The supply of SpaceX (SPCX -2.68%) stock is set to soar after the company's quarterly financial update.
*Stock prices used were the afternoon prices of July 22, 2026. The video was published on July 24, 2026.
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
Space Exploration Technologies (SPCX -2.85%) went from being the biggest initial public offering (IPO) in history to one of the worst-performing IPOs in a long time. That's the market at work.
SpaceX was valued at about $1.8 trillion upon going public, but its underlying fundamentals didn't justify that valuation. Hype and hope aren't typically good investment strategies over the long term. Now that the stock has tumbled, it's time to think about when the right investment point might be.
Image source: The Motley Fool.
Let the market work SpaceX stock has given back more than $1 trillion from its peak valuation reached less than a week after it went public. With shares recently trading at about $118, patient investors can now own the stock well below its $135 IPO price and $161 first day closing price. The question now is by how much SpaceX shares might drift lower. It's especially timely to ask that, given its first quarterly earnings report since going public is due on Aug. 4.
First, investors need to realize that SpaceX isn't going to operate like a traditional business going public. It was listed at a valuation that made no sense fundamentally. While the company had about $18 billion in 2025 revenue, those who bought shares at the IPO were looking far into the future for much higher revenue and profit potential.
That helps explain why SpaceX has performed so poorly in its short public life. According to a Barron's analysis, the stock has underperformed compared to 90% of other U.S. IPOs with market capitalizations of $1 billion or more since July 2009.
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Wait a few days after earnings It's hard to judge what a good valuation would be to buy into SpaceX. It has huge potential with its SpaceXAI data center business, not to mention Starship rocket launches and the possibility of orbital data centers.
So one isn't going to make it a value investment where a traditional price-to-sales (P/S) or price-to-earnings (P/E) metric applies. Whether it declines enough to reach a $1 trillion valuation -- or about $76.5 per share -- is impossible to know. But investors do have a sense of the timing that might be appropriate.
SpaceX's initial earnings report will be Aug. 4. That, of course, is an important date to remember. But that report also triggers the start of the company's unique staged lock-up expiration. The actual trading unlock happens two days later on Aug. 6.
At that point, an initial tranche of over 900 million shares will be available for early investors and employees to sell. It seems likely that some will gladly monetize their stake. That would be when I would begin buying a position in SpaceX.
And there's no reason to jump in all at once, either. Investors should review the company's earnings release and then determine a strategy for building a position after Aug. 6.
Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
When Elon Musk's Space Exploration Technologies (SPCX -2.85%) -- commonly known as SpaceX -- priced its IPO at $135 per share, many said it was too expensive. And when it climbed to more than $200/share within a week, they said it was way too expensive.
But now SpaceX's stock has fallen more than 40% from its high and is trading at about $116 per share as I write this, 13.2% below its IPO price. Is this a sign of more losses to come or a buying opportunity? Here's what investors need to know.
Image source: Getty Images.
What goes up... SpaceX's business is built on getting things into space. In 2025, the world sent 3,194 metric tons of stuff into orbit, and SpaceX's flagship rocket launch business carried more than 80% of it.
Currently, the company is preparing its massive Starship megarocket for commercial use. Starship's huge 220,000-pound payload capacity would dramatically lower the cost of putting things into orbit and would almost certainly increase SpaceX's already dominant market share.
Meanwhile, the only profitable part of SpaceX's business, Starlink, has successfully built a vast network of nearly 10,000 communications satellites that provide broadband and mobile services to 10.3 million subscribers across 164 countries, mostly in hard-to-reach areas. This is expected to be the primary driver of profits for the foreseeable future.
The company estimates that these two businesses together only have a total addressable market of about $2 trillion: less than the company's market cap at its peak. Growth is clearly a major part of the valuation here. So, how's that going?
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...must come down In short, not well. SpaceX estimates an eventual $26.5 trillion market for its AI applications, but right now it primarily just sells compute to other companies. Google's parent company, Alphabet, for example, is renting compute capacity from SpaceX for $920 million per month.
That's a good start, but SpaceX's primary argument is that it can launch data centers into space, where it expects to lower compute costs thanks to the higher concentration of solar energy. But that plan can't get off the ground (literally) until Starship comes online. And SpaceX has now failed to launch its (apparently unlucky) 13th Starship test flight twice but intends to try again on Thursday.
Another delay or an unsuccessful launch would almost certainly send the stock lower. And even if this test flight is successful, many more tests and certifications remain before Starship reaches commercial viability.
Additionally, over the next year, various lockups of insider shares will expire, and up to 1 billion additional shares could be awarded through options, settlements, and the like. If and when those shares hit the market, they'll exert downward pressure on the stock. Downward pressure, without any obvious near-term growth catalysts, is a recipe for further share price declines.
Smart investors should probably wait to buy SpaceX shares, as they're likely to continue moving lower in the near term.
Few events capture Wall Street’s imagination like a marquee IPO. The combination of a famous founder, limited public float, and fear of missing out can push newly public companies well beyond what fundamentals alone justify. History is filled with examples, from the dot-com boom to more recent offerings, where excitement lifted valuations before reality eventually took over.
That’s exactly why experienced investors often approach blockbuster IPOs with caution. SpaceX‘s (NASDAQ:SPCX | SPCX Price Prediction) public debut may have compressed that entire cycle into just one month, offering an important lesson before highly anticipated offerings from Anthropic and OpenAI arrive.
SpaceX’s IPO Hype Meets Reality The buildup to SpaceX’s public debut was unlike almost anything investors have seen in years.
After pricing its IPO at $135 per share, SpaceX opened its first day of trading at $150 before enthusiasm pushed the stock as high as $225 in the days that followed. For a brief period, it seemed every investor wanted a piece of Elon Musk’s latest empire.
That enthusiasm has faded just as quickly. SpaceX now trades around $113 per share — roughly 50% below its post-IPO high and 16% below its original offering price. The reversal has been swift, but it isn’t unprecedented.
History shows that many high-profile IPOs struggle once the initial excitement wears off. Sometimes that adjustment happens over six months or a year. In SpaceX’s case, the process unfolded in a matter of weeks.
Let’s also remember that the next phase may not be over. Lockup agreements that prevent insiders from selling their shares begin expiring next month. Those expirations often increase selling pressure as early investors and employees finally gain the ability to cash out. Some newly public companies don’t establish lasting bottoms until months — or even several years — after their debuts as they prove they can consistently grow into lofty valuations.
Musk’s Wealth Rose Just as Fast as It Fell The dramatic swings in SpaceX also produced one of the largest paper wealth gains — and losses — in history.
