Key Points:
- SpaceX stock fell 5% to a record low of $138.58, sliding close to its $135 IPO price.
- China’s successful Long March 10B booster recovery has pressured the stock by testing SpaceX’s reusability moat.
- The company carries a steep price-to-sales ratio of 99, with heavy losses from its newly merged xAI unit.
- The Federal Aviation Administration has cleared Starship Flight 13 for launch as early as this week.
In a bruising morning on Wall Street, shares of SpaceX fell 5% in early trading to hit a fresh record low of $138.58, sliding dangerously close to its initial offering price. This latest decline extends a brutal stretch for the newly public aerospace and artificial intelligence conglomerate, which has shed roughly 35% of its value since hitting a euphoric peak of $225.64 in mid-June. Although the company remains the most talked-about name on the market, the rapid pullback has forced retail and institutional investors to reassess the premium they are willing to pay for Elon Musk’s high-flying aerospace giant.
On June 12, SpaceX made history by pulling off the largest initial public offering on record. The company listed on the Nasdaq exchange under the ticker symbol SPCX, pricing its 555.6 million Class A shares at $135 each to raise a staggering $75 billion. At launch, the valuation sat at a massive $1.77 trillion, ranking SpaceX among the most valuable companies in the world. The debut sparked absolute frenzy, driving the stock up 19% on its first day of trading to close at $161, briefly pushing its market capitalization past Amazon and Microsoft.
A convergence of geopolitical headwinds and competitive news triggered the recent selloff. Over the weekend, rising military tensions near the Strait of Hormuz sparked a broader “risk-off” mood across global equities, dragging down highly speculative, pre-profit tech stocks. At the same time, China reached a major aerospace milestone. On July 10, the country’s Long March 10B rocket successfully recovered its reusable first-stage booster using a sea-based net-and-hook platform. This achievement represents China’s first orbital-class booster recovery, puncturing the widely held belief that SpaceX holds an exclusive, unchallengeable monopoly over reusable rocket technology.
This technical milestone has amplified an ongoing debate on Wall Street regarding SpaceX’s eye-watering valuation. At its current share price of roughly $138.58, the company commands a market capitalization of $1.85 trillion. Based on its trailing 12-month revenue of $18.7 billion, the stock trades at an astronomical price-to-sales ratio of nearly 99. This multiple makes the aerospace giant 15 times more expensive than the average company in the Nasdaq-100 index, leading some conservative analysts to warn that the stock has entered bubble territory.
The core financials inside SpaceX’s S-1 prospectus also raise questions for long-term investors. While its Starlink satellite broadband business generated a healthy $4.4 billion in operating profit on $11.4 billion in revenue last year, those profits are being completely erased by the company’s AI initiatives. In early 2026, SpaceX merged with Elon Musk’s xAI, which houses the Grok artificial intelligence assistant. This merger saddled SpaceX with billions in operating losses and massive capital expenditures on AI chip infrastructure. Consequently, the consolidated group reported a staggering net loss of $4.9 billion for full-year 2025, followed by another $4.28 billion net loss in the first quarter of this year.
Investor confidence also suffered from a pair of highly aggressive financial maneuvers executed immediately after the public debut. On June 15, just three days after going public, SpaceX announced a massive $60 billion all-stock acquisition of AI coding startup Cursor, causing immediate share dilution for retail buyers. Simultaneously, reports emerged that the company was planning a $20 billion bond offering. The sudden need for tens of billions of dollars in new debt and stock dilution, despite just raising $75 billion in cash, left many portfolio managers wondering exactly how much capital the capital-intensive business requires to stay afloat.
Despite these concerns, index funds have provided some immediate buying support. SpaceX officially joined the Nasdaq-100 index on July 7, qualifying under newly revised fast-track rules that eliminated the standard minimum public float and trading history requirements. Financial analysts estimated that the inclusion would draw roughly $4.3 billion in passive index inflows. However, this artificial demand will soon collide with a wall of supply. When the company went public, only 5% of its 13.1 billion shares outstanding entered the public float, with the remaining 95% locked up. These lock-up restrictions on early-release shares are due to expire in tranches starting in late July, which will instantly double the public float to 1.5 billion shares and put heavy downward pressure on the stock.
This dynamic has left Wall Street intensely divided, with analysts setting price targets that look wildly different from one another. One prominent global bank initiated coverage with a bullish $300 price target, pointing to the massive long-term opportunity in space-based AI computing and defense contracts. Conversely, independent intelligence firm CFRA Research issued a stark sell rating with a $115 price target, warning that the stock represents a dangerous retail-driven speculative run. Some extreme price targets, such as Raymond James’ high of $800, would value SpaceX at over $10 trillion, illustrating the massive gap between conservative financial models and speculative future expectations.
Amid the stock market volatility, SpaceX received a major operational boost on Monday afternoon. The Federal Aviation Administration officially closed its investigation into the Starship Flight 12 Super Heavy booster failure that occurred in May. The regulator accepted SpaceX’s corrective actions and concluded that the incident posed no risk to public safety. This decision clears the path for the spacecraft’s highly anticipated 13th test flight, which the company has scheduled for launch as early as July 16, offering a potential technical catalyst to revive investor enthusiasm.
As SpaceX navigates its first full quarter as a publicly traded company, the honeymoon phase of its historic debut is officially over. The company must now prove to a skeptical market that its cash-generating Starlink satellite network can successfully carry the immense financial weight of both its loss-making AI ventures and its Mars colonization ambitions. Whether the stock can stabilize near its IPO price or drop further will likely depend on the company’s first public earnings report in early August. For now, the largest public listing in history serves as a stark reminder that even the most innovative companies on Earth cannot escape the gravity of financial fundamentals.
