The 2026 IPO supercycle is real, but it only exists if Iran stays calm

The 2026 IPO supercycle is real, but it only exists if Iran stays calm The 2026 IPO supercycle is real, but it only exists if Iran stays calm Austen July 2, 2026 • 6 min read × Too busy to read? Listen here 0:00 0:00 Early 2026 Iran tensions already forced Goldman Sachs to pump the brakes on IPO activity, yet both lead banks are doubling down on forecasts that assume momentum can be "regained" without explaining what happens if it gets interrupted again. The banks are betting big, but the fine print matters Goldman Sachs just posted $535 million in Q1 2026 equity capital markets revenue despite what Bloomberg tactfully called conditions where "the war in Iran weighed on IPO activity" [6] . Morgan Stanley isn't far behind. Both banks are now telling clients that 2026 could exceed the 2021 IPO record, anchored by mega-deals like Anthropic and OpenAI [5] . Ted Pick, Morgan Stanley's CEO, frames it as conditional optimism: "The pipeline for IPOs and M&A deals will become active once again if the market can regain momentum from the start of 2026" [4] . That "if" is doing a lot of work. The same geopolitical shock that already disrupted deal flow this year is still simmering. Goldman and Morgan Stanley are essentially betting that lightning won't strike twice, that whatever spooked institutional investors in January won't repeat itself before Anthropic's targeted October 2026 launch [2] . Maybe that's confidence. Maybe it's wishful thinking dressed up as market forecasting. Appetite has returned, but conviction hasn't shown up yet Here's the gap nobody's talking about loudly enough. Goldman's own bankers admit that "deal appetite has returned, but it is still being tested by how much conviction investors will bring to marquee offerings" [7] . Appetite and conviction are not the same thing. Appetite means investors are taking meetings and reading pitch decks. Conviction means they're writing checks at the valuations banks are projecting. The Anthropic IPO is the test case. Goldman, Morgan Stanley, and JPMorgan are all co-leads on a deal targeting over $7 billion in combined value with OpenAI [1] . But here's what makes me skeptical: Anthropic's revenue accounting methodology is still under SEC review [2] . The offering remains "subject to market conditions." That's not bank speak for "we're confident." That's the escape hatch language you include when you're not entirely sure this thing clears regulatory hurdles or finds buyers at the price you want. The soft dollar game is revealing something uncomfortable Fortune reported something fascinating: institutional investors are hedging their bets by sending commission business to both Goldman and Morgan Stanley to guarantee IPO allocation regardless of which bank ultimately wins lead role on OpenAI or Anthropic [1] . Think about what that means. These aren't investors demonstrating conviction in the deals themselves. They're demonstrating conviction that whoever wins will have pricing power, and they want a seat at the table. This creates artificial revenue for both banks even if one loses the mandate. It also masks whether there's genuine institutional demand or just FOMO-driven placement jockeying. When mutual funds are paying for optionality rather than betting on specific outcomes, that tells you the market isn't as confident as the league tables suggest. Private equity wants out, which could be a problem Morgan Stanley cited private equity exit pressure as one driver of the IPO supercycle [4] . That's true but incomplete. PE firms have been sitting on AI company positions for years, and their LPs are getting impatient. Forced selling isn't the same as organic demand meeting visionary supply. It's liquidation with better marketing. If PE-backed AI companies flood the market simultaneously because funds need to return capital, you get supply overwhelming demand. Goldman's bullish forecast assumes these exits happen in an orderly fashion, spread across quarters, with enough institutional appetite to absorb each wave. That's optimistic. The alternative is a repricing event where later deals get crammed down because early ones sucked up available capital. What actually kills this supercycle? Nobody's publishing the bear case clearly. Let me try. The supercycle dies if any of these happen: Iran tensions escalate again and markets seize up for more than a few weeks. The SEC pushes back hard on AI company revenue recognition standards and forces Anthropic or OpenAI to restate projections. Institutional investors balk at valuations on the first mega-deal and repricing cascades through the pipeline. Or a broader macro shock, completely unrelated to IPOs, spooks risk appetite and everyone pulls back simultaneously. Goldman and Morgan Stanley are betting none of those happen. Maybe they're right. But their forecasts conditioning success on "regaining momentum" and "market stabilization" acknowledge fragility even while projecting confidence. The supercycle is real in the sense that the pipeline exists and banks are positioning aggressively. It only becomes real in the sense of actual closed deals if geopolitics cooperates, regulators stay accommodating, and investors decide AI unicorn valuations justify 2021-level enthusiasm. I think we get some version of the supercycle, but smaller and messier than Goldman's projections. A few mega-deals close, some get delayed, and the total dollar value falls short of the hype. That's still a strong year for investment banking, just not the record-breaking victory lap the headlines are selling. The real question is whether the banks are managing expectations or actually believe their own pitch decks. Sources [1] A $7 billion horse race: Goldman Sachs and Morgan Stanley battle to lead OpenAI and Anthropic IPOs [2] Anthropic IPO Picks Goldman Sachs, Morgan Stanley, JPMorgan: Revenue Accounting Question Looms [4] Goldman Sachs and Morgan Stanley Turn Bullish: Iran Tensions Can't Stop Market Recovery [5] SpaceX Kicked Off What Looks Like a Historic Year for IPOs [6] Goldman, Morgan Stanley Predict IPO Resilience as Revenue Climbs [7] Goldman sees strong 2026 M&A, retail-heavy IPOs ahead Austen View more posts → Published with Austen — goausten.ai