Track market-moving stories before they get noisy

SpaceX SPCX shares fell more than 2% on Friday, extending a volatile stretch that has erased the stock's post-IPO gains as investors continue debating whether Elon Musk's AI and space ambitions justify one of the world's richest valuations.

The stock traded around $148, below its $150 listing price, after briefly soaring to a record closing high of $201.80 on June 16 following its blockbuster market debut.

The sharp swings come as Wall Street publishes its first wave of research following SpaceX's record-setting IPO, with analysts offering differing views on the company's long-term potential.

Veteran investor Jeremy Grantham was among the most outspoken critics, describing the IPO as a potential landmark market bubble in a recent interview with Morningstar.

Grantham argued that much of SpaceX's valuation rests on aggressive assumptions about artificial intelligence despite what he described as the company's relatively weak competitive position in AI software.

He also questioned projections around orbital AI infrastructure and broader space-related opportunities outlined in the IPO prospectus, arguing they require technological advances that remain highly speculative.

Grantham said the stock could continue rising in the near term because of strong investor demand and index-related buying, but maintained that the valuation would ultimately have to be supported by fundamentals.

Musk remains bullishMusk, however, has continued to raise expectations.

Responding to comments on X this week, the SpaceX chief executive said the company could eventually become "worth more than the rest of Earth" if it achieves its long-term goals.

The remarks add to a series of ambitious projections from Musk, who has previously argued Tesla could become more valuable than Apple and Saudi Aramco combined.

Several Wall Street firms have also outlined aggressive long-term scenarios for SpaceX, driven largely by expectations for Starlink, reusable launch systems, and future AI infrastructure businesses.

Raymond James currently has one of the Street's highest published price targets at $800 per share, while Citi's bull-case scenario values the company at roughly $12 trillion.

SpaceX also faces growing competition overseas.

China on Friday successfully landed the booster stage of its reusable Long March-10B rocket, marking the country's first successful recovery of an orbital-class reusable booster.

The milestone places China's Aerospace Science and Technology Corp. alongside SpaceX and Blue Origin among the small group of organizations to demonstrate reusable rocket landing capability.

While SpaceX remains the clear global leader in reusable launch technology, China's latest achievement highlights the increasing pace of competition in the commercial space industry as governments and private companies race to lower launch costs and expand access to orbit.

SpaceX's pullback follows an explosive start to life as a public company, with the stock surging more than 30% in its first few trading sessions before reversing sharply.

The combination of lofty valuation expectations, ambitious long-term projections, and limited public trading history has left the shares particularly sensitive to shifts in investor sentiment.

With Wall Street still establishing coverage and investors trying to assess the company's AI, satellite, and launch businesses under one public valuation, analysts expect trading to remain volatile in the months ahead.

Two notable trends continue to bolster the capital markets landscape.

Of course, investor appetite for businesses in artificial intelligence (AI) remains robust. The view is that this is a groundbreaking technology that will have a meaningful impact on the economy.

Additionally, the market is captivated by anything Elon Musk is working on. His grand visions drive excitement.

These factors created the perfect backdrop for the most anticipated initial public offering (IPO) ever. On June 12, Space Exploration Technologies (SPCX 2.14%) went public. It raised $86 billion, after underwriters exercised their greenshoe option. The company currently sports a massive $2 trillion market capitalization. And the stock has traded 13% up from its opening price (as of July 9).

The hype is hard to overstate. But how will SpaceX's shares perform over the 12-month period following its IPO? Investors can try to glean insights by looking at the five largest previous deals.

Image source: The Motley Fool.

A wide range of industries The five largest IPOs prior to SpaceX are ranked by the amount of capital raised. The list includes Saudi Arabian Oil ($26 billion raised in 2019), Alibaba Group ($22 billion in 2014), SoftBank Corp. (not the investment holding company) ($21 billion in 2018), NTT DoCoMo ($18 billion in 1998), and Visa ($18 billion in 2008). Investors will notice that these deals come from different industries. Whether it's energy, technology, communication services, or financial services, no single sector dominates.

Their subsequent 12-month performances are a mixed bag. Saudi Aramco shares were down by a single-digit percentage. Alibaba's stock price tanked 30%. SoftBank's shares were up about 10%. NTT Mobile soared 68%. And Visa's stock was essentially flat one year later.

These figures are all over the place. It's telling that these companies were able to raise such massive amounts of capital. However, the timing of their IPOs, as well as their competitive positions, management teams, and financial performance, all weighed on their respective stocks' performances.

Based on these volatile numbers, investors can't come to a definitive conclusion about where SpaceX shares will be trading 12 months after its IPO. It's really a toss-up at this point.

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Sky-high valuation creates significant downside risk History isn't guaranteed to repeat, of course. But these huge IPOs do provide investors with a clear lesson in regard to the blockbuster public market entrance from Elon Musk's enterprise. SpaceX, whose $86 billion capital raise is more than three times the next largest, could see its stock price surge over the next year. It could also fall precipitously.

Investors shouldn't focus on the next 12 months, though. Anything can happen, as a time frame this short is heavily dependent on shifting market sentiment. This is unpredictable. No one has any clue where the stock will be in June 2027.

The best perspective to have is a long-term view. The smartest investors are asking where SpaceX could be in five years and beyond. Even after investors adopt a longer time horizon, the company's future remains extremely uncertain.

SpaceX does possess some notable positive traits. For starters, its vertically integrated business model has reduced launch costs, giving the company a big advantage. SpaceX commands more than 80% of the commercial launch market, according to research from The Motley Fool, as its launch cost per kilogram has fallen significantly over time.

Starlink is a successful endeavor, providing internet access to 10.3 million consumer subscribers (as of March 31) around the world. During the first three months of 2026, the connectivity segment (mostly made up of Starlink) generated $1.2 billion of operating income on $3.3 billion in revenue.

Valuation introduces a huge headwind, however. The stock trades at more than 51 times consensus analyst estimates for 2026 revenue. This is an astronomical price tag that bakes in a gargantuan earnings stream at some point in the future.

To say that SpaceX needs to execute flawlessly in the coming years would be an understatement. Not only that, but the ultimate goal of developing cheap interplanetary travel and establishing a civilization on Mars might not even be possible.

This space stock is best avoided. However, there are certainly bold investors out there who will continue to buy Elon Musk-led businesses.

SPCX combines launch, Starlink and AI upside, but heavy spending, losses and valuation risk keep the near-term case balanced.

NEW YORK, NEW YORK - JUNE 12: Elon Musk, founder and CEO of SpaceX, speaks via video before the ringing of opening bell at the Nasdaq Marketsite at the launch of the company's initial public offering (IPO) on June 12, 2026 in New York City. SpaceX is set to begin trading under the ticker SPCX following what is expected to be the largest initial public offering in history. Elon Musk, who also serves as chief executive of Tesla, could become the world's first trillionaire. In a filing with the Securities and Exchange Commission, the company said it plans to raise $75 billion by selling 555.6 million shares at $135 each. (Photo by Spencer Platt/Getty Images)

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SpaceX stock has lost a quarter of its value since peaking on June 16 following the company’s initial public offering. Due to equity investors’ faith in CEO Elon Musk the company was valued at $1.8 trillion while its actual business – which burns billions in cash – strikes fear in the hearts of debt-holders, according to the New York Times.

The equity is built on a conglomerate of unrelated business lines. As I wrote in May, SpaceX consists of a satellite-internet cash cow forced to subsidize a money-losing AI lab with Musk holding 85% of the votes and aiming at a huge bonus tied to colonizing Mars. Meanwhile the company’s investment-grade (Baa1/BBB+/BBB) debt trades like junk.

Wall Street analysts have not reached a consensus on where the stock will go next. CFRA’s price target – citing the risk SpaceX will fail to achieve its goals for Starship revenue, AI data centers in space, and making money from its chatbot xAI and the former Twitter (X) – implies SpaceX shares will drop another 23%. Raymond James believes the company’s total addressable market is $30 trillion – $1.5 trillion more than does Musk – and envisions SpaceX shares soaring 433%.

