Wall Street banks racked up $650 million in fees and stock gains in the busiest IPO week since 2004

From Krispy Kreme to China’s Didi Chuxing, the busiest week for U.S. IPOs in 17 years produced a windfall for Wall Street’s top investment banks.

A cybersecurity company, drug developers and a Turkish e-commerce platform were all in on the action. At least 14 companies raised $100 million or more in offerings on the Nasdaq and New York Stock Exchange, the most active stretch for debuts since 2004.

In total, underwriters generated close to $400 million in fees for assisting with the IPOs. They’re sitting on an additional $259 million in paper gains as of Friday’s close, assuming they exercise their options to purchase all of their allotted shares at the IPO discount.

The pace of offerings underscores the demand for growth and shows that IPOs remain the preferred route to the market despite the rise of direct listings, which have no underwriters and come with much lower advisory fees. It’s a highly lucrative business for Wall Street, and there’s no slowdown in sight.

Robinhood filed its IPO prospectus on Thursday and is poised to be one of the biggest offerings of the year. Surging demand for crypto assets led to a quadrupling in first-quarter revenue to $522 million, while the company’s loss swelled to $1.4 billion in part because of an emergency fundraise tied to GameStop trading mania.

The stock trading app will likely command a premium valuation on the market, while simultaneously playing a broader role in the IPO boom by giving retail investors a way to invest in deals that historically targeted big institutions. Robinhood is reserving up to 35% of its IPO shares for customers.

“I think this is going to be one of the greatest meme stocks of the future,” Thomas Peterffy, chairman of Interactive Brokers, told CNBC’s “Squawk Box” on Friday. “They have negative equity, they have roughly zero earnings and they’re growing fast. So it’s the kind of thing the market seems to like lately. I’m looking forward to them coming into the community, bringing more and more people into the market.”

In the past week’s IPOs, underwriting fees ranged from 2% of the total amount raised, in the case of ride-hailing company Didi’s massive financing, to 7% for smaller deals like the offerings from health companies CVRx, Aerovate Therapeutics and Acumen Pharmaceuticals.

Goldman Sachs and Morgan Stanley, as usual, reeled in the highest fee revenue by serving as the lead managers for the IPOs of Didi and cybersecurity software vendor SentinelOne, the two biggest offerings of the week.

Morgan Stanley and JPMorgan Chase were the lead underwriters in the IPO for Turkish online shopping company D-Market Electronic Service & Trading, legal services site LegalZoom and Krispy Kreme, which were the week’s third-, fourth- and fifth-biggest offerings, respectively.

In addition to advisory fees, underwriters also make money on IPOs by getting the option to buy stock at the offer price so they can benefit from the pop that typically ensues. Not all of last week’s offerings had big initial rallies, but they all led to gains for the banks that were in position to receive an allocation.

Even with Didi’s muted gains in its first three days of trading, the stock’s 11% rise means that underwriters are up $66 million if they exercise their options. The paper gains on SentinelOne sit at $46 million after that stock jumped 27%. Manufacturing marketplace Xometry climbed 58% in three days, producing potential gains thus far of $26 million, while airport security company CLEAR has delivered an increase of $34 million after jumping 53%.

For Morgan Stanley and JPMorgan, the record IPO stretch comes a week after the two banks were the leads on the IPOs for health-tech company Doximity and cloud software vendor Confluent.

Those two offerings paid combined underwriter fees of $74.7 million, and the Doximity deal included stock allocation that’s produced $83 million in gains based on the IPO pop. However, Confluent took the unusual step of not issuing underwriters the option to buy at the IPO price.

The company highlighted the potential significance of that decision in the risk factors section of its prospectus:

“Without this option, the underwriters may choose not to engage in certain transactions that stabilize, maintain, or otherwise affect the market price of our Class A common stock, such as short sales, stabilizing transactions, and purchases to cover positions created by short sales, to the extent they would have engaged in any such transactions had we granted the underwriters such an option,” Confluent said.

Doximity CEO Jeff Tangney told CNBC’s Deirdre Bosa that while an IPO was the right choice for his company, he’s glad to see the rise of direct listings and special purpose acquisition companies (SPACs) as alternatives because the competition is bringing down the costs.

Doximity paid a fee of 5.5% of the offer size, which is about inline with this year’s average but below the top rate of 7%.

“It improved the economics for us,” he said. “Banks are charging less and doing more, which is good.”

WATCH: Doximity CEO on physician social network going public