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By Shashwat ChauhanBengaluru — Shares of Elon Musk’s SpaceX slipped further on Tuesday following a three-session selloff that wiped out more than $600bn from the company’s market value, with the highly valued technology sector on track to extend the rout.The rocket and AI company’s shares fell 1.9% to $151.6 earlier on Tuesday. The stock sank 5% to as much as $146.88 — dipping below $150, its opening price on the day of its market debut.SpaceX’s record-breaking initial public offering (IPO) fuelled a trading frenzy in its first week as a listed company, when it briefly surpassed Microsoft and Amazon in market valuation before retreating. SpaceX last had a market valuation of $1.99-trillion.“I’d be cautious about seeing this as a second-chance buying opportunity. The drop looks dramatic in scale, but these swings aren’t unusual for a stock with such a small public float,” said Nic Puckrin, cross-asset analyst and founder of Coin Bureau.The company’s shares stand more than 10% above their IPO price of $135.Big IPOs often face turbulence in their early days on the public market. A Reuters analysis of 50 IPOs with the highest valuations in the past five years showed investors would have been better off buying an S&P 500 index fund about three-quarters of the time than buying into a big IPO.SpaceX also announced a bond offering earlier this week.Nasdaq 100Meanwhile, futures tracking the tech-heavy Nasdaq 100 index dropped 3.1%, implying a more than 800-point fall. The index will lose $1.15-trillion in market value if it drops 2.79%, according to Reuters calculations.Chipmakers, which have emerged as some of the biggest winners of the AI trade so far this year, also clocked heavy losses. Intel and Advanced Micro Devices dropped 7.2% each.Memory chipmakers — the best-performing stocks on the S&P 500 so far this year — lagged on Tuesday, with Micron Technology down 8.4%, SanDisk falling 9.1% and Western Digital losing 7.5%. Memory chipmakers in South Korea also recorded steep declines.Six of the seven “Magnificent Seven” group of companies — the biggest technology stocks on Wall Street — were under pressure as investor concerns about elevated AI spending grew.Commonly dubbed hyperscalers, these firms have committed billions to ramp up their AI infrastructures, though clearer evidence that AI products can generate returns justifying the spending remains elusive.Lauren Hyslop, investment manager at Mattioli Woods, cited a more challenging interest-rate backdrop and concerns about the scale of capital required to fund the next phase of AI investment among the reasons for the selloff.Alphabet shed 2.1%, Amazon.com fell 0.9%, Tesla was down 2.7%, Nvidia lost 2.7% and Apple was 0.9% lower in premarket trading. The companies are set to erode a combined $331bn in market value if losses hold.Rate-sensitive technology stocks have also been hurt by expectations of tighter monetary policy under US Federal Reserve chair Kevin Warsh, especially as recent economic data points to a resilient economy.Microsoft was an outlier, climbing 1.3%, in line with a rise in software stocks like Workday and Salesforce.Reuters