Why SpaceX Stock Fell 25%The root cause of SpaceX’s stock price decline was the gap between the high valuation of its shares at the IPO and the low profit potential of the company’s business units. In addition, a few post-IPO financial moves further spooked investors.

The IPO price was managed to achieve a first-day pop. Only about 5% of SpaceX shares were sold to the public and shares were valued at an exorbitant 94 times sales. Record retail demand – 30% of total which was three to six times the usual allocation – and buying by index funds helped propel the shares, according to the New York Times.

One valuation expert said SpaceX was embarrassingly overvalued. The $28.5 trillion total addressable market cited in the IPO prospectus prompted NYU Stern valuation professor Aswath Damodaran to say "the prospectus was written by Grok," reported CNBC. The IPO valuation was 27% too high based on his discounted cash flow analysis and the TAM estimate was a "hallucination" he "would be embarrassed to even put out," he added.

Given SpaceX’s money-burning business model, it is no surprise that S&P projects the company will generate negative free cash flow through 2029. That’s because SpaceX reported a 2025 net loss of $4.937 billion. It gets worse – in the first quarter of 2026, its net loss was $4.276 billion the company spent $7.7 billion on AI capital expenditures.

SpaceX’s equity allocation is a significant risk for retail investors. Elon Musk holds the vast majority of the voting shares. Also important – a whopping 44% of the shares could be dumped by insiders in September – which may pressure the stock price.

On top of that, two significant events took place after the IPO. These included:

The $60 billion all-stock acquisition of Cursor/Anysphere – which was announced June 16 and diluted SpaceX shares by roughly 4%.A surprise $25 billion bond sale on June 22 and 23 which exposed repayment deadlines.The latter offering – which prompted traders to price the bonds at junk levels – has not gone over well. "The biggest, most sophisticated investors in the world see a harder road to success than Musk touts and demand to be compensated accordingly," noted Bloomberg. “Traders told Bloomberg they couldn’t recall another deal where prices sank that quickly,” added the New York Times.

The Bull And Bear Cases For SpaceXDespite all this, the bull case prevails on Wall Street. That’s because 27 analysts set an average 12-month price target of $245.96 – suggesting 61.6% upside.

The bull case is a torrent of words at odds with cash flow reality. SpaceX is a vertically integrated platform — dominant launch, the largest satellite-internet network, and a call option on AI infrastructure and Mars — with Starlink's cash flywheel funding it all.

Raymond James analyst Brian Gesuale wrote "just as railroads, electric grids, and the Internet reshaped prior economic eras," SpaceX is "building the foundational platform for the next generation of industrial capacity."

The pessimists would avoid SpaceX shares. These include GMO’s Jeremy Grantham who called its offering possibly "the craziest IPO in human history" and said he’d only be interested "at 10 cents on the dollar." Paul Krugman likened the company to a "Ponzi scheme."

The one reasonable hope for SpaceX bulls is if the company reports consistently better than expected results — such as a clear and compelling path to profitability in its money-incinerating Launch and AI units.

Otherwise, those who bought into Musk’s reality distortion field may lose money on SpaceX stock.

While Elon Musk’s other trillion-dollar company drew the bulk of attention, SpaceX (NASDAQ: SPCX) was not the only exciting technology stock to hit the public markets in June 2026.

Specifically, the quantum computing company Quantinuum (NASDAQ: QNT) launched on June 4 with an initial public offering (IPO) price of $60 per share, which turned into $68 already at the morning bell but then dipped to $60.38 by the evening.

At press time in the July 10 pre-market, however, QNT equity is worth substantially more: $74 following a 0.67% extended session rally from $73.51 at the latest close. 

Under the circumstances, $1,000 invested at either the IPO price or close to the June 4 closing bell would have turned into $1,233.30 for $233.30 in profits, simultaneously making it a superior investment to SpaceX stock.

QNT stock price chart. Source: Google Still, despite offering a strong performance in its first month, given it is 30.66% above its day-one price, Quantinuum has been on a slow downtrend in recent weeks and is 14.74% under its all-time high (ATH) of $86.79.

Wall Street sets Quantinuum stock price target for the next 12 months Elsewhere, QNT shares might simultaneously be the best quantum computing stock to buy in 2026. Along with impressive initial performance indicating the equity was somewhat undervalued from the get-go, Wall Street experts see substantial room for growth in the coming 12 months.

Indeed, Quantinuum is overall regarded as a ‘Strong Buy,’ with a singular ‘Hold’ recommendation – issued by Morgan Stanley’s (NYSE: MS) Joseph Moore with a $78 price forecast on June 29 – and no ‘Sell’ ratings.

Furthermore, the quantum computing stock is, on average, expected to climb 34.34% to $98.75 in the next 12 months.

Wall Street sets QNT stock price target for the next 12 months. Source: TipRanks Examining the specific stock price targets, Rosenblatt analyst John McPeake is responsible for the Street high estimate of $155 – a 110.86% predicted climb from the latest close and 109.50% from $74 at press time.

Along with being a popular company operating in a now government-backed sector, Quantinuum made itself into a top 2026 quantum computing stock with recent scientific and engineering achievements.

Notably, the firm is responsible for Helios – a machine touted as the world’s most accurate commercial quantum computer.

Lastly, and despite the recent achievement and strong market performance since the IPO, quantum computing has, thus far, been akin to the phenomenon of quantum superposition in that it has been perpetually impressive in its achievements and underwhelming in outcomes while, despite the promise, so far evidently failing to produce world-changing breakthroughs upon scrutiny.

Quantinuum could change the reading, thus solidifying its position as the best quantum computing stock to buy in 2026, but investors should be aware that it could find itself stuck in a type of limbo for years to come.

Featured image via Shutterstock

Space Exploration Technologies (SPCX +2.38%), or SpaceX for short, recently became the largest initial public offering (IPO) in history. And at a market cap of about $2 trillion, it's already one of the world's most valuable companies. Its hefty valuation has led to the company's inclusion in several market indexes, including the popular growth and tech-focused Nasdaq-100.

Although companies don't typically join major indexes so soon after their IPOs, SpaceX is a special case due to its size and high profile. It's one of only a few publicly traded space companies and has immense upside in artificial intelligence (AI) following its merger with xAI earlier this year.

Here's what SpaceX's inclusion in the Nasdaq-100 actually means for investors right now.

Image source: The Motley Fool.

Indexes create demand through passive buying It's significant anytime a company joins an index, especially a popular one such as the Nasdaq-100. Now that it has added SpaceX, every index fund that tracks it must buy the stock in proportion to its weight in the index. Despite SpaceX's huge market cap, it won't represent much of the Nasdaq-100 at first.

The index weighs stocks based on their float, the number of shares publicly available to investors. The company went public with a very small float, making only about 4% of its total shares available to the public when it began trading.

As a result, SpaceX will initially account for only about 1% of the Nasdaq-100. That may change as lockups expire over the next 180 days, and the float grows as more shares enter the market.

It's unclear whether that can overcome a steep valuation SpaceX's inclusion in the index is generating buying demand for the stock, but it's not a given that it will be enough to drive up the share price. In fact, the stock actually tumbled nearly 7% on its first day in the index. Investors should be wary of the stock's high valuation, which could continue to drag on its performance.

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Even though the shares have fallen back to around $148 after an initial surge to $225, SpaceX still has a huge market cap of $1.95 trillion. That values the business at more than 100 times its 2025 revenue of $18.6 billion. That's an extremely difficult ratio to sustain without blistering growth to keep investors willing to pay such high prices to own the stock.

SpaceX does have ample growth potential over the next decade and beyond. But some of its ambitions, such as putting AI data centers into orbit, won't happen right away. It wouldn't surprise me to see the stock continue to slide as investors weigh its valuation against the company's near-term growth outlook.

