Retail investors are increasing exposure to space stocks while selling semiconductor shares, raising concerns over liquidity for upcoming mega-IPOs.
Retail traders have intensified selling in semiconductor stocks, reaching the highest level since November 2023, with Micron (MU) and Sandisk (SNDK) facing particular pressure. Meanwhile, buying activity in space-related stocks has surged to its peak since December 2024, signaling a potential shift in investor focus.
Despite the sell-off, some chip stocks like Broadcom (AVGO) and Marvell (MRVL) continue to attract retail buying, suggesting a selective rather than broad exit from the sector. The Philadelphia Semiconductor Index (^SOX) reflected this volatility, dropping nearly 9% intraday before paring losses to close down 1.9%.
The trend raises concerns that upcoming mega-IPOs, including SpaceX (SPCX), OpenAI (OPAI.PVT), and Anthropic (ANTH.PVT), could divert capital from existing trades. Large tech firms are also raising equity to fund AI infrastructure, with Alphabet (GOOG, GOOGL) planning an $80 billion stock sale to support its build-out.