By Doug Busch

In a generally healthy stock market, a steady flow of high-quality new issues is an encouraging sign, reflecting solid demand from investors. This should continue, with a potential crop of newcomers around the corner.

Still, history reminds us that quality matters more than quantity. A surge in IPOs can sometimes indicate companies are rushing to capitalize on favorable conditions before a potential market pullback.

To gauge sentiment in the IPO space, many turn to the Renaissance IPO ETF, which holds stocks of companies that have recently gone public. Its current uptrend on the daily chart suggests growing enthusiasm from market participants, while technical indicators for some of its component companies are positive as well.

Astera Labs, one of the more compelling IPOs of the past 18 months, is part of the red-hot semiconductor group. It has strong exposure to artificial-intelligence infrastructure with ties to Nvidia.

After a 37% surge during the first week of November, accompanied by its heaviest weekly volume ever, the stock is now challenging those highs. It recently reclaimed the $100 level for the first time in five months.

With strong relative strength last week, gaining 6.5% vs. 1% for the VanEck Semiconductor ETF, momentum is building, and a run toward $150 by year-end looks increasingly possible. The stock was up about 20% on Monday at just short of $123, bolstering the positive outlook.

In the software space, SailPoint is an intriguing company that made its debut in February. Like many new issues, it has experienced a volatile start.

Early trading often lacks stability, but SailPoint appears to be finding its footing. It has filled a gap near the $20 level that opened June 10, after the company reported its earnings, as well as breaking out from an inverted head and shoulders pattern.

With technical momentum building, the stock looks positioned for a near-term move toward $25. Shares were down 1.9% at $20.91 on Monday.

ServiceTitan, another software stock, began trading eight months ago and has rallied about 12% to $114.62 so far in 2025. In a technically significant move, it has bounced off support at $100 in early June, a level that offered resistance in February, March, and April.

With momentum building, it appears to be gravitating toward $130, a level last tested in mid May. As of Monday afternoon, the stock was approaching a double bottom pivot of $116.84.

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July 21, 2025 15:15 ET (19:15 GMT)

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