According to Bloomberg’s Billionaires Index, Elon Musk’s estimated net worth began the year near $630 billion before the SpaceX IPO frenzy briefly pushed his fortune above $1.3 trillion. As SpaceX retreated, that paper wealth evaporated just as quickly. By Friday, Bloomberg estimated Musk’s fortune at approximately $718.8 billion, representing a decline of roughly $600 billion in about a month.
Musk himself seemed to acknowledge the reversal with characteristic humor, posting simply on X: “(Former) Trillionaire.”
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Of course, Musk never had $1 trillion sitting in a bank account. Like virtually every billionaire, the overwhelming majority of his wealth consists of ownership stakes whose values fluctuate every trading day.
The Bigger Lesson Isn’t About Musk No one is likely to launch a GoFundMe campaign for Elon Musk. Yet the episode illustrates how quickly headline-grabbing wealth figures can change.
Political rhetoric often treats billionaire wealth as though it were static. In reality, fortunes tied to publicly traded companies can rise or fall by hundreds of billions of dollars without a single share being sold. Wealth is dynamic, not fixed.
More importantly, economies generally grow by encouraging innovation rather than limiting it. Musk’s companies illustrate that point. Tesla (NASDAQ:TSLA) helped accelerate mainstream electric vehicle adoption after decades of failed attempts by others. SpaceX has transformed commercial spaceflight and lowered launch costs. Even X has become a platform where users can share viewpoints that are suppressed or might receive less visibility elsewhere.
Granted, reasonable people can disagree about Musk’s leadership style or his public statements. But creating businesses that generate jobs, technological advances, and shareholder value is ultimately how wealth is created in the first place.
Key Takeaway In short, the biggest lesson from SpaceX’s volatile debut isn’t that Elon Musk lost his trillionaire status. It’s that IPO euphoria rarely lasts forever.
Smart investors have long been warned against chasing blockbuster offerings during their first days of trading, and SpaceX demonstrates why. Better entry prices often emerge once excitement fades and markets begin focusing on fundamentals instead of headlines.
With Anthropic and OpenAI both expected to launch blockbuster IPOs in the coming months, investors would do well to remember that patience has historically been one of the market’s most valuable investing tools.
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Down 15% from June's initial public offering price and more than 30% below its post-IPO peak, it's safe to say many investors are more than a little disappointed in Space Exploration Technologies' (SPCX -2.85%) -- you know it better as SpaceX -- shares so far.
So now what? Is it worth buying or continuing to hold at its current price? Or, should investors take the recent weakness at face value and throw in towel on this ticker?
Maybe something in between.
History says With the dust of this mid-June IPO finally settling, it's time to say out loud what most people have only been quietly thinking to themselves. That is, like almost all other major initial public offerings for the past three decades, this one was buoyed by hype that was never built to last.
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The stock could continue sinking before finding a bottom, too. Brokerage firm Edward Jones reports that between 2011 and 2020 -- a period when then-Facebook Meta, Peloton, Snapchat parent Snap, and Twitter (now X) all went public -- the average newly minted technology stock was down 14% from its IPO price just six months following its public offering. Again, IPO hype has an all-too-familiar pattern. Never mind the end of the lockups keeping current SPCX shareholders from shedding their now-deteriorating positions, which, of course, would only add to the selling pressure.
Longer-term, still a long shot Just don't feel like you necessarily need to forego a stake in SpaceX forever. Post-IPO performance numbers from Nasdaq Economic Research indicate that between 2010 and 2020, newly public companies generating annual revenue in excess of $100 million end up, on average, at least keeping pace with the broad market's gains, if not slightly beating them.
Image source: Getty Images.
Still, take that information with a grain of salt. While the average three-year performance is positive, this average is skewed by a small handful of overperformers. Nearly two-thirds of these stocks were still in the red three years after their IPO.
In other words, don't bet the farm if you decide to go bottom-fishing.
James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Peloton Interactive. The Motley Fool has a disclosure policy.
After weeks of waiting, investment management firm Vanguard finally updated the holdings of its 48 passively managed equity exchange-traded funds (ETFs).
Unsurprisingly, Space Exploration Technologies (SPCX -2.85%) popped up in the Vanguard Total Stock Market ETF, the Vanguard Growth ETF, and the Vanguard Mega Cap Growth ETF, among others.
By far the biggest surprise was that, as of June 30, SpaceX is the No. 1 holding in the Vanguard Extended Market ETF (VXF -0.28%), ahead of 3,371 other stocks.
This is no small ETF by any means -- the Vanguard Extended Market ETF has $97.7 billion in net assets and traces its inception date back to December 2001.
Here's why SpaceX is now the top holding of the Vanguard Extended Market ETF and how it compares to the other Vanguard ETFs that bought SpaceX in June.
Image source: Getty Images.
SpaceX is making waves in the ETF world The Vanguard Extended Market ETF's 6,775,494 shares of SpaceX were valued at $1.158 billion as of June 30. The fund includes a blend of small- and mid-cap stocks, with a few large caps sprinkled in. So you may be wondering why a stock like SpaceX is in the ETF, given it has a $1.63 trillion market cap and is one of the 10 largest U.S. companies by market cap.
SpaceX's initial public offering was the largest in history based on SpaceX's valuation. But SpaceX raised just $75 billion by selling 555 million shares at $135 each and another $10.7 billion from underwriters with options to buy additional shares -- far less than its valuation. So the number of shares available for public trading on the Nasdaq -- known as the float -- is only around 5% of SpaceX's total shares outstanding.
Because SpaceX's float is such a small percentage of its market cap, the rules-based S&P 500 Completion Index that the Vanguard Extended Market ETF is modeled after probably classified SpaceX as something other than a megacap stock. This is why SpaceX was pole-vaulted to the fund's top holding in a matter of weeks.
These same market dynamics are why SpaceX makes up such a small percentage of funds like the Vanguard Growth ETF. If SpaceX were weighted by market cap, it would have a weighting similar to Meta Platforms at about 3.4%. Instead, SpaceX is just 0.29% of the fund, weighted by a multiple of its float rather than market cap.
NYSEMKT: VXFVanguard Index Funds - Vanguard Extended Market ETF
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The IPO wild west is just beginning Float-based market cap weightings are effective because they act as a check-and-balance system on ETF demand. If SpaceX were weighted by market cap, then ETFs would artificially drive up its price, given how few of its outstanding shares are available for trading on the Nasdaq. But the pattern in which passively managed Vanguard ETFs are buying SpaceX showcases the imperfect system of megacap IPOs.
As SpaceX gradually unlocks shares starting Aug. 6, investors can expect it to make up a larger share of well-known ETFs like the Vanguard Growth ETF and Vanguard Total Stock Market ETF. But that larger float will also likely trigger SpaceX's removal from the Vanguard Extended Market ETF.