China's Long March rocket blasted off in a historic launch on Friday. VCG/VCG via Getty Images SpaceX is flying high off the back of a record-breaking IPO, but China looks determined to bring Elon Musk back down to Earth.

China successfully landed the booster stage of its Long March-10B reusable rocket on Friday, the first time it has launched and partially returned a reusable orbital rocket safely to Earth.

It means that China's Aerospace Science and Technology Corp, which built the rocket, joins Musk's SpaceX and Jeff Bezos' Blue Origin as the only organizations to have successfully landed a rocket booster.

长征十号乙运载火箭成功实现一子级可控回收，是全球首次运载火箭网系回收BREAKING｜WORLD‑FIRST ACHIEVEMENT! #China's Long March 10B carrier #rocket lifted off from the Hainan commercial space launch site at 12:15 pm on Jul. 10. Approximately six minutes after the separation of the… pic.twitter.com/J3mZGuD9Lk

— Beijing Evening News (@BeijingEvening) July 10, 2026 Local media reported that the Long March rocket's first stage touched down on a barge around six minutes after launch and was captured by a large net — reportedly the world's first ever "net-based recovery" of a rocket.

Landing a first-stage booster, rather than letting it burn up on reentry, is a key milestone in building reusable rockets, which significantly lowers launch costs. SpaceX landed its first booster in 2015 and has since launched and successfully recovered its Falcon 9 rocket hundreds of times.

In 2024, SpaceX wowed the world by catching the nearly 400-foot-tall superheavy booster — which is used to propel its next-generation Starship rocket into orbit — with the chopstick-like arms of its "Mechazilla" launch tower.

Blue Origin scored its first booster landing last November, with the first stage of its towering New Glenn rocket successfully landing on a platform in the Atlantic Ocean.

Bezos' rocket company has suffered setbacks since then, with New Glenn exploding on the launchpad in May.

Landing a booster is a significant step toward China's ambition of catching up with SpaceX, which launches far more material into orbit than any other country or company.

China's reusable Long March rocket can't carry as much into orbit as SpaceX's Falcon 9.  Ding Yi/VCG via Getty Images The Asian superpower is also attempting to build a rival to SpaceX's Starlink satellite internet service, with state-backed company SpaceSail launching around 200 satellites into orbit since 2024.

That's well behind Starlink, which has an estimated 10,000 satellites in low-earth orbit. China's Long March rocket also lags behind SpaceX's Falcon 9, with a max payload capacity of 16 tons compared to the Falcon's 25 tons and Starship's planned 100+ tons.

In a post on X in October, however, Musk said that China's reusable rockets were catching up with SpaceX's workhorse rocket — even if they were still some way behind the cutting edge.

"They have added aspects of Starship, such as use of stainless steel and methalox, to a Falcon 9 architecture, which would enable it to beat Falcon 9," he wrote.

"But Starship [is] in another league," Musk added.

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China SpaceX Elon Musk More Space Blue Origin

The obvious question about Grok 4.5 is whether a model priced at a fraction of its rivals delivers a fraction of the performance.

The answer, on the published evidence, is that the pricing is not the point.

SpaceX Corp (NASDAQ:SPCX) released the model on Tuesday, its first since absorbing xAI and agreeing to buy the coding tool Cursor for $60 billion.

Elon Musk described it as Opus-class, referring to Anthropic's flagship family, but faster, more token-efficient and lower cost.

Where it sits

The benchmarks tell a mixed story rather than a triumphant one.

On SpaceXAI's own published charts, Grok 4.5 beats Anthropic's Opus 4.8 on two of four coding benchmarks and loses on the other two.

Anthropic's Fable 5 leads most of those charts outright.

Independent evaluation from Artificial Analysis places Grok 4.5 fourth on its GDPval index for real-world agentic knowledge work, behind the latest Claude releases, with an Elo rating of 1543.

So it is not the most capable model available, and SpaceXAI's own data does not claim otherwise.

Why the price is not the story

Grok 4.5 costs $2 per million input tokens and $6 per million output tokens, against $5 and $25 for Opus 4.8.

But the sharper number is consumption, not price.

On one software engineering benchmark, Grok 4.5 completed tasks using an average of about 15,900 output tokens against roughly 67,000 for Opus 4.8, a gap of more than four times.

Tokens are the units of text a model processes and generates, and they are what customers actually pay for.

A model that charges less per token and uses far fewer of them compounds the savings twice over.

Artificial Analysis put the cost at $0.49 per completed task and described the model as sitting clearly on the frontier for performance against cost.

That is the answer to the value question: not half the model for half the price, but a slightly weaker model at a substantially lower total cost per job done.

What makes it different

Grok 4.5 was trained differently from most coding models.

Rather than learning only from static code, it absorbed real developer session data from Cursor, including debugging traces, multi-file changes and the corrections users made when the tool got things wrong.

That gives it a signal about how software actually gets fixed, not merely how it looks when finished.

It runs at about 80 tokens per second, supports a 500,000-token context window, and is built on a 1.5 trillion-parameter foundation trained across tens of thousands of Nvidia chips.

Its strengths, per the launch material, cluster around long-running agentic tasks: building applications end to end from a single prompt, working across multiple code repositories, and operating inside Word, Excel and PowerPoint.

It also topped a legal benchmark from Harvey, suggesting the training mix reaches beyond engineering.

The catch

Vendor benchmarks are vendor benchmarks, and independent testing is still thin.

Grok 4.5 is unavailable in the European Union until mid-July, and the Cursor acquisition has not yet closed.

Whether developers switch will depend on how the model behaves on their own work, not on cost per task in a chart.

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2026: A Space Stock Odyssey

Stock Market Mixed As Chips Rise While Small Caps, Dow, SpaceX Struggle; Ned Davis On Cash SpaceX (SPCX) could be among the companies that transform the aerospace industry into something much more mundane — but lucrative — for broader investors. The Elon Musk-led company could lead a shift in space companies from specializing in aerospace and transportation to becoming critical data-infrastructure providers. "There's a common thread in these industries, and data is that thread," said Andrew…

Copyright ©2026 Investor's Business Daily, LLC. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

SpaceX Corp (NASDAQ:SPCX) released Grok 4.5, the company's first major update to its AI model built in collaboration with Cursor, targeting coding and agentic workflows as the company pushes further into the enterprise AI market.

The 1.5 trillion parameter model was trained on tens of thousands of GB300 GPUs and builds on Grok 4.3, which launched in April 2026.

SpaceX said Grok 4.5 delivers performance close to Anthropic's Claude Opus 4.8 and OpenAI's GPT 5.5, while offering lower pricing and greater token efficiency.

Grok 4.5 is priced at $2 per 1 million input tokens and $6 per 1 million output tokens, compared with $5 and $25 for Opus 4.8, $10 and $50 for Fable 5, and $5 and $30 for GPT 5.5.

SpaceX said the model uses approximately 16,000 tokens per SWE-Bench Pro task, versus 67,000 for Opus, a roughly 4.2 times improvement in efficiency. The company reported sizeable gains across agentic and coding benchmarks compared with Grok 4.3, along with continued advances in knowledge and reasoning tasks.

The release comes as SpaceX targets what UBS estimates is a $23 trillion enterprise AI total addressable market. UBS said SpaceX is entering the enterprise market from a relatively low base but is building momentum through an expanding product portfolio and improving customer adoption.

OpenAI is expected to release GPT 5.6 in the coming days, a launch UBS said should raise the competitive benchmark across AI labs and underscores the importance of continued model advancement.

UBS rates SpaceX shares Buy with a $210 price target, based on a sum-of-the-parts approach valuing the Space segment at 24 times 2028 estimated revenue, Connectivity at 30 times 2028 estimated EBITDA, and AI at 28 times 2028 estimated EBITDA.

Following a quiet period for IPO underwriters, Wall Street firms were out with a bevy of largely bullish stock initiations on Space Exploration Technologies (SPCX +3.10%), or SpaceX. But one certainly stood out from the rest. Raymond James, which was an underwriter on the IPO, started coverage of the stock with a "strong buy" rating and a whopping $800 price target.

