2 September IPOs That Can Hit the Ground Running

Despite the stock market’s incredible September surge, IPO season has been relatively tame, at least compared to the first half. Undoubtedly, it may come as a bit of a surprise to some to witness StubHub (NYSE:STUB) dropping immediately out of the gate, especially when you consider the secular trends surrounding live experiences. Either way, I think the initial disappointment could set the stage for a shining buying opportunity at some point down the road.

In any case, we’ll look at some September IPOs that I think can keep up their impressive pace as they hit the ground running. As always, the IPO scene tends to boom and bust quite quickly, so extreme volatility and near-term downside risks are a given. While I’m not the biggest fan of getting a share of an IPO in its first few trading weeks, I do think the new issues are worth monitoring and perhaps even buying with limit orders, given their propensity to fluctuate wildly in both directions.

Either way, here are two September IPOs that I’ll be adding to my watchlist. And if they come in and the initial hype (or disappointment in the case of StubHub), perhaps nibbling on a few shares could make sense.

Pattern Group

Pattern Group (NASDAQ:PTRN) had quite the impressive debut on the public markets, with shares now up close to 20% from their opening day close. While the post-IPO run-up wasn’t explosive, it was fairly healthy, leaving room for upside going into the fourth quarter. Undoubtedly, Pattern may not be the red-hot IPO of the year, but it is very much an AI play that’s worth careful consideration. With just a mild premium to the IPO price, I find Pattern is a name that investors might be able to get behind if they’re a fan of the business and its plans to bolster its AI capabilities now that it has some public capital.

The Utah-based company, which refers to itself as the world’s largest e-commerce accelerator, can also be viewed as a retail-as-a-service provider. Undoubtedly, AI plays a major role in the growth story moving forward. Undoubtedly, there’s a lot of data-driven decision-making that needs to go on behind the scenes of a digital storefront. And as a fast adopter of AI tech, I do think there are numerous scenarios that could see Pattern enjoy impressive growth numbers in its first few quarters as a publicly-listed company.

For investors seeking a mid-cap ($2.4 billion market cap) e-commerce-flavored AI play, PTRN stock could fit the bill. For now, though, I’m sitting on the sidelines until there are a few quarters in the books. The stock may have significant upside potential, but it remains a bit too speculative for my liking.

Netskope

Netskope (NASDAQ:NTSK) is another September IPO winner that I think has room to run all the way into year’s end. The cloud cybersecurity company behind its flagship Neskope One product is a terrific mid-cap way to play the booming cybersecurity landscape. Like Pattern, AI plays a massive role in the firm’s product. And while it’s too soon to tell if Netskope can be a little-known IPO disruptor, I do think it’s a name to add to a watchlist.

Undoubtedly, the cybersecurity scene is fiercely competitive, especially as the much larger, established players on the scene leverage AI to fight AI cybersecurity threats. Still, if Netskope’s AI-first approach can keep it at the forefront, I do think there’s an opportunity to take a significant share. Now that it’s raised considerable capital, I expect Netskope will be able to attract more AI talent and bring the fight to rivals as well as the increasingly dangerous AI-equipped cyberthreats.

Personally, I view Netskope as the September IPO to go with, given the more defensive nature of cybersecurity. Good times or bad, you’ll need effective digital defenses.