Michael Monahan of ETS Partner says SpaceX’s first-day trading did not damage the AI trade; instead, he views the IPO as part of a broader capex wave that still favors compute, semis, and related names. He also argues the recent AI/software selloff was mostly positioning and risk management, not a fundamental break in the theme.
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This is a short Yahoo Finance interview with Michael Monahan, a founder and portfolio manager at ETS Partner, reacting to SpaceX’s first day of trading and the broader market response. His core view is that SpaceX’s IPO was constructive rather than destructive for the AI trade: the deal was well-managed, the shares opened with a strong pop, and the process brought in “real buyers” rather than just flippers. He frames Goldman Sachs’ IPO execution as especially effective, saying they “earned their money today.” Monahan argues that worries about SpaceX sucking capital away from AI are overstated. …
Tactically, the setup is constructive for AI infrastructure names if the SpaceX IPO does not trigger broader risk-off flow; the immediate danger is traders overreacting to rates and recent positioning rather than fundamentals.
Over the next few months, the base case is a continued rotation inside the AI complex, with winners tied to compute scarcity, capex, and embedded enterprise software. The thesis weakens if spending slows or valuations compress faster than earnings can catch up.
The longer-run view is that a secular AI capex regime is still intact, but the market will increasingly differentiate between durable platforms and cyclical component suppliers. Software and infrastructure can remain winners, while commodity-like semis stay more cyclical than narrative-driven investors may assume.
SpaceX’s first day of trading was handled well and helped keep flippers from dominating the allocation.
He says the matching process was masterful and brought in real buyers at a decent price.
The recent selloff in AI and semis was more about positioning and risk management than true fundamental selling.
He attributes the move to large pod shops and multi-strats unwinding after a hot jobs report.
Capital is still flowing into the AI capex cycle, so the SpaceX IPO is not necessarily crowding out AI names.
He cites major capital raises and continued spending as supportive for the theme.
What were your first thoughts on SpaceX's first day of trading?
He said the trading looked like a masterful deal by Goldman Sachs, with a 20% pop and a process that favored real buyers over flippers. He and his team bought on the open and felt they participated in the upside at a decent price.
Are you concerned that SpaceX and other IPOs will drain too much money from the market?
He said he does not focus on short-term flows because his approach is long term. He argued the recent selloff was more about risk management and coordinated de-risking by large multi-strategy shops than about heavy selling, and he noted they bought several names that day.
How much do interest rates matter in your models?
He said rates are too short term for their process and that they are not particularly rate sensitive. He added that some high-growth names implicitly reflect rates in terminal multiples, and he expects a 'phantom rate cut' rather than an actual hike.
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