Now it's worth noting that early analyst ratings of recent IPOs tend to be bullish. After all, the firms that are underwriters on an IPO make a lot of money, and they aren't going to get a lot of new business if they start coming out bearish on a recent IPO with which they were associated. The industry can try to set up the biggest "ethical walls" it wants, but you can guarantee that big new IPOs are getting an initial bullish rating from underwriting firms.

However, Raymond James certainly took this to another level with a price target on SpaceX light-years above any other Wall Street firm. Analyst Brian Gesuale centered his bullish thesis on SpaceX becoming "the foundational platform for the next generation of industrial capacity" across various industries.

The core argument of his thesis is that his next-generation massive reusable rocket, Starship, will make space transportation so cheap that it will help create new industries that don't yet exist. This includes things like using the rocket to fly cargo across Earth in under an hour, mining asteroids, and building AI data centers and factories in space.

Gesuale projects that SpaceX will generate more than $837 billion in revenue in 2031 and $696 billion in EBITDA (earnings before interest, taxes, depreciation, and amortization). He said his $800 target is based on a 27x exit multiple applied to his discounted cash flow projections.

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Don't buy the hype In my view, Raymond James' $800 price target on SpaceX is trying to bolster a speculative stock with more hopes and dreams. First, Starship has to demonstrate that it can be launched routinely and reused to dramatically reduce launch costs and increase payload capacity. But that is just step one.

Earth-to-Earth cargo transportation in under an hour is an interesting concept, but there would be many safety, regulatory, and infrastructure obstacles to overcome, and the economics of such a business are uncertain. I don't believe this will be up and running in the next five years, and it would be hard to imagine the U.S. and China suddenly working together to build the infrastructure needed for this work.

AI data centers in space are something multiple companies are pursuing, given that they can be powered by solar and have access to nearly endless sunlight, but, once again, there are major hurdles to overcome. Eliminating the impact of cosmic radiation on AI chips is a big one, as is finding a way to cool systems in the vacuum of space. Then there is the whole cost of building and servicing an orbital data center.

Image source: The Motley Fool.

Asteroid mining, meanwhile, would require breakthroughs in robotics and extraction, and it may not be economically viable. AI factories also seem like a niche that likely may not really be necessary.

At $800, SpaceX would be an over $10 trillion company. The stock is not valued based on any of its current businesses, as it generated just $19 billion in revenue last year and posted an operating loss. Its Starlink business is a solid, growing recurring business, although it is set to see increased competition. Meanwhile, SpaceX's mobile Grok app has been losing market share, according to Apptopia data.

Not only is Raymond James' $800 target likely highly unrealistic, but it also wouldn't surprise me if the space stock is lower over the next year, as it faces multiple lock-up expirations that will release more shares into the market.

We’ve talked before about the hot IPO summer, but with SpaceX just launched to public markets and Anthropic and (maybe) OpenAI soon to come, it can be easy to miss the sheer scale of what’s happening.

We got a good reminder of it in Wednesday’s NCVA-Pitchbook Venture Monitor report. Not surprisingly, all of the money in private markets is flooding into AI — but one particular figure stood out. Taking the measure of the pending OpenAI and Anthropic IPOs, the report drops this nugget: “Along with the SpaceX IPO, these exits will generate more value than all U.S. VC-backed exits since 2000.”

That’s quite a claim, and when you add up the numbers, it’s hard to disagree. SpaceX has already gone public at a $1.77 trillion valuation, and with both Anthropic and OpenAI pushing into the trillions it’s likely the trio together will land somewhere north of $4 trillion. By comparison, the U.S. Securities and Exchange Commission counted just $70 billion in U.S.-based IPO proceeds last year.

Careful readers will notice a few caveats in the language. It doesn’t include non-U.S. companies like Alibaba, and we’re measuring “value created” as opposed to strictly liquid cash. A lot of the major tech developments happened at companies that had already gone public (the iPhone, the debut of Android, and the launches of YouTube and Instagram), so they wouldn’t be captured in the IPO figures.

Still… that was a pretty eventful 25 years. Among other things, that period saw IPOs from Google (2004), Tesla (2010), and Meta (2012), which are now among the most valuable companies in the world. During the same period, LinkedIn, Slack, and WhatsApp were all acquired for more than $20 billion. Uber’s $84 billion IPO seemed like a lot of money in 2019, but it’s less than 5% of what SpaceX just drummed up.

One factor here is that companies are staying private for longer. The Google of today probably would have delayed its IPO and gone public at a higher number. Another factor is the capital-intensive nature of AI training, which has pushed labs into intense fundraising and inflated valuations. But the sheer scale of the public offerings is still way beyond anything the industry has ever done, and is already pushing the financial infrastructure to its limit.

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Russell Brandom has been covering the tech industry since 2012, with a focus on platform policy and emerging technologies. He previously worked at The Verge and Rest of World, and has written for Wired, The Awl and MIT’s Technology Review. He can be reached at [email protected] or on Signal at 412-401-5489.

The SpaceX IPO made CEO Elon Musk a trillionaire and could make investors in the company richer in years to come if the story can play out, Grantham said in an interview on Morningstar’s "The Long View" podcast.

"Supply and demand being what it is, it’s hard to imagine the price won’t go up, and perhaps it will go up a lot," Grantham said.

The GMO co-founder and chief investment strategist said the SpaceX IPO is a "landmark historical event."

"It will be amazing, by the way, if it doesn’t collapse, because it will need such massive developments on AI that our entire lives are totally different."

Grantham said SpaceX is "the craziest IPO in the history of man," an event that had everyone lining up telling investors to buy.

"In 50 years, they’ll be telling and writing stories about SpaceX and they’ll be quoting you paragraphs from the prospectus, and you will be laughing at it."

The Elon Musk AbilityThe British investor said that Musk is good at creating perceived value for his companies, which allows him to sell stock and reinvest in them.

"You’re so good at propaganda that instead of the price falling because of the dilution, it doesn’t, and very quickly it’s multiples of fair value once again."

Grantham mentions the greater fool theory when talking about Musk in the interview and his ability to get investors. This theory involves making money by buying overvalued assets, regardless of fundamentals, and later selling them at higher prices to "greater fools."

"The cohort that invested in Musk were proven right."

Grantham said time will tell if the theory works with SpaceX.

"Whether they can pull it off with $1.7 trillion worth of hype about AI – put it this way: If AI is actually going to be so good that the $1.7 trillion is cheap."

The investor said we should hope this is just AI hype, because if it’s not, the technology could put lives at severe risk.

"I wouldn’t wish it on our species at all."

Image via Shutterstock

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Two months before the massive $86 billion raise from the Space Exploration Technologies (SPCX +0.58%) IPO, former Apple analyst and co-founder of Deepwater Asset Management Gene Munster said in an investor note that SpaceX was "the only entity in the world building sovereign AI."

That phrasing does not imply that Munster thinks SpaceX's AI will rule everything, but rather that the company is building and owning all the artificial intelligence software and hardware it would require in such a way that essentially no other company could bottleneck its progress.

Munster is bullish on the company for this reason, and he said recently that SpaceX should be a "core tech holding" for investors. So, should investors follow his opinion and buy SpaceX now?

Image source: Getty Images.

SpaceX is doing something not even Google has pulled off Munster's definition of sovereign AI in SpaceX's case is an infrastructure consisting of its rocket launch capabilities, its Grok AI model, its Starlink satellite broadband service, and its planned Terafab semiconductor foundry. That combination of assets gives SpaceX an AI edge that not even Alphabet can match (since the Google parent can't launch its own orbital data centers into space).

As Munster said in the investor note, Alphabet must rely on the chip manufacturing capabilities of Broadcom and Taiwan Semiconductor (also known as TSMC), and it doesn't have an in-house rocket launch operation:

Google still relies on external fabrication (Broadcom/TSMC), doesn't own last-mile network delivery, and lacks a launch vehicle to deploy infrastructure off-world.

