When SpaceX launched its Initial Public Offering (IPO) in mid-June, the so-called FAB 10 and MANGOS stock baskets that have been taking over Wall Street drew unprecedented amounts of capital.
Roughly $370 million flowed into the space company's stock, with the bulk of that sum rotating out of the Magnificent 7 mega-cap group, according to Vanda Research. During that same period, investors were net sellers of Apple and Tesla and bought only $88 million of Nvidia, added the London-based firm.
SpaceX’s $75 billion debut triggered "the longest streak of retail net selling in the Magnificent 7 since March 2020," with the Roundhill Magnificent Seven ETF falling over 4.73% in the month prior to the world’s biggest IPO, Vanda Research analyst Viraj Patel wrote in a note.
The Vanda-coined FAB 10 (Frontier AI & Big Tech 10) acronym expands on the Magnificent 7 to include Elon Musk’s space exploration and next-gen AI entity as well as conversational AI favorites Anthropic and OpenAI, which are expected to launch their own IPOs in coming months.
Meanwhile, MANGOS has gradually emerged to reflect the latest shift from consumer media and internet services to AI infrastructure and advanced computing. It stands for Meta, Anthropic, Nvidia, Google/Alphabet, OpenAI and SpaceX, seemingly serving as the next iteration of the FAANGs group (Meta, Amazon, Apple, Netflix and Google/Alphabet).
All Eyes on Anthropic, OpenAI
Strategists say the new super-tech cohort is here to stay and may trigger major capital rotations out of the Magnificent 7 and other legacy tech groups in the coming year.
The next shift could come from Anthropic and OpenAI's potential listings, which could arrive in the next six months at $1.13 trillion and $847.96 billion respective valuations. Anthropic’s tentative timeline is October this year. OpenAI, meanwhile, is expected to float later this year or in early 2027.
A protracted decline in SpaceX's shares, however, as well as a possible deterioration in technology sentiment for the rest of the year, could cast a shadow or postpone the listings, some strategists said.
"The SpaceX IPO has not performed as expected. Anthropic and OpenAI are not a slam dunk," said Jane Edmondson, head of indexing design at ETF index provider TMX VettaFi. "People are starting to question whether to go into these listings, and this will drive market rotations going forward."
Other AI firms are also planning IPOs in the near-to-medium term, with Chinese platform DeepSeek potentially launching in early 2027, possibly followed by Canadian enterprise AI entity Cohere and U.S. chatbot company Perplexity.
AI Spending Woes
Rising AI spending – and whether it will translate into higher corporate profits – is also a mounting concern that could fuel volatility.
Tech giants such as Alphabet, Microsoft, Amazon, Meta and Oracle are pouring over $800 billion into AI data centers this year, with the 'hyperscalers' planning to add more than $1.2 trillion next year, according to Morgan Stanley. In 2027, that's expected to outpace their free cash flow (net cash after operations and capital expenditures), meaning "data centers are increasingly running on borrowed money," wrote New York Times columnist Jeff Sommer.
"Everyone is getting a little concerned about all the money that's being spent on AI," added Edmondson. "Is it an overbuild? And now many of these companies are going to the credit markets,” amid rising bond yields, which makes fixed-income capital raising more expensive.
While interest rates and geopolitical risks will also likely drive shifts, future earnings will be the main driver, said Daniel Alpert, executive chairman at Westwood Capital.
"All of these companies are so overvalued right now that what's really going to drive the market is performance, more than monetary policy or any wars," he said.
Alpert also expects M&A to be a big catalyst, with a hyperscaler possibly mounting a takeover bid for Anthropic, OpenAI or Perplexity to scale up their business.
"Google is facing an existential threat and they need to win the AI game," said Alpert. "They don't need to build out Gemini. They can just buy one of the big three chatbot companies."
New Single Stock Futures
To help traders manage risks from potential market rotations, CME Group recently launched Single Stock futures (SSFs) for over 50 top U.S. companies. The futures, which began trading on July 27, are offered as 55 larger-sized and 22 micro-sized contracts, providing investors with greater flexibility to manage their equity exposure.
"Clients want to manage equity price risk with more precision and with the capital efficiencies of a centralized marketplace," said Tim McCourt, Global Head of Equities, FX, and Alternative Products at CME Group. "Our new Single Stock futures simplify access to the most liquid U.S. stocks and enable traders to easily transition between broad market index hedging and targeted single-name exposure."
The offering enables investors to trade a broad range of Big Tech, semiconductor and software companies such as Microsoft, Google, Nvidia, Micron, Palantir and Oracle.
"We have a diverse offering from day one," said Paul Woolman, CME Group’s Global Head of Delta One Equity Products and Head of International. "Many of the 55 names are in the technology sector, which is where a lot of big-cap names are and where much of the market's growth has been.”
Added Woolman: “We also have representation across many other sectors, whether that be financials, healthcare, energy, consumer discretionary and more. So depending on your interest, you should be able to find Single Stock futures on the sectors you care about."
Meanwhile, as AI continues to develop, the market will begin to separate the winners from the losers, leading to massive industry shakeouts in the medium to longer-term future, analysts said.
"The rotation out of pure speculation and into more of a winner category will happen over the next several years and big chunks could happen all at once," said Kim Forrest, founder of Bokeh Capital, adding that these events will spark major liquidity shifts.
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