How ETFs are responding to SpaceX is a reminder to always understand what you're buying and why you're holding it. In the case of the Vanguard Extended Market ETF, I wouldn't be surprised if it dumped its entire SpaceX holding before the end of the year, but also had a short period where upcoming megacap IPOs like Anthropic and OpenAI would become top holdings, only to eventually be removed from the ETF.
HomeIndustriesTelecommunicationsTelecom StocksTelecom StocksIt would likely be too expensive and time-consuming for SpaceX to build a mobile network on its own. But the major wireless carriers have to hope one of their rivals doesn’t sell out.July 25, 2026, 8:00 a.m. ET
Ever since T-Mobile and Sprint merged in 2020, the U.S. wireless-communications market has operated as a comfortable oligopoly. But lately, investors have worried that Elon Musk’s SpaceX plans to disrupt what’s been a predictable market for telecommunications services.
SpaceX’s SPCX Starlink business has so far been a niche provider to rural areas. But the company’s initial-public-offering prospectus in May revealed that Starlink Mobile has ambitions to massively penetrate suburban and urban markets too — with the goal of providing better connectivity than what can be offered by cell towers on the ground.
SpaceX (NASDAQ: SPCX) could decline to $50 per share between August 2026 and the first half of 2027 if a series of bearish catalysts align, according to ChatGPT.
Notably, the AI model does not consider a drop to $50 the most likely outcome. However, it believes the risk becomes more significant if insider selling accelerates after lockup restrictions are lifted, earnings disappoint, and progress on Starship remains delayed.
The assessment comes after SpaceX stock fell about 50% from its post-IPO high above $225 to trade around $115 as of press time.
SpaceX 30-day stock price chart. Source: Finbold ChatGPT identified August through October 2026 as the period most likely to trigger another major decline.
The company is scheduled to report second-quarter earnings on August 4, while more than 911 million previously restricted shares are expected to become eligible for sale shortly afterward.
A combination of weaker-than-expected financial results and heavy insider selling could increase downward pressure on the stock as the market adjusts to a significantly larger share float. Additional lockup expirations expected in 2027 could create a second period of elevated volatility.
Odds of SpaceX stock dropping to $50 Despite these risks, ChatGPT believes SpaceX’s business fundamentals reduce the probability of a collapse to $50.
In this line, Starlink has become the company’s primary earnings engine, generating approximately $3.26 billion in quarterly revenue and about $1.19 billion in operating income. Meanwhile, SpaceX continues to dominate commercial launch services and is expanding its presence in government and defense contracts.
The company generated roughly $18.7 billion in revenue during 2025, representing annual growth of about 33%.
Based on current fundamentals, ChatGPT views a trading range of $90 to $130 as the most likely outcome over the coming months, assigning a 45% probability to that scenario.
The model estimates a 30% chance of the stock falling to between $70 and $90 and a 15% probability of a decline into the $50 to $70 range. The likelihood of SpaceX falling below $50 is estimated at 10%.
SpaceX stock price prediction. Source: ChatGPT SpaceX stock sell-off explained Meanwhile, the recent selloff has been driven largely by concerns over valuation and increasing share supply rather than weakening business performance.
Following its June IPO at $135, SpaceX surged above $225 as investors piled into one of the market’s most anticipated listings. Sentiment later shifted as attention turned to upcoming lockup expirations and the company’s premium valuation.
Starship delays have also weighed on the stock, as the program remains central to SpaceX’s long-term growth strategy.
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Space Exploration Technologies (SPCX -2.68%) took off like one of its Falcon 9 rockets in the immediate days following its initial public offering on June 12, 2026. That IPO was one for the record books, ranking as the largest ever.
Since then, though, SpaceX's sizzle has fizzled. Actually, its performance looks almost identical to past mega-IPOs. And one thing usually happens next, if history repeats itself.
Image source: Getty Images.
A familiar pattern I looked at the 10 largest past IPOs. SpaceX's trajectory has followed the paths of several of them. For example, the space stock jumped roughly 19% on its first day of trading -- almost exactly the historical average for mega-IPOs.
SpaceX's subsequent performance perhaps tracks most closely with another highly anticipated IPO. Facebook, now Meta Platforms (META -1.80%), listed its shares on the Nasdaq stock exchange on May 18, 2012. The social media stock plunged more than 30% over the next few weeks before rebounding somewhat.
That's what we're seeing unfold with SpaceX. Shares of Elon Musk's space technology company fell more than 30% after rising immediately following the IPO. The stock has bounced back a little since bottoming out, though.
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Two potential paths What usually happens with mega-IPO stocks after their initial declines? Historically, there have been two paths.
Facebook/Meta Platforms represents the more attractive of the two paths. Although the stock performed dismally for most of 2012, it eventually roared back. By the end of 2013, Facebook's shares were up more than 40%.
Patient investors who held onto the stock were richly rewarded. An initial investment of $10,000 in Facebook when it first began trading would be worth more than $169,000 today.
Alibaba Group Holding (BABA -1.68%) is an especially disastrous example of the other path for mega-IPO stocks. When Alibaba listed its shares on the New York Stock Exchange on Sept. 19, 2014, it ranked as the largest IPO in U.S. history at the time. Although the Chinese tech stock struggled for a while, it had more than tripled by late 2020.
But then the bottom fell out for Alibaba. Multiple issues derailed the company's growth. The stock is now down more than 60% below its peak. Since its IPO, Alibaba has delivered a positive return of around 27%, less than one-tenth the S&P 500's return during the period.
If SpaceX continues to track with previous mega-IPOs, it's likely to experience significant near-term volatility. The company's staggered post-IPO lock-up release schedule could complicate matters, with the prospects of insider selling over the next few months potentially creating downward pressure on SpaceX's share price.
Eight of the 10 largest U.S. IPOs have underperformed the S&P 500 (^GSPC +0.05%) since the companies went public. SpaceX could become the ninth member of this group, but this fate isn't guaranteed.
The company's Starlink satellite internet services unit has a real opportunity to disrupt the wireless services market dominated by telecom giants such as AT&T (T +5.10%), T-Mobile (TMUS +5.78%), and Verizon Communications (VZ +5.84%)
SpaceX's Starmind initiative, though, could be the game changer that makes it more like Meta than Alibaba. Starmind's goal is to launch up to 1 million satellites that process artificial intelligence (AI) workloads. The results from these AI processes would then be beamed back to Earth stations.
While that might sound like something from a science fiction novel, Musk and the SpaceX team believe they can resolve the technological challenges and make it happen. If so, the competitive advantages Starmind would offer -- including low energy costs from solar power -- could make SpaceX the most powerful player in the AI data center market.