SpaceX's potential advantage over its AI competitors hinges on a couple of important things, though. First, it will have to achieve its goal of drastically reducing launch costs with its Starship rocket compared to its Falcon rockets. Second, it will have to work out all the complexities of getting a constellation of data center satellites operational in a commercially viable way.

No company has orbital data centers right now, and even with the advantages it has from being able to launch its own rockets to deploy such satellites, there's no guarantee SpaceX will be able to get orbital data centers to work or that they'll be cheap enough to be useful.

What's more, SpaceX has barely broken ground on the Terafab site where it aims to build the semiconductors for its data centers. The idea is that once that foundry is churning out silicon at scale, SpaceX won't have to rely on leading chipmakers like Taiwan Semiconductor and Broadcom, which have many large customers, and whose production can get bottlenecked when demand is high (as it is now).

The Terafab project will include most of what SpaceX will need for its data centers, including chip design, wafer fabrication, and even memory processors. That latter category of chips is important, as AI software has massive memory demands, and a shortage of memory chips has led to soaring prices.

But SpaceX will still rely on other companies during the Terrafab setup, most notably Intel, which is helping it set up and build its fabrication infrastructure. And even if the Terafab project works well, there's no guarantee that its orbital data center plans will succeed.

For reference, analysts at Morningstar say SpaceX couldn't launch commercially scalable orbital data centers until 2028 at the very earliest, "even in the most optimistic scenario."

Still, Munster argues that if SpaceX can get them to work and they're efficient, no other company will have the AI infrastructure advantage that it will have.

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Even with all of SpaceX's potential, I think it's too early to buy the stock. The biggest reason for this is that SpaceX just went public and will likely remain very volatile for at least the next year.

Jeffries' research over the past 20 years shows that companies that go public with market caps of $10 billion or more average returns of only 3.5% one year after their IPOs.

What's more, SpaceX shares are trading at a hefty premium, with a price-to-sales ratio of 110. The tech sector average is just 9.

Meanwhile, the company is ramping up its spending -- capital expenditures were $10 billion in the first quarter, nearly a third of what SpaceX spent last year. And it incurred nearly $5 billion in losses last year.

The point is that SpaceX stock is expensive, pursuing the company's ambitious goals will be extremely costly, and most mega-IPOs prove disappointing in their first years on the market.

Even if Munster's bull case does eventually pan out, waiting on the sidelines is likely the best move for now. I recommend watching the company over the next year or so to see how well it progresses toward its goals before making a decision on whether or not to buy SpaceX stock.

Space Exploration Technologies' (SPCX +0.58%) initial public offering has dramatically increased investor attention around space stocks. One that is definitely worth a closer look is Rocket Lab (RKLB +0.92%).

SpaceX is set to join the Nasdaq-100 on July 7, which could drive index-tracking funds to buy the stock. However, SpaceX's initial index weight is estimated to be less than 1%, as the Nasdaq-100 adjusts for public float, or the percentage of shares available for public trading.

So, while SpaceX may dominate the headlines, Rocket Lab's backlog, contracts, and execution milestones still give investors reasons to take the company seriously as a space and satellite stock.

Image source: Getty Images.

Why Rocket Lab Still Matters Rocket Lab is already demonstrating solid business momentum. In the first quarter, revenue jumped 63.5% year over year to $200.3 million. The company's generally accepted accounting principles (GAAP) gross margin was 38.2%, while backlog rose 20.2% sequentially to $2.2 billion.

The company also signed 31 new contracts for Electron, its small rocket, and HASTE, its defense-focused launch vehicle used for hypersonic testing. The company also added five contracts for Neutron, its larger rocket, which is still under development. Rocket Lab had over 70 contracted launches in its backlog at the end of the first quarter.

SpaceX's IPO has undeniably brought more attention to the space industry, but Rocket Lab's case is not based only on market excitement. Rocket Lab expects second-quarter revenue to fall in the range of $225 million to $240 million, up 16% sequentially at the midpoint.

Rocket Lab is expanding beyond launches Rocket Lab's planned $8 billion acquisition of Iridium Communications (IRDM +0.40%) can prove to be a long-term catalyst. Iridium already operates a low-Earth-orbit satellite network and has more than 2.5 million subscribers across government, aviation, maritime, defense, and enterprise markets. If the deal closes, Rocket Lab would not only build and launch satellites but also operate them. It could also operate a satellite network and sell communication services.

In March 2026, Rocket Lab also signed a $190 million HASTE contract with Kratos Defense & Security Solutions for the U.S. Department of Defense's MACH-TB 2.0 hypersonic testing program. The contract covers 20 hypersonic test flights over four years and is the largest launch contract in the company's history. Hence, Rocket Lab is also building a defense-focused business rather than just competing with SpaceX on regular satellite launches.

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Risks to consider The neutron rocket is important to the company's ambition to handle larger satellites, government missions, and larger commercial missions. However, Rocket Lab has pushed Neutron's first launch target to the fourth quarter of 2026 after a development setback. Any further delay could hurt investor confidence.

Rocket Lab is also still unprofitable. The company reported a net loss of $45 million in the first quarter and expects an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss of $20 million to $26 million in the second quarter.

Customer concentration and government exposure can also pose risks. In 2025, the company's top five customers accounted for 49% of revenue. The top five backlog customers also accounted for 77% of its backlog. Rocket Lab also earned 47% of its revenue from U.S. government-related contracts, many of which were fixed-price contracts, in 2025.

Investors should closely monitor both growth catalysts and risks before treating Rocket Lab as a simple SpaceX alternative.

Space Exploration Technologies (SPCX 0.78%) made its public debut on June 12. The initial public offering (IPO) was historic not only because the company raised a record $75 billion, but also because its market value was an unprecedented $1.7 trillion at the IPO price of $135 per share.

SpaceX soared 50% during the first three trading days, hitting a high of $202 per share amid strong demand from retail and institutional investors. But the stock has since fallen 26% to $150 per share because of anxiety about the company's recent bond offering and the upcoming lockup expiration dates.

Here's what investors need to know.

Image source: Getty Images.

History says SpaceX stock could fall much further in the coming months Since 1980, the average IPO stock has gained about 19% on the first trading day, according to Jay Ritter, professor emeritus of finance and director of the IPO initiative at the University of Florida. SpaceX fit that pattern perfectly. Shares closed at $161 on June 12, representing 19% upside from the IPO price of $135.

However, excitement surrounding IPOs tends to fade quickly, and companies that go public at large market values have historically performed poorly during the first year. The following chart lists the 15 largest U.S. IPO stocks (by market value at the IPO price) excluding SpaceX; for each stock, it shows (1) the one-year return and (2) the maximum drawdown in the first year relative to the IPO price.

IPO Stock

1-Year Return

Max Drawdown

Meta Platforms

(31%)

(53%)

Uber Technologies

(27%)

(67%)

Rivian Automotive

(58%)

4%

Coinbase Global

(41%)

(41%)

Venture Global

(59%)

(76%)

Coupang

(46%)

(48%)

General Motors

(34%)

(40%)

Airbnb

165%

84%

Visa

28%

(4%)

Kenvue

(13%)

(17%)

DoorDash

62%

11%

Rocket Companies

(3%)

(8%)

UiPath

(68%)

(68%)

Snowflake

170%

(57%)

Robinhood Markets

(76%)

(82%)

Average

(2%)

(23%)

Data source: First Trust, Bloomberg. Returns are relative to IPO prices.

Among the 15 largest U.S. IPOs, the average stock traded 2% below its IPO price after a year, but it dropped 23% from its IPO price at some point during the first year. Past results are never a guarantee of future returns, but we can use those numbers to make an educated guess about what SpaceX stock might do in the future.

If SpaceX's performance matches the historical average, the stock will trade near $132 per share (2% below its IPO price) by June 2027. That implies 11% downside from the current share price of $149. In that scenario, $20,000 invested in SpaceX today would be worth about $17,800 by June 2027.

