The long-awaited SpaceX IPO next week positions the company at roughly $2 trillion in market value. On CNBC’s Morning Call Sheet on Friday, June 5, Adam Kobeissi, Editor in Chief of The Kobeissi Letter, strategist Matt Powers, and Senior Economist Jose Torres argued the deeper story is a rotation out of AI semiconductor leaders into a broader set of blue chips.
The SPDR Dow Jones Industrial Average ETF Trust (NYSEARCA:DIA) sits near record territory, up 14.3% since March 30. The S&P 500 has rallied 21% since March 30th, and the VIX has fallen to 15.40. Participation is broadening as the AI trade pauses.
Where the Money Comes From
Powers framed the mechanical link between the upcoming SpaceX IPO and the rotation: “The question isn’t demand. It’s where is this money coming from. Institutions they don’t have unlimited capital. They’ve got to sell something else to do this. The most obvious source of liquidity could be the same AI infrastructure, you know, in semiconductor names that have already had these massive runs.”
That points to the year’s leaders. NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) has gained 32.54% since March 30. Broadcom (NASDAQ:AVGO) is up 42.77% over the same window, and Marvell Technology (NASDAQ:MRVL) has surged 260.53%. Those are the most liquid pools institutions can tap to fund IPO allocations. Strategists suggested that resulting volatility could produce roughly 5-10% drawdowns, which they view as buying opportunities rather than a fundamental break.
A Rotation, Not a Breakdown
Torres tied the rotation to a sturdy labor backdrop. “I think we’re going to get a modest beat on jobs that’s not going to lift interest rates too much, and it’s going to allow for a continuation in the broadening that we saw yesterday… with the DOW at a record high. Even though the AI trade has been waning,” he said, citing JOLTS (Job Openings and Labor Turnover Survey) at a 23-month high.
May nonfarm payrolls came in at 159,001, the highest level in the series, the unemployment rate held at 4.3%, and initial jobless claims at 225K remain in the healthy zone.
Nvidia at Market Multiple?
Kobeissi pushed back on the idea that semiconductors are stretched. “The S&P is up 21% since March 30th. Nvidia is trading at 23, 24 times forward earnings. The S&P 500 is at 22 times. So Nvidia is almost in line with the average S&P 500 stock from a forward earnings basis. That’s pretty cheap in my view. This year, even we’ll see the S&P above 8000,” he said.
Recent earnings reports reinforce his point. NVIDIA’s Q1 FY2027 revenue hit $81.61 billion, up 85.2% year-over-year, with Data Center revenue of $75.25 billion. Broadcom posted Q2 AI semiconductor revenue of $10.80 billion, up 143% year-over-year, and guided Q3 AI revenue to $16.0 billion. Marvell guided Q2 revenue to $2.70 billion, representing 35% year-over-year growth. Fundamentals remain intact as shares digest the rotation.
SpaceX Forecasts vs. Today’s Numbers
Kobeissi cited a Goldman Sachs note projecting that SpaceX’s revenue could 100x by 2030, with Starlink alone generating over $100 billion in annual revenue. “With any Elon Musk company, the sky really is the limit. Basically, every pullback on any Elon Musk company has been a buy in the long run,” he added.
SpaceX’s S-1 provides the anchor. SpaceX total revenue was about $18.7 billion in 2025, with Connectivity revenue of $11,387 million for the year. Starlink reached roughly 10.3 million subscribers with ARPU at $66 per month as of Q1 2026. SpaceX sizes its connectivity TAM at $1.6 trillion.
What Investors Should Watch
The key question is where demand for the SpaceX IPO will come from. Strategists expect some volatility as institutions free up capital for the IPO, potentially creating pullbacks in AI infrastructure leaders. If money rotates into blue chips, financials, and other sectors while the broader market remains strong, that would suggest the rally is broadening rather than weakening. For investors, the rotation may be the more important story than the IPO itself.
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