The sell-off hit some of the largest companies tied to artificial intelligence spending, cloud infrastructure and data-centre expansion. Alphabet fell about 2.5 per cent, Microsoft lost nearly 2.7 per cent, Meta slipped close to 1.9 per cent and Oracle dropped more than 11 per cent in intraday trading. The moves weighed on the technology complex and added to a more cautious tone across large-cap growth shares, even as the broader market showed mixed direction.
Traders linked part of the weakness to concerns that SpaceX’s expected initial public offering could absorb capital from existing AI favourites. The rocket, satellite internet and AI infrastructure group is preparing what could become the largest public listing on record, with plans to raise about $75 billion at $135 a share. The proposed deal would value the company at roughly $1.75 trillion, placing it among the world’s most valuable listed companies at debut.
Demand for the offering has intensified across institutional and retail channels. Retail orders have crossed $70 billion, with online brokerages and wealth platforms giving individual investors access to a deal that would normally be dominated by large funds. That has sharpened debate over whether investors are selling liquid technology holdings to make room for SpaceX allocations, particularly after AI-related stocks delivered outsized gains over the past year.
The rotation argument remains contested. Some portfolio managers see the decline as a natural pullback after a powerful rally in AI infrastructure shares, rather than a direct consequence of the SpaceX deal. Others argue that a listing of this size can affect positioning even before trading begins, especially when investors must free cash for a high-profile offering with broad public demand.
Oracle was the sharpest decliner among the four named companies, with investors focusing on the scale of its data-centre build-out and financing needs. The company has been one of the most aggressive beneficiaries of AI cloud demand, but its share price has become more vulnerable to questions over capital expenditure, debt issuance and the timing of returns from large infrastructure contracts.
Alphabet and Microsoft also faced selling pressure as investors reassessed their AI spending commitments. Both companies are investing heavily in chips, cloud capacity and foundation-model partnerships, while trying to convince shareholders that the spending cycle will translate into durable revenue growth. Meta’s decline reflected similar concerns, with its AI and metaverse-related capital plans drawing close scrutiny from investors worried about margin compression.
SpaceX’s listing is being watched not only as an aerospace milestone but as a new test of the public market’s appetite for mega-cap technology stories. Its Starlink satellite internet business has become the main commercial engine, while its launch operations remain central to government, defence and private-sector space activity. The company’s long-term pitch also extends into AI infrastructure, with ambitions tied to satellite networks, data transmission and future space-based computing capacity.
That narrative overlaps with the investment case already priced into major AI-linked equities. For much of the AI boom, investors seeking exposure to generative AI and cloud computing had few public-market options beyond the largest technology platforms, semiconductor companies and infrastructure suppliers. A successful SpaceX debut could widen the field and dilute the scarcity premium enjoyed by those companies.
Valuation is the central risk. At a proposed value of about $1.75 trillion, SpaceX would enter the market at a level normally associated with mature global technology leaders, not companies still investing heavily in future platforms. Strong revenue growth, launch dominance and Starlink’s subscriber expansion support the bullish case, but heavy capital requirements and ambitious AI-related plans leave little room for execution setbacks.
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