The bottom line is that no one knows for sure which path SpaceX will take over the next few years. The company's destiny won't be dictated by past IPOs, even if its current trajectory looks eerily similar to some of them.
SpaceX launched its massive Starship rocket Friday evening from its company town and launch facility in Starbase, Texas, in a 13th test flight and the first since the company's record IPO last month.
The rocket's Super Heavy booster detached from the Starship spacecraft about two minutes into the flight, and made a controlled splashdown in the Gulf.
In a statement following the flight, SpaceX said the landing was not perfect as the booster, "attempted to relight its engines for the landing burn," but only a subset successfully ignited before the "hard splashdown."
The upper stage of the rocket made a "soft splashdown" in the Indian Ocean, SpaceX said, "coming to rest intact in the Indian Ocean and providing critical views of an intact heatshield for the first time."
Employees called the test flight "lucky number 13," in a livestream of the event.
Elon Musk's aerospace and defense contractor designed Starship, the largest rocket ever built or flown, to be fully reusable and to lift more cargo for less cost into orbit. Starship is considered crucial for the company's goal to vastly expand its Starlink satellite network, among other missions.
About 18 minutes into Friday's test flight, SpaceX successfully deployed 20 of its new Starlink V3 satellites into orbit, a first chance for the company to see how they performed in flight. The satellites were intended to burn up after about 20 minutes.
The new satellites, produced at a SpaceX facility in Redmond, Washington, are built to be larger, and more powerful than Starlink's earlier satellites. They're also equipped with solar arrays that generate twice as much power as prior generations, a SpaceX business analyst explained in a livestream.
SpaceX is now developing Starmind satellites, which the company intends to launch and eventually use as orbital data centers.
Besides using their largest rockets to launch the new, larger satellites, SpaceX wants to use the Starship rocket to bring U.S. astronauts back to the moon's surface, and to eventually power manned missions to Mars. The company is preparing Starship for a major NASA test flight next year.
Friday's test flight marked the second for Starship V3, the latest version of the rocket.
TMF Associates' Tim Farrar, a satellite services industry expert, said the test flight showed SpaceX has made some progress with Starship but "remains a long way from achieving rapid reusability of the entire ship." He pointed to problems SpaceX had relighting its Raptor engines on Friday. "Any similar failure during an attempted landing at the company's launch site could cause severe damage to the launchpad," he said.
In a post on X, which is owned by SpaceX, the company said it delayed an earlier test flight planned for Thursday "due to weather." It also previously scrubbed a test flight on July 16, after the rocket's booster triggered a hold, which "shut down the engines right as they were starting to ignite," a SpaceX employee said during a livestream of the earlier event.
SpaceX's stock has dropped in four of the past five weeks, slumping 43% from its peak close on June 16.
Item 1 of 3 The Pad 2 chopsticks hoist Starship 40 at the SpaceX launch complex to stack the spacecraft atop booster 20 as preparations continue for the second attempt of the 13th test flight of the Starship spacecraft and the Super Heavy v3 booster in Starbase, Texas, U.S., July 22, 2026. REUTERS/Steve Nesius
[1/3]The Pad 2 chopsticks hoist Starship 40 at the SpaceX launch complex to stack the spacecraft atop booster 20 as preparations continue for the second attempt of the 13th test flight of the Starship... Purchase Licensing Rights, opens new tab Read more
WASHINGTON, July 24 (Reuters) - SpaceX's (SPCX.O), opens new tab Starship rocket lifted off from Texas on Friday and deployed its first 20 upgraded Starlink satellites into suborbital space, one of many testing goals in the company's 13th test mission as it races to begin routine service with the rocket by the end of the year.
The roughly 400-foot-tall (122 m) Starship rocket system blasted off around 6:50 p.m. ET from SpaceX's Starbase company town, with the Super Heavy first stage booster sending its Starship upper stage on a suborbital trajectory. The roughly hour-long mission will conclude with Starship's reentry through Earth's atmosphere and a splashdown in the Indian Ocean.
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As Starship approached 16,400 miles per hour (26,400 kph) in space some 10 minutes into its flight, the Super Heavy booster returned to Earth and impacted the Gulf of Mexico harder than expected, SpaceX said, though it had reignited more engines than its botched return in May during a previous test flight.
The Starship test flight is SpaceX's 13th since 2023, featuring a new version of the rocket crucial to the company's plans to expand Starlink, land humans on the moon for NASA and eventually deploy thousands of artificial intelligence-processing satellites in orbit.
Twenty minutes into its spaceflight, Starship began deploying 20 Starlink V3 satellites, dispensing them one by one via the ship's "Pez"-like payload deployment. Flying over a shadowed Earth, thunderstorms with flashes of lightning were visible in the background 118 miles (190 km) below, according to a camera fixed to the rocket and streamed live by SpaceX.
A crowd of SpaceX engineers in SpaceX's Hawthorne, California, facilities could be heard on the live stream cheering at the rocket's mission milestones, at one point chanting "USA."
While in space, the Starlink satellites — a new "V3" version with greater bandwidth capabilities — will deploy solar arrays and antennae to briefly connect with SpaceX's Starlink network of some 10,000 satellites orbiting above.
The Starlinks are the first to be deployed by Starship, though they will follow the ship's suborbital trajectory into Earth's atmosphere and burn up.
Some of them have spotlights and cameras that will record Starship's heat shield as it hits intense atmospheric friction later in the mission, giving SpaceX key testing insight into how well the rocket survives its return from space.
SpaceX plans to use Starship by the end of 2026 to begin launching thousands of Starlink V3 satellites, expanding the constellation's capacity to be able to connect directly to mobile devices such as cell phones. The current network only connects to Starlink-branded dishes.
Reporting by Joey Roulette; Editing by Chris Reese
Our Standards: The Thomson Reuters Trust Principles., opens new tab
Joey Roulette is a space reporter for Reuters covering the business and politics of the global space industry, often focusing on space power competition and how commercial interests intersect with international relations. He was part of a team that won the 2024 Pulitzer Prize in national reporting for Reuters' coverage of Elon Musk's business empire. On the space beat for roughly a decade, Joey previously worked for the New York Times, the Verge, and various publications in Florida.
Investors betting on SpaceX SPCX shares are buying into more than just reusable orbital rockets and a global satellite internet network – they are purchasing a ticket to the visionary leadership of Elon Musk.
However, according to a recent analysis from HSBC, that celebrated “Musk factor” may already be fully priced into the equity.
Analysts at the bank initiated coverage on the aerospace pioneer with a Hold rating and a $115 target price, indicating absence of any meaningful upside from current levels.
Note that SpaceX stock has been in a sharp downtrend in recent weeks. At writing, it’s trading even below its IPO price of $135.
Standard financial formulas used for traditional conglomerates, SPACs, or biotech firms simply fail to reflect how the market rates elite founders who reshape global industries.
