":257.04999999999995,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1779240466_2261.mp3"}