Author: Claude, Deep Tide TechFlow

Deep Tide Introduction: SpaceX attracted a net buy of $117 million from retail investors on its first day of trading last Friday, accounting for 56% of the total retail stock buying in the U.S. that day. Research firm Vanda has since introduced the new concept of "FAB 10," advocating the replacement of the long-standing "Seven Giants" with the ten frontiers of AI and technology, including SpaceX, OpenAI, and Anthropic. The latter two have yet to go public, with the market expecting them to debut later this year, both potentially exceeding a trillion-dollar valuation.

SpaceX's public debut is rewriting how Wall Street labels tech stocks.

According to a report released by Vanda Research on Sunday, SpaceX's IPO last Friday achieved tremendous success due to retail investor enthusiasm, prompting discussions about redefining the entire tech industry. Before this, the approximately $75 billion fundraising was already the largest IPO on record, with SpaceX pricing its shares at $135, giving it an estimated valuation of around $1.75 trillion, ranking it among the ten highest market capitalization publicly listed companies globally.

On SpaceX's first day of trading, retail buying accounted for 56% of the entire market

Vanda's data quantifies this frenzy. The report states that SpaceX attracted a net buy of $117 million from retail investors on its first day, representing 56% of all retail stock purchases in the U.S. that day.

This number only reflects the buying situation in the secondary market on the first day and does not include retail funds participating in the IPO allocation through brokerages. Additionally, other data shows that in this $75 billion issuance, retail investors eventually received approximately 20% of the allocation, above the average level; hedge funds received 10%, while long-term institutional investors secured 70%.

The concentrated investment by retail investors is further pushing funds toward a few mega-cap tech companies. Vanda believes that these companies not only dominate stock market performance but are also driving the entire wave of tech investment.

Vanda: Replacing "Seven Giants" with "FAB 10"

Based on this judgment, Vanda proposed a new classification framework.

"If the market was dominated by 'Seven Giants' over the past few years, then last Friday may be the clearest signal that investors are starting to focus on what we call 'FAB 10,'" Vanda wrote in the report. FAB 10 is an abbreviation for Frontier AI & Big Tech 10, referring to ten frontier AI and technology giants.

According to Vanda's definition, the FAB 10 adds SpaceX, OpenAI, and Anthropic to the existing seven giants. The latter two are currently not publicly listed, but the market expects they will enter the capital market later this year, with valuations potentially reaching hundreds of billions or even trillions of dollars.

Vanda provided a straightforward reason: these companies collectively represent the direction of the AI and tech industry for the next decade.

The Same Concept, but a Different Version from Bank of America

Vanda is not the only player to bundle mega tech stocks into a new index.

Bank of America Chief Strategist Michael Hartnett previously proposed an "AI Big 10" portfolio in "The Investment Universe Guide." The difference from FAB 10 lies in stock selection: Bank of America's version includes the seven giants plus Broadcom, AMD, and Micron, leaning more towards semiconductor hardware, whereas Vanda bets on not-yet-listed AI model companies and SpaceX.

The divergence between the two lists essentially reflects different bets on "who will define the next decade." One side is optimistic about chip makers, while the other favors those making models and launching rockets.

Retail Investors Pour into SpaceX, Chip Stocks May be Siphoned

The other side of the new concept is the redistribution of funds.

Vanda researchers pointed out that SpaceX's popularity may be siphoning funds from other hot sectors, especially chip stocks that have previously seen significant gains, which may be losing favor with retail investors. In other words, FAB 10 may not necessarily benefit all members equally internally; the cash-absorbing effect of new members may come at the cost of pullbacks from older members.

However, analysts also remind that the valuation of the entire tech sector has already shown signs of a bubble. SpaceX's listing at a valuation of $1.75 trillion is built on optimistic expectations for AI infrastructure; how long this optimism can hold remains to be answered by the market.