Small investors are backing out of artificial intelligence stocks ahead of SpaceX's market debut, according to VandaTrack. The firm said that retail traders have dumped stocks including Micron , Advanced Micro Devices and Marvell Technology . Retail investors have net purchased the lowest amount of single stocks in the past three days since March 2020, according to Vanda. "We're already seeing signs that retail investors are rotating out of recent AI [favorites] ahead of the IPO wave," Vanda told clients in a Wednesday note. MU AMD,MRVL 5D mountain Micron, AMD and Marvell in the past five trading days The firm said individual investors may be shoring up cash ahead of Friday's expected debut for SpaceX , as well as for the potential public offerings of Anthropic and OpenAI down the road. Anthropic and OpenAI both confidentially filed for IPOs this month. Concerns that AI expenditure growth is hitting a peak could also be encouraging retail traders to pull back on the trade, according to Vanda. Vanda said its positioning indicator for U.S. equities has exited crowded territory. The firm described the recent unwinding of positioning as one of the sharpest seen in the last 15 years. "The question we're now asking is whether the upcoming IPO cycle triggers another leg of deleveraging," Vanda wrote. Retail traders have been buzzing about SpaceX in recent days. The company's planned ticker "SPCX" has been one of the most-mentioned on the WallStreetBets Reddit forum recently, according to data from Breakout Point. Retail traders aren't alone, Vanda said. Institutional investors have also indicated "fatigue" with long AI plays such as semiconductor stocks, the firm found. "Given how crowded this trade had become, it hasn't taken much to trigger profit-taking," Vanda's team wrote.
<small>Source: CNBC</small>