To capture this reality, HSBC departed from classic metrics and built a custom sum-of-the-parts model featuring a 2x “innovation premium”.
The benchmark for this multiplier was drawn directly from Tesla’s first decade on public markets, leveraging Musk’s established track record in disruptive manufacturing and commercial deployment.
The bank noted that while analysts often apply holding company discounts, special founder premiums are warranted when leaders consistently upend whole sectors.
Yet even with this generous multiplier factored in, HSBC concludes that current market prices leave very little room for short-term upside on SPCX shares.
The core takeaway from HSBC’s base-case framework is that today’s market valuation already anticipates seamless execution across SpaceX’s main business pillars.
Investors have fully embedded expectations for Starlink's expanding global subscriber footprint, high-frequency Falcon launch manifests, and early-stage spatial artificial intelligence initiatives.
However, the report cautions that for SpaceX shares to breach higher territory, the company must overdeliver; HSBC did outline an optimistic “blue sky” scenario valuation of $293 per share.
But achieving it requires aggressive operational milestones: commercial viability for the next-generation Starship rocket by 2027, doubling overall launch throughput relative to base estimates, extracting significantly higher average revenue per user (ARPU) from Starlink, and securing top-tier software multiples for its internal AI infrastructure.
While long-term bulls point to that $293 optimistic view, short-term realities on the trading floor reflect heightened scrutiny.
SPCX stock has faced headwinds following technical delays around its pivotal 13th Starship test flight and market anxiety over massive insider share unlock periods approaching in August.
While institutional backers continue to view Starship as the key to unlocking exponential payload scale, HSBC’s balanced stance highlights that execution risks cannot be ignored.
Until SpaceX consistently proves out Starship's full orbital reusability and commercial monetization, the stock appears bound to its fundamental trajectory, leaving the famous Musk premium firmly baked into the price for now.
At 6:45 p.m. ET tonight, SpaceX (SPCX -2.85%) gets a third try at its most consequential launch as a public company. Starship Flight 13 has a 90-minute window to lift off from the company's Starbase site in Texas, carrying the first 20 next-generation Starlink V3 satellites.
"Some of the engines didn't start, triggering an automatic launch abort," CEO Elon Musk wrote on X after the first attempt on July 16. SpaceX swapped out engines, and then weather postponed the second try on Thursday.
The stock could use the win. Shares sit at about $112 as of this writing, roughly 1% above their all-time low of $110.85 and well below the $135 price from June's initial public offering (IPO).
Image source: The White House.
What tonight actually decides is the timeline of Starlink's next capacity leap. Each V3 satellite is designed to deliver about 1 terabit per second of downlink capacity, roughly 10 times what the current generation of satellites provides. A full Starship load of about 60 of them would add roughly 60 terabits per second to the network, about 20 times what a Falcon 9 launch delivers today. That capacity is what lets a satellite network sell faster service to more subscribers without congestion. It's the foundation of the company's plan to turn Starlink into a gigabit-speed internet provider.
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The satellites can only ride on Starship, though, and Starship has kept them grounded for eight days now. The 20 satellites aboard are a deployment test: They will extend their solar arrays and antennas and attempt to connect with the larger Starlink constellation. Until that demonstration works, the V3 capacity ramp stays theoretical.
A successful flight tonight won't settle the argument over the stock, which still carries a market value near $1.5 trillion against a business that loses money. The next major financial update arrives Aug. 4, when SpaceX is scheduled to report its first quarterly results as a public company. But a clean deployment would show the next generation of the company's biggest product working in space before those numbers land. After six weeks of nearly uninterrupted decline, that would count as the first hard piece of good news this stock has had.
Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The Trump Administration has not been shy about taking ownership stakes in what it views as critical suppliers of goods and services key to U.S. interests.
In recent years, the U.S. government has taken interests in semiconductor giant Intel Corp. (INTC -6.45%), rare-earth miner MP Materials (MP -7.26%), and lithium producer Lithium Americas Corp. (LAC -2.23%).
"The U.S. government has negotiated stakes in dozens of companies," reports CNBC. "Some U.S. ownership stakes have been opportunistic, while others have been a part of a broader economic strategy."
Now, there's a rising belief that the U.S. government will take ownership stakes in key artificial intelligence companies. Last month, Senator Bernie Sanders wrote an opinion piece for The New York Times suggesting that citizens consider nationalizing certain powerful companies that control critical AI technologies.
Image source: Getty Images.
"Artificial intelligence will almost certainly be the most transformational technology in the history of the world," Sanders wrote. "The question, then, is not whether A.I. will change the world. It will. The question is: Who will own and control that future? Who will benefit from it, and who will be hurt by it?"
Sanders's solution is to establish a sovereign wealth fund that can facilitate such direct stakes. AI investors should take note.
"I will soon be introducing the American A.I. Sovereign Wealth Fund Act," Sanders revealed. "This legislation would give the public a direct ownership stake in the largest A.I. companies in our country. How? It would create a sovereign wealth fund through a one-time 50 percent tax -- not on the profits of OpenAI, Anthropic, xAI and other companies, but paid with something far more valuable than that: the stock."
Sanders specifically lists xAI -- the AI division of Space Exploration Technologies (SPCX -3.49%) -- as a potential target of partial nationalization. How seriously should investors be taking this? Betting markets offer some insight into what might happen next.
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Previous to SpaceX's historic IPO, betting markets were surprisingly bullish on the U.S. government nationalizing the company. In August of 2025, for example, certain betting markets had odds of the space company being nationalized by January of 2027 at around 11%, though limited trading volumes make this somewhat suspect.
As the year has rolled on, however, the odds of SpaceX being nationalized by the start of next year have consistently fallen. Current odds hover at roughly 4%. Considering the track record for things like this in prediction markets, it's fair to say that these are just guesses.
Of course, the government could always begin nationalization -- or at least the process of taking a direct stake -- after January of 2027. We just don't have betting markets for predicting such a situation. But if recent history is any indication, investors should not be surprised to see governments more directly involved in the AI sector's evolution.
HomeIndustriesAerospace/DefenseThe newest timeline has Starship due to take flight on FridayJuly 24, 2026, 1:17 p.m. ET
SpaceX's Starship rocket launch has faced a number of delays. Photo: Ronaldo Schemidt/Agence France-Presse/Getty ImagesSpaceX shares are headed for their ninth down day in the past 11 sessions as delays with the Starship rocket weigh on investor sentiment.
The aerospace company had initially planned for Starship to return to flight a week ago, less than a month after the rocket’s 12th test. But it was forced to abort the test after facing issues with its engines.