But history also says SpaceX will drop 23% from its IPO price at some point in the first year. That would bring the stock to $104 per share, which implies 30% downside from the current price. In that scenario, $20,000 invested in SpaceX today would be worth about $14,000 at some point in the next year.

SpaceX shares available for public trading will increase sharply once lockups start expiring SpaceX issued 555 million shares for its initial public offering, bringing the total number of shares outstanding to 13.1 billion. That means less than 5% of SpaceX stock is currently available for public trading, while the other 95% (held by employees and insiders) is subject to various lock-up periods.

Those lock-up periods start expiring in a few weeks. In late July or early August, following the company's second-quarter financial report, at least 20% of early release shares (about 911 million shares) will become eligible for public trading. That means the float will more than double to reach 1.5 billion shares.

However, lockup expirations don't stop there. Another 7% of early release shares (about 320 million shares) will become eligible for public trading at 70 days, 90 days, 105 days, 120 days, and 135 days post-IPO. That means the float will double again, reaching at least 3 billion shares by late October.

Here's the big picture: Stock prices are determined by supply and demand. The number of SpaceX shares available for public trading will increase greatly in the coming months, and the stock price could drop, perhaps sharply, as the market digests that supply increase.

So investors need not rush to buy SpaceX stock today. More attractive opportunities are likely to arise in the future. That is particularly true because the stock currently trades at 101 times sales, making it the most expensive stock in the Nasdaq-100 by a wide margin. Rocket Lab ranks second at 73 times sales.

Trevor Jennewine has positions in Visa. The Motley Fool has positions in and recommends Airbnb, DoorDash, Meta Platforms, Rocket Companies, Rocket Lab, Snowflake, Uber Technologies, UiPath, and Visa. The Motley Fool recommends Coinbase Global, Coupang, General Motors, and Kenvue. The Motley Fool has a disclosure policy.

On Wednesday, SpaceXAI launched Grok 4.5, its newest AI model designed to help users write code, complete complex work tasks, and handle research-heavy projects.

SpaceXAI (formerly xAI) operates as a wholly owned artificial intelligence unit of Space Exploration Technologies Corp. (NASDAQ:SPCX).

The company said Grok 4.5 is its strongest model so far and was trained alongside Cursor.

SpaceXAI said the model can build apps from simple prompts, create Excel models, draft PowerPoint slides, and write clear documents in Word.

The company priced Grok 4.5 at $2 per million input tokens and $6 per million output tokens, making it cheaper than some rival AI models.

SpaceXAI’s Grok 4.5 could pressure enterprise AI pricing by offering a lower-cost option for high-volume coding and agentic AI workloads, according to Counterpoint analyst Neil Shah.

Grok Targets Enterprise AI Cost PressureShah said on Thursday that enterprises are facing “token bill shock” as autonomous agents and coding tools consume large volumes of tokens, making AI adoption increasingly expensive.

He said Grok 4.5 enters the market as a fast, “good enough” and cheaper model priced at $2 per million input tokens and $6 per million output tokens, below Anthropic’s Claude Opus 4.8 pricing of $5 for input and $25 for output.

Analyst Sees Multi-Model AI ShiftShah said enterprises are moving toward diversified AI stacks, in which they route workloads based on cost, speed, and accuracy rather than relying on a single model provider.

He said companies could use Claude for complex, high-stakes tasks while using Grok for high-volume developer workflows and repetitive agentic routing.

Shah said Grok’s access to Cursor telemetry data could help it improve through developer interaction feedback.

He added that if Grok maintains its cost advantage while narrowing the accuracy gap, it could reshape enterprise AI economics and pose a new pricing threat to OpenAI and Anthropic.

SPCX Price Action: SpaceX shares were up 0.88% at $149.60 during premarket trading on Thursday, according to Benzinga Pro data.

Photo via Shutterstock

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Space Exploration Technologies (SPCX 1.02%), or SpaceX as most know the company, recently became the largest IPO in history. But investors may not realize just how little of the company is currently trading on the market. SpaceX sold 555.6 million shares to public investors, which sounds like a lot, but it's not. That's only about 4% of the total company.

Major investors, employees, and insiders own the rest. That includes CEO Elon Musk, who owns approximately 42% of the company through a combination of more than 4.8 billion shares and stock options. However, Musk is bound to an extended lockup provision that prevents him from selling any of his shares until June of next year, or 366 days after the IPO.

Here's a look at how these provisions might affect SpaceX stock between now and then.

Image source: The Motley Fool.

SpaceX structured its lockup window to minimize volatility Musk and his companies have an enormous following, especially among individual investors. SpaceX tried to account for this when it planned out its lockup periods. Lockups prevent insiders and major investors from dumping shares on the market once a company goes public. Typical lockups expire after 180 days, but SpaceX has staggered its lockups to minimize volatility in its share price.

There are multiple lockups, not including the extended lockup Musk is subject to.

Investors can sell up to 20% of their stock shortly following SpaceX's second-quarter earnings report, its first since the IPO. Another 28% unlocks following the company's third-quarter earnings report. Investors might be able to sell more, based on how the stock is trading at the time.

Additionally, shares will steadily unlock in 7% increments, regardless of share price, on days 70, 90, 105, 120, and 135 after the IPO. Any remaining shares, excluding the extended lockup, unlock at the traditional 180 days.

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Musk's eventual lockup expiration could weigh on an expensive stock The important point here is that the number of shares available for trading will increase significantly over the next six months. Although it's unlikely that Musk will dump his stake next year, even trimming it to monetize some of his fortune could continue to push lots of new shares into the market a year after the IPO, after a ton of stock has already flooded the market. That could weigh on the share price without sufficient demand to absorb all those additional shares.

It's not the only factor. SpaceX went public amid a ton of hype and excitement, which drove the stock's valuation to pretty lofty heights. The stock still trades at over 100 times its 2025 revenue of $18.6 billion. In other words, there's a ton of room for shares to fall if sentiment turns south. It's a risk worth considering when deciding whether to buy the stock.

Getting added to the Nasdaq-100 is usually a good day for a stock. Funds that track the benchmark have to own it. And for SpaceX (SPCX 1.02%), that meant billions of dollars of forced buying into a company whose public float is only a few percent of its shares.

On paper, that is a lot of demand chasing very little stock.

Yet a day after joining the index on July 7, SpaceX trades about 35% below its high of $225.64, changing hands for less than $147 as of this writing. That is below where the stock started when the company went public in June, in the largest U.S. initial public offering on record. It slipped about 6% in the session right after inclusion, giving back nearly all of its post-IPO gains.

So is the drawdown a chance to buy one of the most talked-about companies in the world at a discount? Or is the slide telling investors something?

Image source: Getty Images.

A classic sell-the-news move In short, this looks like a classic sell-the-news event. Sure, some buying was required because of the index inclusion. But that doesn't prevent investors from selling. And, ultimately, Wall Street seems convinced that shares aren't quite worth the premium they were commanding leading up to the event -- and especially not worth the all-time high they hit shortly after the IPO.

This sell-the-news dynamic following an index inclusion has happened before. Palantir peaked right around its own Nasdaq-100 addition in late 2024, then fell about 25% over the following weeks.

In addition, joining an index can broaden a stock's ownership over time, but it does nothing to change what the underlying business is worth.

And that, of course, is the harder question here.

At the time of this writing, SpaceX carries a market capitalization of about $1.9 trillion, making a shortlist of companies that have ever commanded a value this high. And SpaceX has reached this valuation while still losing money. In 2025, the company generated about $18.7 billion in revenue, up about 33%, so investors are paying around 100 times sales.

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What the $1.9 trillion price demands Sure, there's a real business beneath the company's $1.9 trillion market value.

Starlink, SpaceX's satellite internet service, crossed 10 million active customers earlier this year and brought in more than $11 billion in revenue in 2025, about 61% of the company's total. This is the part of the story I find most impressive: a large, fast-growing subscription business, and the main reason SpaceX can command a price in the trillions at all.

