Hedge Funds Trim Alphabet Stake, ETF Slides 2.4% Ahead of $1.77 Trillion SpaceX IPO
Hedge funds reduced holdings in the Magnificent Seven, including Alphabet, driving the related ETF down over 2.4% since June 5 ahead of SpaceX's planned $1.77 trillion IPO. Analysis during that period shows software names were heavily sold while semiconductor makers saw strong demand.
1. Hedge Funds Trim Tech Stakes
In the week to June 5, hedge funds significantly reduced their positions in the Magnificent Seven group – Nvidia, Apple, Amazon, Alphabet, Meta, Tesla and Microsoft – causing the related ETF to plunge over 2.4%.
2. Sector Rotation Benefits Semiconductors
Funds shifted away from software names while driving strong demand for semiconductor makers; traditional financial ETFs saw the most inflows despite the financial and insurance sectors remaining net sold year to date.
3. SpaceX IPO as Catalyst for Rebalancing
Expectations for SpaceX’s record-setting IPO on Friday, with a targeted valuation of $1.77 trillion despite a $4.94 billion net loss in 2025, prompted portfolio rebalancing and drove both tech risk reduction and selective buying across other sectors.