SpaceX stock is showing downward bias. Where are SPCX shares going? HSBC Says the Stock Has Already Priced In the Growth StoryHSBC analyst Nicolas Cote-Colisson initiated coverage of SpaceX Thursday with a Hold and a $115 price target, a level that lands beneath the company’s $135 IPO price.
The analyst looked at Tesla’s share price trajectory across its first decade as a public company as the most relevant benchmark for sizing the premium investors assign to disruptive technology companies under his leadership.
Even with that generous premium baked in, HSBC concluded the base case valuation accounts for Starlink’s continued subscriber expansion, a growing volume of launch activity and the early development of SpaceX’s artificial intelligence initiatives, suggesting those drivers are already reflected in the price rather than representing incremental upside.
SPCX Breaks From Sector Action as Communication Services Moves HigherThe gap widened as the session moved forward. SPCX slipped while Communication Services gained 0.88% and finished third out of the eleven sectors. That kind of divergence suggests the market is treating SPCX as its own risk category, driven more by name‑specific exposure than by sector beta.
The sector’s recent performance also explains why rallies can fade quickly when the Nasdaq weakens. Communication Services has fallen 8.23% over the past 90 days, a decline that encourages traders to stay skeptical and opportunistic. In that environment, any wobble in the broader tape can turn into a sell‑first moment.
From Rockets to Starlink to AI: The Narrative Stack Keeps GrowingSPCX has always carried a large storyline. Founded in 2002 and widely known as SpaceX, the company builds and operates reusable rockets that carry government and commercial payloads into orbit. In 2019, it added another layer by launching its own satellite network under the Starlink brand to provide mobile broadband and wireless connectivity.
SPCX Shares Are DippingSPCX Price Action: SpaceX shares were trading 3.53% lower at $114.07 at the time of publication on Friday. The stock is near its 52-week low of $110.85, according to Benzinga Pro.
Image: Shutterstock
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On June 12, Elon Musk's Space Exploration Technologies (SPCX -4.87%) completed the largest initial public offering (IPO) in history. SpaceX stock initially opened on the Nasdaq at $150, valuing the company at north of $2 trillion. Just weeks later -- on July 7 -- the company was fast-tracked into the Nasdaq-100 index.
Let's analyze how SpaceX stock has held up since joining the Nasdaq-100 and assess what a $5,000 investment made at that time is worth today.
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What is the Nasdaq-100 index? The Nasdaq-100 is an index that includes around 100 of the largest nonfinancial companies listed on the Nasdaq Exchange, using a modified market capitalization weighting system. Investors can track the index through exchange-traded funds (ETFs) such as Invesco QQQ, making inclusion an event that triggers automatic buying from passive funds.
How has SpaceX stock performed since joining the Nasdaq-100? SpaceX stock closed at $149.47 after its first trading day as a member of the Nasdaq-100. By the closing bell on July 22, shares had dropped to $115.26 -- a decline of 23%.
Several factors have put pressure on SpaceX stock recently. These include profit-taking after the initial IPO hype faded, questions about the company's lofty valuation, and scrutiny over its aggressive capital expenditures and their impact on its operating losses.
Image source: Getty Images.
Breaking down the implications of an investment in SpaceX A $5,000 investment in SpaceX stock made at its closing price on July 7 would now be worth about $3,856. This loss illustrates the types of sharp swings that volatile growth stocks can undergo, even after hitting positive milestones.
SPCX data by YCharts.
Some SpaceX shareholders might consider cutting their losses if the stock's decline exceeds their comfort level. However, investors with a long-term mindset may employ a buy-and-hold approach or selectively add to their SpaceX positions on further dips to lower their cost basis.
While no single strategy fits every situation, smart investors understand that disciplined risk management remains essential, particularly when it comes to companies with lofty valuations, high expectations, and the inherent uncertainties that come with those attributes.
Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
When a company has its initial public offering (IPO), its shares begin trading on the open market, and the shares that insiders (such as investors, employees, and founders) own officially have value. However, those insiders aren't allowed to sell shares immediately; they have to wait until the designated lockup periods end.
Space Exploration Technologies (SPCX -4.78%), better known as SpaceX), executed the largest (and arguably most hyped) IPO in stock market history, initially trading with a $1.77 trillion valuation. And after being invested and working for years or decades, you can bet plenty of insiders are ready to cash in and make moves on that house or dream car they've been eyeing.
Here's what you should know about SpaceX's lockup cliff.
Image source: The Motley Fool.
How SpaceX's lockup cliff is scheduled When SpaceX had its IPO, only around 4% of its shares were made available to the public. The rest will be gradually released as key dates are reached. Here is SpaceX's current lockup period schedule and how many shares are expected to be released at each point.
Key DatesDays Post-IPOSupply ReleasedAug. 6, 202655 days20% to 30%Aug. 20, 202670 days7%Sept. 9, 202690 days7%Sept. 24, 2026105 days7%Oct. 9, 2026120 days7%Oct. 24, 2026135 days7%Late October or early November 2026 (Q3 earnings)TBD28%Dec. 8, 2026180 daysRemaining employee balanceFebruary 2027 to August 2027240 to 420 days100% of institutional investorsJune 12, 2027366 days100% of Elon Musk's stake Data source: SpaceX's 424B4 filing.
SpaceX is scheduled to release its first earnings report on Aug. 4, which will trigger the first set of share unlocks, slated to happen on Aug. 6.
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How will SpaceX's stock perform after its initial lockup period? We can't predict how any stock will perform, but generally with an IPO, we see more volatility because insiders are unloading some of their shares. If you worked for a company for a decade or made an early investment, you likely want to see that work turn into cash and not just a number on paper.
With more people selling shares than buying, SpaceX's stock could take a temporary hit. Of course, this assumes insiders want to offload shares, which might not be the case, but chances are many will want to cash in while the stock is valued so highly (though it's trading lower than its initial IPO price as of July 21).
There's no need to rush to invest in SpaceX right now. Waiting until after the first one or two lock-up periods have expired is a smart choice for most investors.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPCX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Elon Musk's SpaceX is turning away satellite operators that want a ride to space on its Falcon 9 rocket, instead focusing on its unproven Starship vehicle. Bloomberg's Sana Pashankar reports.
Most of the buzz lately around Space Exploration Technologies (SPCX -3.32%) centered on its artificial intelligence (AI) ambitions, including the Grok chatbot it absorbed and its plans for data centers in orbit. Those headlines are exciting.
But the initial public offering (IPO) from SpaceX (as the company is also known) points to a prize that could ultimately matter more: a connectivity opportunity that the company pegs at roughly $1.6 trillion.
Image source: Getty Images.
