Tech Weekly: SpaceX IPO Helps Lift Indexes After Early Week Rout

This week's tech sector performance

The tech sector was volatile early in the week, with dip buyers emerging on Monday (June 8) after last week’s tech rout. On Tuesday (June 9), another sharp tech selloff ensued, with some artificial intelligence (AI) stocks posting double-digit losses leading up to SpaceX’s (NASDAQ:SPCX) end-of-week initial public offering (IPO).

On Wednesday (June 10), renewed US-Iran air attacks and hot US inflation data drove tech stocks sharply lower, sending the S&P 500 (INDEXSP:.INX) and Nasdaq Composite (INDEXNASDAQ:.IXIC) into the red by the closing bell.

Futures trading on Wall Street and the TSX were in positive territory on Thursday morning (June 11), leading to a market rally after US President Donald Trump called off a threat to bomb Iran.

This week’s tech market selloff may have reflected attempts to raise cash for Friday’s (June 12) highly anticipated SpaceX IPO, which rippled through broader markets. SpaceX shares opened at US$150, up from the US$135 offer price, and rose to nearly US$170, giving the company an implied valuation of over US$2 trillion.

The offering, which raised about US$75 billion through the sale of 555.6 million shares, was heavily oversubscribed, with demand amplified by strong retail participation and expectations of rapid index inclusion. Shares of ⁠other space-related stocks eased after seeing significant price increases leading up to SpaceX's debut.

Additionally, Iran officials said that an Islamabad memorandum of understanding has “never been closer,” lending credibility to similar comments made by Trump earlier in the week. Markets have whipsawed in recent weeks on conflicting reports on progress from both sides.

Ultimately, the Nasdaq finished the day marginally higher at 25,888.84, but down 0.67 percent for the week.

3 tech stocks moving markets this week

This week's top tech stock movers, according to TradingView data, were:

1. KLA (NASDAQ:KLAC)

Equipment manufacturer KLA saw its share price rise 24.59 percent this week.

2. Applied Materials (NASDAQ:AMAT)

Applied Materials saw an 18.25 percent improvement.

3. Sandisk (NASDAQ:SNDK)

Sandisk saw a gain of 17.94 percent.

Top tech news of the week

• Google (NASDAQ:GOOGL) and NVIDIA (NASDAQ:NVDA) will reportedly source manufacturing services for their most advanced chips from Intel (NASDAQ:INTC) after Taiwan Semiconductor Manufacturing Company (NYSE:TSM) said last week that it is expecting capacity constraints. Shares of Intel were higher this week after Bank of America (NYSE:BAC) upgraded the company from an "underperform" rating to "buy," citing the opportunity for its CPUs.

• At its annual Worldwide Developers Conference on Monday, Apple (NASDAQ:AAPL) unveiled a new operating system for its mobile devices, as well as the long-awaited, improved Siri, developed collaboratively with Google. The new Siri AI features will require the iPhone 15 Pro or later. Additionally, Siri will not be available to customers in the EU due to its failure to adhere to the bloc’s Digital Markets Act. The company requested an 18 month exemption, which the bloc denied.

• Italian holding company Bending Spoons, which acquires and revitalizes tech brands, filed for a US IPO on Monday and is seeking a US$20 billion valuation.

• Database management software provider Databricks will reportedly launch a funding round in the coming weeks, seeking a valuation between US$165 billion and US$175 billion. This is according to multiple sources for the Information. Last year, the company was valued at US$134 billion.

• Amazon (NASDAQ:AMZN) signed an agreement with Corning (NYSE:GLW) to secure supply of optical fiber specifically for its data center operations.

• OpenAI has confidentially filed for an IPO, a move it announced to preempt potential leaks. While the company has not finalized the timing, CEO Sam Altman told employees he expects the firm to go public within the next year, noting that filing now provides optionality.

• General Motors (NYSE:GM) said it will deploy its battery engineering teams and R&D labs to develop giant, stationary battery packs using both new chemistries and old EV batteries. They will provide energy for the power grid and support the AI data center buildout.

• Through a partnership with OpenAI, Visa (NYSE:V) intends to enable AI assistants to perform actual credit card transactions on behalf of users.

• Shares of ERock (NYSE:EROC), a distributed power systems company, fell 12.8 percent on the firm's first day of trading on Wednesday following a US$600 million IPO.

• Oracle's (NYSE:ORCL) share price fell after the company reported negative free cashflow due to heavy capital spending on AI data centers outpacing revenue growth.

• Austin-based maritime defense firm Saronic Technologies has formally finalized a US$1.75 billion Series D round, bringing the company’s valuation to US$9.25 billion.

• Having addressed prior safety restrictions, Anthropic released Fable 5, its most sophisticated general-purpose AI model yet, to the public. Goldman Sachs (NYSE:GS)

• The global value of private equity technology deals fell 70 percent to US$20 billion in the first quarter of this year, according to Bain & Company’s Private Equity Midyear Report.

• Amazon is offering C$14 billion in maple bonds with maturities of three to 30 years. The transaction is led by Royal Bank of Canada (TSX:RY,NYSE:RY), Toronto-Dominion Bank (TSX:TD,NYSE:TD), the Bank of Nova Scotia (TSX:BNS,NYSE:BNS) and JPMorgan Chase (NYSE:JPM).

• Broadcom (NASDAQ:AVGO) is launching a new platform backed by Apollo Global Management (NYSE:APO) and Blackstone (NYSE:BX) to help finance more than 20 gigawatts of AI data centers through 2028, including projects tied to Anthropic and OpenAI, using its own chips.

• Leverage Shares by Themes is launching the Leverage Shares 2X Long SpaceX Daily ETF (NYSE:SPCH), a 2x daily leveraged SpaceX exchange-traded fund (ETF), and the Leverage Shares 2X Short SpaceX Daily ETF (NYSE:SSPC), a 2x short, on June 15, the first trading day following SpaceX’s IPO. Both will provide retail investors with a way to take leveraged positions, long or short, on SpaceX and the space economy.

Tech ETF performance

Tech ETFs track baskets of major tech stocks, meaning their performance helps investors gauge the overall performance of the niches they cover.

This week, the iShares Semiconductor ETF (NASDAQ:SOXX) advanced by 4.77 percent, while the Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ) gained 3.85 percent.

The VanEck Semiconductor ETF (NASDAQ:SMH) gained 4.11 percent.

Tech news to watch next week

Looking ahead to next week, broader market sentiment will be dictated by the US Federal Reserve meeting and the accompanying summary of economic projections on June 17, which will offer critical signals on trajectory of interest rates. This will be followed by Fed Chair Kevin Warsh’s first press briefing. Investors will be looking for insights into the central bank’s stance on inflation and economic growth.

Additionally, the G7 Summit in France may introduce volatility as global leaders discuss international policy and cooperation, potentially impacting tech firms with significant global exposure.

US markets will be closed on June 19 for Juneteenth.