Equity issuance notched a record in Q2 across IPOs, secondaries, converts and a smattering of SPACs, ostensibly validating concerns that the US equity market’s undergoing an epochal supply-demand shift that could weigh on prices.
Specifically, US companies raised more than a quarter trillion in equity last quarter, a veritable deluge that easily beat the previous record set in early 2021, when GameStop was front-page news, “stimmy” was the zeitgeist and an until-then-unheard-of outfit called Yuga Labs was gearing up to launch a collection of NFTs that changed lives.
Of the $252 billion raised in the three months through June of 2026, follow-ons accounted for $70 billion. That brought the YTD total to $105 billion, which Goldman’s Ben Snider noted is the most for this point in a calendar year since 2021’s go-go days.
The figures above give you some perspective. The discerning among you will immediately note that although large, the follow-on supply total actually isn’t all that anomalous in a historical context.
As Snider put it, follow-on equity issuance this year “represents a return to normal rather than a boom,” and it’s anyway “concentrated in a few large deals,” Alphabet’s massive offering being the most obvious example.
When you look at the number of follow-ons and adjust Goldman’s total, full-year equity supply estimate (i.e., inclusive of secondaries, IPOs, converts and SPACs) for overall market cap, you discover that for all the hand-wringing about “oversupply,” some key metrics are in fact “tracking below long-term averages,” as Snider observed (emphasis mine).
The figures below drive home the point. On the left, you can see the number of follow-ons is actually quite subdued.
The figure on the right gives you the market cap-adjusted context for Goldman’s 2026 corporate equity supply forecast. Although the bank does in fact expect equity issuance to easily set a record this year at around $700 billion, that’s just ~1% of Russell 3000 market cap, not materially different from the 2015-2019 average, and well below levels observed prior to that.
As to the big question — i.e., will corporate demand still outstrip supply this year even after accounting for blockbuster IPOs and AI-related secondaries? — the answer’s “yes,” according to Goldman, albeit just barely.
Buyback growth’s surprising to the upside this year. Repurchases were up 11% in Q2 versus the same period a year ago, and YTD authorizations of almost $1 trillion count as a record.
The striped bars in the figure above show you gross projected buybacks (grey), issuance (blue) and potential supply from lock-up expirations (green). As long as the navy blue line stays positive, corporates are buying back more shares than they’re issuing. That should remain the case in 2026.
The concern among some market participants is that corporates — the biggest source of US equity demand — will collectively “fail” to repurchase enough shares to offset issuance, putting an end to the perennial float shrinkage that’s buoyed stocks for most of the post-GFC period. That may well come to pass, but the message from the above is that simply citing record overall issuance on the way to proclaiming a dramatic structural shift misses a lot of important nuance.
As Snider put it, “although the supply-demand balance has shifted in an unfavorable direction for equity investors, $1.4 trillion of gross share repurchases across the US public market should outweigh both direct corporate equity issuance and the large potential additional supply from expiring post-IPO lockups, even assuming unrealistically that all unlocked shares are immediately sold.”