The connectivity opportunity That $1.6 trillion figure comes from Starlink, SpaceX's satellite internet business, and it breaks down into two pieces. The company sees about $870 billion in fixed broadband -- beaming internet to homes and businesses the ground network cannot easily reach -- and roughly $740 billion in mobile services.
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Starlink is already the workhorse of SpaceX, serving more than 10 million customers and generating the bulk of the company's revenue. The next leg of growth is Starlink Mobile, the effort to connect ordinary smartphones directly to satellites and, in time, challenge traditional wireless carriers around the world.
Here is why I think connectivity could overshadow the AI story. The vision for an orbital data center is genuinely bold, but it is years away, unproven at scale, and still burning cash.
Starlink, by contrast, is real, growing fast, and already profitable. Connecting the billions of people who lack reliable internet, plus giving every phone a signal in dead zones, is a tangible, enormous market that SpaceX is capturing right now. When one business is a working, cash-generating machine and the other is a promising experiment, the working one usually deserves the spotlight.
The catch worth naming I would keep the trillion-dollar figure in perspective, though. That $1.6 trillion is a long-term addressable market, not revenue that SpaceX will book anytime soon. Skeptical analysts note that spectrum limits, cell-site capacity caps, and the physics of beaming data to unmodified phones could hold realistic mobile revenue to a small fraction of the headline number for years.
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Wireless carriers are also banding together to blunt Starlink's reach, and rivals like AST SpaceMobile are chasing the same satellite-to-phone dream. Turning a giant market into actual profit will take enormous capital and flawless execution.
The takeaway for investors SpaceX's AI vision will keep grabbing attention, but connectivity may quietly be the engine that powers the company's long-term value. For investors weighing the stock, Starlink and its push into mobile look like the more grounded reasons to be interested, not the orbital data centers everyone is talking about. I would watch the direct-to-cell rollout closely, because that is where a chunk of this $1.6 trillion opportunity either becomes real money or stays a slide in a pitch deck.
Investing isn't just for Wall Street's biggest financial institutions anymore. According to an analysis by the University of Missouri-Kansas City School of Law, retail investors accounted for 25% of total equities trading volume in 2021, which was nearly double the reported percentage from the previous decade.
As retail investors make their presence felt, it pays to know which stocks they're buying. Based on data aggregated by Vanda Research, as of July 17, one stock was the runaway winner in terms of net flows by individual investors in July -- and neither Nvidia nor Apple even made the list of top buys. The trillion-dollar stock that retail investors are piling into is none other than Elon Musk's Space Exploration Technologies (SpaceX) (SPCX +2.56%).
Image source: Getty Images.
The buzziest IPO in history combines Wall Street's two hottest trends Data from Vanda shows that retail investors spent $320 million through the first 2.5 weeks of July purchasing shares of SpaceX. To put this figure into perspective, retail investors poured four times as much into SpaceX as they did into Alphabet, Amazon, and Tesla, combined!
Some of this buzz certainly ties into SpaceX's record-breaking initial public offering (IPO). SpaceX raised $85.7 billion from its debut, including the underwriters' overallotment option.
Retail investors have poured $320 million into SpaceX $SPCX this month--by far the most of any individual stock 🚀 pic.twitter.com/DiTCixpPal
-- Barchart (@Barchart) July 20, 2026 It's also tackling two of the hottest trillion-dollar addressable opportunities on the planet: artificial intelligence (AI) and space. SpaceX's prospectus laid out a $28.5 trillion addressable market, $26.5 trillion of which is tied to AI start-up xAI.
Furthermore, Musk has generated otherworldly returns as Tesla's CEO, and retail investors are hoping for an encore performance as CEO of SpaceX.
But while the catalysts are evident, so is the laundry list of risk factors.
Image source: Getty Images.
SpaceX may represent the biggest fleecing of retail investors in Wall Street's storied history Retail investors who purchased SpaceX stock in July have little to be thankful for, with shares down 28% since the month began (through the closing bell on July 21). Despite the early buzz that lifted SpaceX to a nearly $3 trillion valuation, reality is setting in.
While SpaceX is tackling two trillion-dollar addressable opportunities, the company isn't profitable and hasn't yet established that its capital-intensive operations are even sustainable over the long term. The extensive funding needs for xAI and the company's space infrastructure are likely to result in dilutive equity and/or debt offerings.
Retail investors are also on the verge of being fleeced by insiders.
Great look at the SpaceX shares unlock schedule as well as the potential passive buying schedule from @JSeyff @FrancisSharoon Depending on the early post-IPO returns, this could really play with and disperse the returns of "passive" funds (which is why there's arguably no such... pic.twitter.com/KOuEkJlngF
-- Eric Balchunas (@EricBalchunas) May 28, 2026 Whereas most newly public companies prohibit insiders from selling their shares for 180 days after debut, SpaceX is using an accelerated and staggered unlock schedule for select insiders. Beginning as early as two days after the company's first quarterly report on Aug. 4, insiders can start cashing out at retail investors' expense. This wealth transfer from retail investors to insiders should continue through mid-December.
Additionally, Elon Musk doesn't have the best track record of delivering on his outlandish guarantees. Although these promises are baked into Tesla's share price, the overwhelming majority of innovative promises made by Tesla's and SpaceX's boss have failed to come to fruition.
Retail investors piling into SpaceX in July are likely to regret their decision.
Sean Williams has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
SpaceX (SPCX +2.56%) is one of the most unique businesses to ever hit public markets.
Many in the general public think of the company as a rocket stock. And this is true. SpaceX is arguably the leading rocket company in the world right now, with technology and capabilities greater than any competitor.
But SpaceX is far more than a rocket company. More than 90% of the company's claimed total addressable market, for example, deals exclusively with artificial intelligence (AI). In many ways, SpaceX should be thought of as an AI company, not a rocket company.
Further still, SpaceX has dreams of making the human species interplanetary. The company's initial public offering (IPO) prospectus mentions dozens of times its intention to form colonies on planetary bodies other than Earth. According to filings, SpaceX intends to begin this process by first establishing a human base on the moon.
"Our mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars," SpaceX's IPO prospectus declares. "To do this, we have formed the most ambitious, vertically integrated innovation engine on (and off) Earth with unmatched capabilities to rapidly manufacture and launch space-based communications that connect the world, to harness the Sun to power a truth-seeking artificial intelligence that advances scientific discovery, and ultimately to build a base on the Moon and cities on other planets."
These are bold claims. And investors would be wise to note that building a base on the Moon -- not to mention building cities on other planets -- is mentioned last in SpaceX's mission statement.
Still, the claims do raise the question: When exactly might SpaceX return humans to the moon? Statistics from betting market Kalshi give us some indication of what some people think, although these markets need to be viewed critically. Betting markets are opaque and lightly regulated, and investors shouldn't rely on them for making decisions.
