After a long wait, “the IPO market is back.” This is what Colin Stewart, global head of equity capital markets at Morgan Stanley Technology, said. On Monday, in an interview, Stewart said that by the end of 2024, 10 to 15 technology companies will probably go public, and 2025 will be a “better year.”

“It's been a long two and a half years, and we really have nothing,” Stewart notes. He added that the recent IPOs were highly priced and the deal was good, which “bodes well for the future.”

This calm began in 2022, when soaring inflation and rising interest rates forced investors to flee risk, tech stock valuations fell sharply, and many tech companies delayed listing plans. This is in stark contrast to the previous two years, which had a record number of transactions, some of which had astronomical valuations.

In September of last year, along with$Instacart(Maplebear) (CART.US)$und$Klaviyo (KVYO.US)$With the listing, the IPO market is picking up again. But in reality, the first real signs of recovery appeared last month.$Reddit (RDDT.US)$Became since 2019$Pinterest (PINS.US)$First large-scale social media company IPO since then, data center connectivity chip company$Astera Labs (ALAB.US)$It surged more than 70% on the first day of listing.

The current share prices for both stocks are well above their issue prices. With investors investing heavily in everything related to artificial intelligence, Astera's stock price has increased cumulatively by about 145% since listing.

Morgan Stanley is the lead bank for Reddit and Astera IPOs and is expected to charge a total fee of approximately $37 million.

Last week, its Wall Street rival Goldman Sachs led the latest round of venture-backed tech company IPOs. Data management software developers$Rubrik (RBRK.US)$It rose 16% on the first day of listing on the NYSE.

Over the past few decades, Stewart has participated in some of the biggest IPOs. He said that IPOs usually take six months to complete. He said this means that companies currently considering an IPO may delay it until 2025 to avoid conflict with the US presidential election in November.

As for valuations, Stewart said the market has retreated from its peak in 2021, and price-earnings ratios in software and other technology sectors have now returned to 2018 and 2019 levels. Stewart described 2021 as an “amazing year,” but also “exhausting.”

“What has happened in the past 6 to 12 months is that the market is more relieved to pay for growth again,” Stewart said. “We haven't returned to 2021 levels yet, but we are getting a fair price for growth. I think at a price like this, you'll start seeing companies say, 'You know, it's actually not bad to be a public company. '”

Despite this, the most valuable late-stage companies have yet to exit. These include Musk's SpaceX, Stripe, and Databricks.

Stewart said that while he is “happy to have these companies listed,” he acknowledged that the challenge facing large companies is “they have scale and growth, investors have given them a lot of money” and that they are investing in the future.

“Unfortunately, IPOs aren't in their short-term plans right now,” he said, “but when it does arrive, they'll be sensational.”

Editor/Jeffrey