But growth alone isn't the whole story.

SpaceX is deeply unprofitable, reporting a net loss of $4.9 billion in 2025 and $4.3 billion in the first quarter of 2026. A big piece of that traces to xAI, the artificial intelligence (AI) start-up SpaceX absorbed earlier this year. Its AI segment generated $3.2 billion in 2025 revenue but burns far more, and management has floated even bolder plans, including putting AI data centers in orbit. Add the cost of scaling Starship, and free cash flow is deeply negative.

So the price is asking a lot. It assumes Starlink keeps compounding, that Starship's launch cadence ramps on schedule, and that the money flooding into xAI eventually earns a return rather than quietly consuming Starlink's profits.

Any one of those slipping could leave the stock exposed. At about 100 times sales, there is little room for the ordinary stumbles that come with building rockets and AI models at once.

To be fair, this is a singular company. Its assets are hard to copy: a reusable rocket fleet, a satellite network already circling the planet, and a founder who has repeatedly pulled off what looked impossible. For investors who believe SpaceX will own space-based connectivity and compute for decades, a 33% pullback may look like an opening.

I'm not there yet. The drawdown makes the stock cheaper than it was a week ago, but cheaper and cheap are not the same thing. With the company still losing billions, I think its near-$2 trillion market capitalization leaves no cushion at all. I would rather watch SpaceX show that Starlink's profits can outrun its spending before paying up -- even after a sharp one-day drop.

watch now

SpaceX stock closed at $148 on Wednesday, below the company's first trading price of $150 per share for a second day in a row.

Elon Musk's aerospace and defense contractor was included in the Nasdaq-100 index on Tuesday, less than a month after its stock market debut on June 12. The rapid inclusion in the Nasdaq-100 was due, in part, to the exchange's revised rules for new public companies to become part of that widely-tracked benchmark.

The SpaceX inclusion also required index funds and exchange-traded funds that are tied to the benchmark to buy shares of the company in order to match the new lineup.

SpaceX's record initial public offering raised a total of $85.7 billion after underwriters exercised the "greenshoe" overallotment, which allows companies to issue more shares in an IPO when there is greater demand from participants during the initial offering. SpaceX initially offered 555.6 million shares for a set price of $135 each.

The stock soared in the days following its debut, notching a closing high of $201.80 on June 16.

Read more CNBC tech newsChinese lidar maker with Nvidia ties accused of being cyber risk for U.S.China's Alibaba bans Anthropic AI for employees after 'distillation attack' accusationSpaceX President Gwynne Shotwell to donate stock to Trump AccountsMicrosoft cuts 4,800 jobs, as Xbox unit downsizes and plans to spin off four gaming studiosMostly bullish analyst ratings followed the inclusion into the Nasdaq-100.

Morgan Stanley initiated coverage, rating shares of SpaceX as "overweight" with a price target of $300. Bernstein initiated coverage at "outperform" with a price target of $239. RBC initiated with an "outperform" rating and price target of $225. UBS initiated with a "buy" rating and 12-month price target of $210 per share.

Bulls pointed to the company's lead in reusable rocket technology and launch services, its vast Starlink satellite internet service and the potential to improve the margins for both of these businesses.

For growth, analysts pointed to SpaceX's potential to develop artificial intelligence products and services ranging from agentic coding tools to rival Anthropic's Claude or OpenAI's Codex and the development of orbital data centers.

In the more skeptical minority, MoffettNathanson initiated coverage of SpaceX with a neutral rating, and CFRA recommended selling shares.

— CNBC's Michael Bloom contributed to this report.

watch now

SpaceX stock chart.

Space Exploration Technologies (SPCX +1.82%) went public last month, and out of the gate, it was red hot, rising to nearly $226 -- a big increase from the $150 it opened at on its first trading day. Since then, however, the stock, which more commonly goes by just SpaceX, has been falling, and on Tuesday it was back to around the $150 mark again.

The stock has effectively given back those early gains, virtually assuring that just about anyone who bought in those early days is in the red. Has the excitement already faded for the stock, and could it be headed for more of a decline, or is now a good opportunity to buy SpaceX?

Image source: Getty Images.

Trading volumes have come down significantly There was huge interest in SpaceX when its shares began trading nearly a month ago. The new public offering was eagerly anticipated, and investors were looking for ways to gain exposure to the space company even before its shares began trading, including by investing in stocks that had positions in SpaceX. Trading levels were through the roof, but there's clearly less excitement around the stock these days, as volumes have dropped considerably in the past few weeks.

SPCX Volume data by YCharts

Naturally, there will be a bit of a decline after the initial rush to buy an initial public offering. However, with the decline in both the share price and trading volume, it could very well be an indication that investors are beginning to think a bit more carefully about the stock, particularly since its valuation is astronomical. Although it has come down in price, SpaceX stock still trades at around 110 times its trailing revenue.

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SpaceX stock still isn't worth buying Many investors were eager to buy SpaceX stock regardless of how obscene and illogical its valuation was when it began trading, and are now facing losses that could grow even bigger as the stock may still have more room to fall. This is, after all, an unprofitable company, and while it has grand visions for travel to Mars and putting data centers into space, those are highly ambitious objectives that may take many years to become reality, assuming the company can come through on them at all.

SpaceX is the only stock that has a $2 trillion valuation or more, and that doesn't have a highly profitable and successful business. That math on its valuation just doesn't work, and investors who buy without taking that into consideration could incur mammoth losses. The stock's decline may just be getting started.

When SpaceX (SPCX +0.56%) was preparing for its IPO, Morningstar analysts warned investors that the best buying opportunity may not occur immediately.

"We value SpaceX at $63 per share, a 53% discount to the upcoming IPO price," the firm stressed. "Our valuation is the result of mathematics more than skepticism, reflecting a wide range of possible outcomes for the company's financial future."

Ultimately, Morningstar suggested that investors pass on buying into the IPO.

"We think the company has been significantly overvalued and investors will have opportunities to buy the stock at more attractive levels after the IPO," the firm concluded.

While SpaceX stock hasn't quite fallen to its initial IPO price of $135 per share, a steep correction has given investors an opportunity to buy in at a hefty discount to the company's post-IPO highs. Investing now could be a wise decision long term for one key reason.

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Here's why SpaceX stock is attractive after the correction If you're looking to bet on AI, few stocks are as uniquely positioned as SpaceX. Many believe the company to be a rocket maker. And it is. The company's Falcon Heavy rocket has successfully launched more than 600 times, bringing an unprecedented number of payloads to space quickly and relatively cheaply.

But rockets are simply a means to an end for SpaceX. The company, after all, used its rockets to launch its Starlink internet service -- a segment that';s posting positive gross margins and impressive revenue growth rates.

The most lucrative use of SpaceX's rockets long term, however, will be for launching data centers into space -- so-called orbital data centers.

Image source: Getty Images

Experts are split on whether orbital data centers are even possible from an economics and physics standpoint. But SpaceX is perhaps the only company on Earth today positioned to make them a reality.

The idea here is simple: AI could become one of the largest markets in human history. That will only be possible if there are enough data centers to run the computing capacity required for a globally scaled AI economy. Thus, more data centers need to be built.

The problem is that data centers are resource intensive, using massive amounts of land, water, and energy. Putting them into space, at least on paper, has the potential to alleviate most of those terrestrial challenges. With a Starlink connectivity network already in place, SpaceX can easily connect these orbital data centers to ground-based relay centers.

Ark Invest, a major SpaceX shareholder, believes SpaceX could generate $300 billion in annual revenue by the end of this decade by renting computing power from orbital data centers. If that comes to pass, suddenly SpaceX's $2 trillion market cap becomes much more palatable.

It remains to be seen whether SpaceX can actually pull off this major growth opportunity. But the potential is clearly there. And investors looking to go all in on AI stocks should put SpaceX at the top of their watch list.

