Broadcom's Disappointing AI Outlook Drives Tech-Led Stock Rout

**SPEAKER_1** (0:02)
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This is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead, with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily podcast with Carol Massar and Tim Stenovec on Bloomberg Radio.

**Tim Stenovec** (0:32)
SpaceX has already received orders for more than the shares available, and it's $75 billion IPO. That's according to people familiar with the matter. It puts the company on the verge of setting the record for the biggest ever listing separately just crossing the Bloomberg terminal. Bailey Lipschultz leading this story too. A quiet effort by Morgan Stanley to prevent retail investors from placing multiple orders for shares of SpaceX in the company's massive IPO, is facing pushback from some of the country's largest brokerages. Bailey Lipschultz joins us now. He's holding on the fort in Bloomberg headquarters in New York, the Bloomberg Interactive Brokers Studio.
Bailey, you lead our IPO coverage. We're going to talk about SpaceX and the fantastic reporting that you and the team have done around it. Before we do that though, as we just heard from Charlie, we're seeing a major sell-off today with some of the chip names, really leading the charge lower. Your view on this equity market, especially as tech has been leading the way, giving back some of these historic gains.

**Bailey Lipschultz** (1:30)
I mean, Tim, I go to Italy for about two weeks, and the market's at an all-time high.

**Tim Stenovec** (1:34)
We missed you.

**Bailey Lipschultz** (1:35)
On no news, though, Tim. No news happens. The market goes up, no one bats an eye. We see two days of weakness, and all of a sudden, the sky is falling. Just want to call out the fact that, yes, the Philadelphia Semiconductors Index is down more than 9.5% right now. It's up 74% year to date. If anyone told you that, that would be the case sitting here on June 5th. I think they would take that. NASDAQ 100, of course, down 5% from its all-time high on Tuesday. It does seem like a bit of consternation. I think the big question when I talk to investors is, what's the next move for the Fed? It does seem increasingly that the logical answer has to be a hike, whether that's later this year, whether that's early next year. Obviously, we'll see how the economic data play out. But it does seem like a natural way to take your foot off the gas pedal going into a weekend. Obviously, we're still living in breathing everything that comes from the White House. But the big question at the end of the day is, is this a market that did nothing but go up for a number of weeks, if not months, for no real reason, and what kind of lies ahead? And obviously, there's going to be a big IPO next week. That'll be interesting to track as well.

**Carol Massar** (2:37)
You know, having said that, Bailey, I do feel like this is a moment in time where there's just such a FOMO trade, especially when it comes to AI and tech and even some of these IPOs, which we're going to dig into in just a moment. We talked with John Flood over at Goldman Sachs earlier. You know, and he tracks hedge funds and institutional investors and did talk about the hedging that these folks are doing so that they're not all in on everything.
Do we see any of that? Do we see a rise in short positioning at all? Do we see anything that kind of says, all right, people are enthusiastic, but they're also playing this smart?

**Bailey Lipschultz** (3:11)
I think there is kind of that sense when you look at some of the data that we see in others track, it does seem like dips are being bought in the sense that some of these memory stocks are being added to. Today, we did see people taking protection over the last few weeks as it relates to some of those higher flyers. But Carol, it still is an interesting market where you do see certain short positions rising but in other pockets of the market, you're still seeing exuberance or even just shades of exuberance as it relates to what the future could hold. So we're seeing a lot continuing to play out. The big thing has been this is a market that when I look back over a few days ago even, I expected to see a sharper pullback and coming into today, you're down 89 points on that NASDAQ.

**Carol Massar** (3:52)
Sorry. Yeah, no, don't be sorry. It's like a lot coming at us. We're looking at, if we look at the chart, kind of a slope down on all these major equity averages, and we are now down about 4.5% or more than 4% on the NASDAQ 100 So we continue to see selling into the close here, Tim.