Stocks to buy

If you find yourself seeking intriguing investment prospects in 2023, these are the best upcoming IPOs to watch.

Exploring some of the expected IPOs launching this year could be worthwhile. Considering the demanding economic landscape and stock market fluctuations, companies with promising fundamentals and growth prospects could yield substantial returns once the macroeconomic environment stabilizes.

Several businesses starting an IPO in 2023 might be undervalued because of investors prioritizing value over growth.

You may secure some bargains before they skyrocket. Naturally, investing in IPOs carries its own set of risks. It is common for companies in the IPO process to not yet be profitable, potentially affecting their current stock market valuations. 

However, as the economy turns a corner, these are the IPOs to watch for long term success.

In this article, I will discuss three IPOs to watch this year. If you are open to embracing some well-considered risks and showing patience, these companies have the potential to provide impressive long-term returns.

Reddit

Source: Ink Drop / Shutterstock

Reddit is one of the fastest-growing social media platforms right now. It is the fifth-most visited website in the U.S., ahead of Amazon (NASDAQ:AMZN), Twitter, Wikipedia, and Yahoo. 

Reddit has a very loyal user base due to how the platform is designed. There are thousands of subreddits on the platform, which could be compared to Facebook groups but with much more privacy. 

While Facebook is more oriented toward real-life and family interactions, Reddit allows users to explore and learn more about their hobbies. Say, if an individual is interested in aviation, music, and photography, they can join related subreddits and interact with similar-minded people.

Users can also create accounts without using their real names and explore the subreddits they are interested in. This caters well to the privacy-hungry younger population, which is why I believe Reddit’s growth story is only beginning.

Theres no date for this IPO to watch just yet, but it is widely expected that Reddit could go public in the second half of this year, with a valuation of up to $10 billion. It has already raised $1.3 billion in funding so far.

Discord

Source: Sergei Elagin / Shutterstock

If you’ve read the news about the Pentagon leaks recently, you’ve likely heard of Discord. Discord started off as a game feature to let gamers communicate with each other. 

However, as time went on, the app has propelled into becoming the most widely used platform for communication, particularly among Gen Z individuals. 

Much like Reddit, individuals can join Discord channels for anything they may be interested in. But what makes Discord unique is that it allows video calls, voice calls, chatting and even streaming on the platform. Each channel is like having multiple Skype or Telegram groups all in one place.

With so many communication tools, it is becoming the go-to place for younger people to stay in contact with their friend group. 

Discord’s young user base is also tech-savvy, which makes them an attractive demographic for advertisers and partners. 

It has multiple sources of revenue and partnerships with game developers, publishers, and streamers.

There’s no IPO date yet for Discord, but the valuation here could be up to $15 billion if it goes public this year. It has raised nearly $1 billion in funding.

Stripe

Source: Wright Studio / Shutterstock.com

Stripe is a fintech company that specializes in payment-processing software for e-commerce companies. 

A growing number of online businesses are using the company’s software to receive payments on their online products as it is substantially cheaper than alternatives like Paypal (NASDAQ:PYPL) and offers much more flexibility.

Furthermore, Stripe also comes with a suite of other software that makes it easy for an online vendor to make sales. This includes Stripe Tax, “which lets businesses automatically calculate and collect sales tax, VAT, and GST in over 30 countries and all US states.” 

With so many features in the pipeline, it is easy to see why Stripe is quickly becoming the go-to payment-processing platform. 

An IPO is certainly on the horizon, as it has an estimated value of $55 billion. It has also raised $8.7 billion in funding.

On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks. You can follow him on LinkedIn.

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