Thomas Richmond
4 min read
Quick Read
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Carol Schleif warns XLK’s 27% and QQQ’s 16% April surge reflects crowded positioning, making both vulnerable to SpaceX IPO-driven profit-taking.
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All 11 S&P sectors posted revenue growth last quarter, with 8 delivering double-digit earnings, signaling broad market strength well beyond the AI trade.
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Schleif flags upcoming inflation reports, a Fed meeting, and approaching earnings season as the real market catalysts once SpaceX repositioning clears.
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Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and iShares Russell 2000 ETF didn’t make the cut. Grab the names FREE today.
A mega-IPO is about to land in a market already running hot, and one Wall Street strategist sees it as the catalyst that forces investors to broaden their bets. Carol Schleif, Chief Market Strategist at BMO Wealth Management, told CNBC this week that the SpaceX IPO on Friday will pull capital out of the year’s biggest winners as investors bank profits and sideline cash. Her takeaway: rotate into the broadening market, where earnings strength now spans every corner of the S&P 500.
The Concentrated Rally And Why It Looks Vulnerable
Schleif’s starting point is the eye-watering run in mega-cap tech. The NASDAQ is up nearly 30% since April, and chip stocks are up close to 50% over the same window. Performance data backs the scale: the Technology Select Sector SPDR (NYSEARCA:XLK) is up 26.75% from April 10 through June 9, while the NASDAQ-100 tracker Invesco QQQ Trust (NASDAQ:QQQ) has gained 15.83% over that period.
Schleif argues that much of that move reflects crowded positioning rather than fundamentals. When a rally is driven by crowding rather than cash flows, the floor is thinner, and any unexpected headline becomes an excuse to lighten up. “You’ve had a lot of big moves in stocks in particular, especially those leaning into that AI trade, that technology build out the optimism about space. And so using any sort of headline that comes in a little bit unexpected… I think investors can use some of that to bank some profits, sideline some cash, if you will, for those upcoming IPOs.”
SpaceX’s Friday IPO as a Repositioning Catalyst
A mega-IPO is a capital-sourcing event, and investors who want to buy in will need dry powder. The easiest place to find it is in positions sitting on the largest gains. SpaceX’s S-1 disclosed that the company has raised over $9 billion in equity capital since its 2002 founding, with a Connectivity segment that generated $4,423 million in income from operations in 2025 and an AI segment formed through the February 2026 acquisition of xAI. The February 2026 acquisition of xAI is disclosed in the full S-1, and the size of the offering all but guarantees a portfolio reshuffle across institutional books.
