SpaceX IPO hype pulls retail cash away from chip stocks

Retail traders are cutting exposure to AI and chip stocks as SpaceX’s long awaited IPO approaches, according to a Bloomberg report citing Vanda Research data.

The selling has hit some of the market’s favorite semiconductor names, with individual traders trimming positions in chipmakers and recent AI winners instead of buying the dip. Vanda data showed retail traders sold individual stocks for three straight days through Wednesday, the first such stretch since March 2020.

The pullback comes as SpaceX prepares for one of the largest public listings ever. The company is reportedly seeking to raise about $75 billion at a valuation of roughly $1.75 trillion to $1.8 trillion, putting Elon Musk’s rocket and satellite company in the same market cap range as some of the world’s largest technology firms.

Retail demand has already become a major part of the story. SpaceX’s IPO has reportedly drawn more than $70 billion in retail orders, with individual buyers expected to receive at least 20% of the shares. Earlier reports said the allocation could reach as much as 30%, an unusually large share for a major listing.

That demand may be forcing traders to free up cash elsewhere. Bloomberg cited Vanda analysts who said retail may be saving dry powder for the upcoming IPO, while BNP Paribas pointed to the drop in Micron as a possible sign of selling in recent winners to make room for SpaceX.

Micron, Qualcomm, Broadcom, AMD, and Super Micro were among the stocks under pressure this week as the rotation hit AI linked names. The move also comes after a huge rally in chip stocks, leaving retail traders with profits to take before a new mega listing hits the market.

The broader risk is that SpaceX does not arrive alone. OpenAI and Anthropic are also expected to test public markets, raising the possibility that retail demand for new AI and space listings pulls more capital away from existing public tech stocks.