SpaceX mania, equity issuance, and market rotation (with Matt Miller; Dani Burger)

SpaceX saw record retail volumes. The huge equity issuance (SpaceX lockups, tech debt/equity) is a concern for passive S&P investors. There is a rotation happening under the surface. Likes healthcare as a beneficiary of broader AI application layer. Stablecoin adoption is a key theme.

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Stephanie Guild 6.0

SpaceX mania, equity issuance, and market rotation (with Matt Miller; Dani Burger)

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Tech is issuing debt and equity, which may cap upside. Rotation is happening under the surface. Likes healthcare over broad tech.

SpaceX had a blockbuster debut. What was the week like for you at Robinhood?

Matt Miller
Stephanie Guild

It was a wild week. We had record volumes on Friday. There will be natural demand from index inclusion, but not everyone will sell. The bigger story is that cash cows (tech) are now cash users, issuing tons of debt and now equity.

The four hyperscalers plus Oracle had $360B in debt two years ago, now over $650B and climbing.
There's an ETF targeting 2x daily returns of SpaceX. Does the wealth creation from SpaceX offset some of the issuance?

Dani Burger
Stephanie Guild

On Friday we saw a ton of sales from space-related names like Rocket Lab. There's not an endless supply of buyers. The wealth is on paper, not necessarily cash. It's too early to tell where the money goes.

The hyperscalers will see some capital moving away from them.
JP Morgan expects $1.5 trillion of equity coming back into the market (issuance). Is that a concern?

Matt Miller
Stephanie Guild

It's a concern for people sitting in S&P 500 indices. The biggest contributors to buybacks (tech) are now issuing new equity. There's a rotation happening under the surface, visible in equal-weighted vs cap-weighted VIX.
Do you buy the sectors that have lagged, like financials?

Matt Miller
Stephanie Guild

I like healthcare. It should benefit from the broader AI application layer. Financials are part of it, but the opportunity is more in stablecoin adoption – that's how AI will run on payment rails.

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