While everyone was talking about Reddit, Astera Labs quietly took the IPO market by a storm.
Astera Labs is a California-based AI tech firm that provides hardware and software for AI computing. The company — which counts Nvidia, Advanced Micro Devices, and Intel among its customers — went public for $36 per share on March 20.
Even after pricing above its target range, Astera Labs’ shares rose a staggering 72% upon its debut on the Nasdaq. Its stock hit a new high of nearly $87 on Monday (March 25), making the company an anomaly in the IPO market (which typically sees newly public companies’ shares sink upon their first or second days of trading).
It’s a go for IPOs
Astera Labs’ huge stock rally coupled with Reddit’s initial success is a strong sign that the IPO market is making a comeback.
Scott Galloway, an NYU professor and podcast host of Pivot, said in a recent episode that “Astera Labs illuminated the runway,” and “Reddit landed the plane” when discussing the return of the IPO market.
After a tech IPO frenzy in the early days of the pandemic, the IPO market lagged in 2022 and 2023. Last year, the global IPO market saw its slowest fourth quarter since 2012, according to S&P Global Market Intelligence data.
The biggest IPO in 2024 so far has been Finnish athletic company Amer Sports, the maker of Wilson tennis rackets, which raised $1.37 billion in its February debut. Astera Labs raised nearly as much capital from its IPO as Reddit, drumming up $712 million.
So far in 2024, there has been a more than 20% increase in the number of companies going public compared to last year. After Reddit’s IPO, experts told Quartz they anticipate more companies will file to go public.