Retail investors are liquidating some of the biggest winners in the AI trade to raise cash for Friday’s SpaceX (SPCX) IPO, and the selling pressure is landing hardest on semiconductors.
- MU stock is moving. See the chart and price action here.
Data from Vanda Research shows individual investors net sold equities for three consecutive days through Wednesday — the first such stretch since March 2020, according to CNBC.
On Monday alone, retail pulled the most capital from individual stocks since November 2023, per Vanda’s figures, with the selling concentrated in chip names and AI-adjacent stocks.
Chip Stocks
Micron Technology, Inc. (NASDAQ:MU) is the poster child. BNP Paribas cited $6.5 billion in net retail inflows into MU over the past month, helping propel the stock up 87% during that window.
However, Micron shares remain nearly 16% off their 52-week high of $1,089.29 as the recent selling has taken a toll.
Greg Boutle of BNP Paribas said Micron's decline directly reflects retail “selling off recent winners and leveraged products” to fund SpaceX allocations.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is also in the crossfire, sitting at $468.33, up 3.52% Thursday, but still roughly 14% below its yearly peak.
Broadcom Inc. (NASDAQ:AVGO) is trading at $376.47 and Apple Inc. (NASDAQ:AAPL) at $291.91, both staging modest recoveries Thursday after being hit earlier this week.
The iShares SOX Semiconductor Sector Index Fund (NASDAQ:SOXX) traded down four out of the last five days, according to Benzinga Pro data.
Liquidity Event
BNP Paribas warned clients that the SpaceX liquidity event could be unlike anything the AI rally has weathered.
The bank estimates retail plus passive flows into SpaceX could reach $50 billion, and retail investors — who rarely hold idle cash — will have to sell what they own.
Retail's holdings are heavily concentrated in chip stocks and leveraged Nasdaq products. U.S. equity leveraged ETF assets recently hit a record $175 billion, with most parked in NASDAQ-100 and semiconductor plays, per BNP Paribas.
When retail redeems those funds, the underlying derivative positions unwind and amplify selling pressure on the stocks themselves.
SPCX Begins Trading Friday
SpaceX’s IPO is priced at $135 per share at a roughly $1.75 trillion valuation, with $75 billion to be raised Friday — which would make it the largest IPO in recorded history.
According to Bloomberg, more than $70 billion in retail orders alone have poured in. SpaceX has reserved at least 20% of shares for individual investors, an unusually large retail carve-out.
Viraj Patel, global macro strategist at Vanda, framed the dynamic plainly: “The question is not whether retail will buy into the SpaceX deal, but whether they do so by establishing new positions or by more aggressively selling recent chip winners.”
The recent tech sell-off has already given markets a preview of the answer.
Photo: Joshua Gesterkamp / Shutterstock
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