Just weeks after its initial public offering, Space Exploration Technologies (SPCX 6.83%), aka SpaceX, announced a major acquisition. The Elon Musk-founded space exploration and artificial intelligence (AI) company announced a further pivot toward the latter trend with its plans to acquire Anysphere, the developer of AI coding platform Cursor, in a $60 billion all-stock deal.

So far, this announcement has had a limited impact on SpaceX's stock performance. Shares were pulling back around the announcement and just after, but have started to bounce back of late. Let's take a closer look and see what a deal could mean for SpaceX, which is arguably as much an AI stock as it is a space stock.

Image source: Getty Images.

Why SpaceX "had" to buy Cursor After exercising an option back in April, before it went public, SpaceX became obligated either to acquire Anysphere for $60 billion or else pay it a $1.5 billion termination fee and provide it with $8.5 billion in computing resources.

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But while SpaceX may have been more or less "obligated" to buy Cursor, the price tag may be far more reasonable than it appears at first glance. Given the rich valuation of SpaceX stock, even after its pullback, financing this as an all-stock deal costs existing investors fairly little in terms of dilution. Even if SpaceX prices the Cursor acquisition at its current stock price of around $164 per share, rather than the $200 per share or more it was trading at last month, that would mean a 365.9 million increase in the share count.

Considering SpaceX's current diluted share count of just under 13.2 billion, this means dilution of less than 3%. Having said that, while Cursor's acquisition price may seem like small potatoes compared to the company's more than $2 trillion valuation, it could have a tremendous impact on SpaceX's status as an AI contender.

A potential game changer, but it's still early Once the acquisition closes later this year, SpaceX can begin integrating Cursor's AI coding tool into its own xAI platform. In turn, this could make xAI a more formidable contender against competitors such as Anthropic's Claude and OpenAI's ChatGPT. Still, while it's a potential game changer, expect this deal to have a limited impact on the narrative for now.

Why? For one thing, the deal's closing is months away, after which it will take time for SpaceX to integrate Cursor into its existing xAI ecosystem. Like other AI start-ups, Cursor also remains unprofitable. In the immediate term, this business will only add to SpaceX's overall losses. Moreover, even as this platform is one of the main names in the AI coding space and currently has reached over $2 billion in annual recurring revenue, the competition is heating up as rivals like Anthropic scale up their own AI coding products.

In light of all this, count on catalysts related to other key SpaceX assets and projects, like Starlink and Starship, to have a greater impact on the stock's performance for a while. Right now, SpaceX remains extremely pricey, trading at over 820 times estimated 2027 earnings. As such, you may want to wait for shares to become much cheaper or for further bullish developments to emerge before you consider buying.

On July 7, Space Exploration Technologies (SPCX 6.72%) joined the Nasdaq-100 -- which is the 100 largest non-financial companies by market cap listed on the Nasdaq stock exchange. It also received a $300 price target from Morgan Stanley, one of the Wall Street banks that underwrote SpaceX's initial public offering (IPO).

Being a part of a major index is more than just name recognition. Exchange-traded funds (ETFs) benchmarked to the Nasdaq-100, such as the Invesco QQQ Trust (QQQ 1.85%), will begin buying shares of SpaceX. The more indexes a company can be a part of, the more demand is unlocked from ETF inflows -- the crown jewel being the S&P 500 (^GSPC 0.45%), because the largest ETFs in the world are linked to it.

Here's why SpaceX was added to the Nasdaq-100 so quickly, and why the growth stock is falling anyway.

Image source: Getty Images.

SpaceX will soon be a top holding in the Nasdaq-100 The Nasdaq's new fast-track rules are meant to expedite the inclusion of megacap companies that recently had IPOs. If a company is at least as valuable as the 40th-largest Nasdaq listing, which is a market cap of around $121 billion, it can now be added to the Nasdaq-100 after its 15th trading day. SpaceX has a market cap of around $2 trillion and is the world's seventh-most valuable company -- so it clears the size hurdle with ease.

SpaceX went public on June 12, but markets were closed on Juneteenth (June 19) and July 3. So, it wasn't added to the Nasdaq-100 until over three weeks after its IPO. However, SpaceX's weight in the Nasdaq-100 isn't its market cap. Rather, it is based on a multiple of the float, which is the number of shares available for trading by the public. SpaceX's float is around just 5% of its market cap. But the float could increase rapidly in the coming months.

The vast majority of SpaceX stock is held by insiders who bought in when the company was private -- including institutional investors from previous funding rounds, employees, and founders. SpaceX plans to gradually unlock early-release-eligible shares through a tiered system over the next 180 days, with 20% of shares available for trading two days after the release of its earnings for the quarter ended June 30, and up to 30% if SpaceX's stock price is at least $175.50 per share.

More key unlocking events will occur throughout the summer and fall. And eventually, 100% of the early-release shares will be available for trading by Dec. 9 -- which is 180 days after the IPO date.

Granted, not all insiders will sell their shares and make them available for trading on public markets. Elon Musk and other significant investors have agreed to hold shares for at least 366 days after May 20, the date of SpaceX's Form S-1 filing with the Securities and Exchange Commission. And many early founders still hold large positions in major tech companies, such as Musk in Tesla or Jeff Bezos in Amazon.

Before the recently implemented fast-track process for larger IPOs, the Nasdaq-100 required a free float of at least 10%, meaning at least 10% of the company's shares are publicly tradable. SpaceX should cross that level even if a fraction of early-release-eligible shares are sold and made available on the Nasdaq in the coming months. If I had to guess, I'd expect SpaceX's weighting in the Nasdaq-100 to mirror its market cap by mid-August at the latest.

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The market is always evolving Once SpaceX is weighted by market cap, it will be a top-10 holding in the Nasdaq-100 and account for around 4% of the index. And as more blockbuster IPOs like Anthropic and OpenAI are fast-tracked into the index and reach the float requirements, they, too, could become key holdings. The rapid restructuring of the Nasdaq-100 has undoubtedly piqued the interest of index and ETF investors, especially those who regularly put their hard-earned savings to work in products benchmarked to the indexes.

A common mistake investors will make is assuming that an index is diversified just because it contains hundreds or thousands of stocks. When in reality, the Nasdaq-100 and S&P 500 have become concentrated in a handful of names. And that concentration could increase as megacap IPOs are added.

To stay even-keeled no matter what the market is doing, it's important to heed Peter Lynch's advice about knowing what you own and why you own it. That exercise is straightforward with individual stocks, where an investment thesis can anchor a key holding. But even for ETFs, it's worth recognizing some of the major themes and companies that will drive gains (or losses).

By design, the major indexes can undergo drastic transformations as the economy evolves. A couple of decades ago, major oil companies, industrial conglomerates, and consumer goods companies dominated the largest S&P 500 and Dow Jones Industrial Average (^DJI 0.25%) companies. But the tech sector now makes up a staggering 38% of the S&P 500. And Alphabet just replaced Verizon Communications in the Dow -- meaning that seven of the 30 Dow components have changed seats in the last six years.

SpaceX will continue making waves on public markets SpaceX's growing share of the indexes and lofty price targets from Wall Street banks have more to do with market dynamics than SpaceX's investment thesis. The recent sell-off in the stock is likely due to fading enthusiasm as investors focus more on SpaceX's fundamentals -- which are shaky given its valuation is in the stratosphere.

For the stock to be a good long-term buy for new investors, SpaceX needs to make progress on its bold plans to launch constellations of orbital artificial intelligence compute satellites and build the world's largest chip manufacturing plant in Texas in partnership with Tesla. Until that happens, SpaceX is best kept on a watch list. And investors who want to avoid the stock entirely may want to double-check that the ETFs they hold don't begin buying SpaceX, especially as its float increases in the coming months.

SpaceX stock dropped 6.8% on Tuesday after being added to the Nasdaq-100 Index. (Michael Nagle/Bloomberg)

Valuing Elon Musk’s rocket and artificial-intelligence company SpaceX might be as hard as developing reusable rockets. But with a bevy of new research reports, investors can see how Wall Street approaches the problem.