According to a report by Goldman Sachs, US companies raised $105 billion through follow-on equity offerings from the start of the year through July. Total equity issuance — including IPOs, follow-on offerings, convertible bonds and SPACs — reached $252 billion in the second quarter, a record that surpasses the previous high of $234 billion set in Q1 2021.
Goldman strategists caution, however, that both the number of deals and issuance as a share of market capitalization remain below long-term averages. Much of the activity is concentrated in a handful of large transactions, meaning the headline issuance figures do not reflect a broad-based surge in supply.
AI funding a major driver of follow-ons
One of the main drivers of the increase has been financing needs related to investments in artificial intelligence (AI). AI-related financing accounted for about 40 percent of US aftermarket issuance, and Goldman strategists expect this trend to strengthen going forward, potentially prompting further targeted equity offerings.
Strong buyback activity
At the same time, buybacks by companies in the S&P 500 rose: in the second quarter the annualized increase was 11 percent. New buyback authorizations announced year-to-date totaled nearly $1,000 billion, also a record.
Goldman estimates that roughly $1.4 trillion of share repurchases expected this year will offset much of the potential additional supply — including about $700 billion of primary equity issuance and shares that could be freed up as lock-up periods following IPOs expire.
Why this matters
The picture points to a delicate imbalance: large headline issuance figures coexist with concentrated deal activity, while substantial buybacks reduce circulated share float. That dynamic can affect stock prices and market liquidity, especially if AI-related issuance continues to grow.
For market participants, a key question will be whether future issuance broadens across sectors and companies or remains focused on a small number of large transactions tied to specific themes like AI.