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Betting markets are bullish on SpaceX's moon ambitions SpaceX's own website claims that it will conduct "cargo flights to the lunar surface for research, development, and exploratory missions ... no earlier than 2028." NASA, meanwhile, recently announced a $20 billion initiative aiming to establish a permanent nuclear-powered base on the Moon's south pole by 2032. Put together, investors should expect significant movement in SpaceX's moon base efforts in the coming years.
Image source: Getty Images.
Although we don't have betting market information for SpaceX's upcoming moon landings, we do have some interesting statistics related to SpaceX's efforts to land humans on the surface of Mars. Presumably, these efforts would come after a moon base is established, giving investors some insight into the timing of both.
According to Kalshi, SpaceX "plans to send a million people to Mars using a thousand Starships sent during a Mars launch window, which occurs approximately every 26 months. Proposed journeys would require 80 to 150 days of transit time, averaging approximately 100 days."
Since 2024, investors have been betting on whether SpaceX will launch a manned flight to Mars before the start of 2030. In November of 2024, the predicted odds of this happening peaked at about 25%. Currently, however, the odds of the company launching a human flight to Mars by 2030 have slipped to about 10%.
Notably, Kalshi also has a small market where investors can bet on whether SpaceX will successfully land anything at all on the surface of Mars by 2030. In 2024, the odds were about 40%. Today, they hover just below 30%.
Earlier this year, the BBC reported that China is forging ahead with its own plans to land humans on the Moon by 2030. This news should trigger increased interest in the U.S. completing its own moon mission by that time. With best-in-class rocket technology, SpaceX should benefit from the renewed space race.
Although AI remains critical to SpaceX's growth trajectory, investors should expect plenty of investment in its moon project. Public and private interests seem to be aligning behind these efforts.
Technology may prove the biggest limiting factor to returning to the moon by 2030. I'm also keeping a close eye on SpaceX's funding capacities. Following a successful IPO, SpaceX's stock price is now below its offering price for the first time. And while plenty of financing options remain on the table, SpaceX may be forced to allocate its capital more tightly should markets fall or investor enthusiasm wane.
This is the biggest factor long term for SpaceX's growth ambitions: access to capital. That's especially true given the company remains unprofitable, with heavy capital expenditures resulting in mounting losses so far this year. The company's ability to scale its AI business, establish a base on the moon, and launch humans toward Mars will rely just as much on finances as it will on ambition.
Space Exploration Technologies (SPCX +2.56%) had its initial public offering (IPO) on June 12 and was fast-tracked into the Nasdaq-100 on July 7. But SpaceX won't be added to the S&P 500 (^GSPC -1.21%) or to index funds and exchange-traded funds (ETFs) that track the S&P 500 until at least a year after its IPO. That means that SpaceX is still not a holding in Vanguard's largest ETF by net assets: the Vanguard S&P 500 ETF (VOO -1.21%).
However, there are plenty of major Vanguard ETFs that don't use the S&P 500 as a benchmark. Here's how much SpaceX stock they are buying and what investors should expect their SpaceX positions to look like in the coming months.
Image source: Getty Images.
$6.1 billion in SpaceX stock The wait is over. Vanguard finally updated its ETF holdings as of June 30. Even though that period marks less than three weeks after SpaceX's IPO, several of Vanguard's largest ETFs were already gobbling up SpaceX.
After digging through Vanguard's 48 passively managed equity ETFs, these are the ones that bought SpaceX stock as of June 30 (to the best of my knowledge):
Vanguard ETF
Current % of Funds
SpaceX Ranking
Shares
Market Value1
Hypothetical Eventual Percentage of Funds2
Vanguard Communication Services ETF (VOX -3.52%)
2.37%
13
632,077
$142 million
20.3%
Vanguard Extended Market ETF (VXF -0.45%)
1.14%
1
6,775,494
$1.158 billion
0%
Vanguard Mega Cap Growth ETF (MGK -2.38%)
0.48%
41
942,362
$161 million
4.1%
Vanguard Growth ETF (VUG -2.22%)
0.29%
49
6,480,297
$1.107 billion
3.4%
Vanguard Russell 1000 Growth ETF (VONG -1.86%)
0.24%
51
757,638
$129 million
3%
Vanguard Large-Cap ETF (VV -1.24%)
0.16%
110
689,533
$118 million
2%
Vanguard Total Stock Market ETF (VTI -1.13%)
0.14%
110
18,738,438
$3.202 billion
1.7%
Vanguard Russell 1000 ETF (VONE -1.22%)
0.13%
120
87,520
$15 million
1.8%
Vanguard World Stock ETF (VT -1.10%)
0.08%
196
441,613
$75 million
1.1%
Data source: Vanguard. 1. Market value as of June 30, 2026. 2. Hypothetical eventual percentage of funds based on Meta Platforms' weighting in each fund.
Investors can expect SpaceX's weighting in these ETFs to increase in line with the SpaceX shares available for trading on the Nasdaq -- known as the float. For the time being, SpaceX isn't weighted in these ETFs based on its market cap but rather on a float-adjusted weighting to account for the vast majority of SpaceX shares that are held by insiders and restricted from trading.
However, 20% of Early Release Eligible Shares will be unlocked on Aug. 6. A total of 55% of Early Release Eligible Shares could be unlocked before the end of October.
Investors can expect ETFs to gradually increase their SpaceX holdings as its float increases. Eventually, SpaceX will be weighted by its market cap rather than its float. With a market cap of $1.5 trillion at the time of this writing, SpaceX currently has roughly the same market cap as Meta Platforms.
The table's Hypothetical Eventual Percentage of Funds column uses Meta as a proxy for weighting SpaceX in each fund. It shows Meta's current weighting in each fund and, therefore, roughly what SpaceX would be weighted once it is based on market cap rather than float.
On a percentage basis, the Vanguard Communication Services ETF has the largest SpaceX position -- making it the ETF's 13th-largest holding. Surprisingly, SpaceX is the No. 1 largest holding in the Vanguard Extended Market ETF. But that ETF tracks the S&P Completion Index, which includes mid- and small-cap equities. SpaceX may temporarily appear in that index due to its float-adjusted market cap, but investors should expect its weighting in the Vanguard Extended Market ETF to be 0% before the end of the year.
As you can see in the table, SpaceX was added to Russell 1000 funds because SpaceX is in that index, which doesn't have the same admission standards as the S&P 500. And it's also on track to be a major holding in the Vanguard Growth ETF, one of Vanguard's largest ETFs by net assets; the Vanguard Mega Cap Growth ETF; and the Vanguard Total Stock Market ETF -- the second-largest Vanguard ETF by net assets, behind the Vanguard S&P 500 ETF. The Vanguard Total Stock Market ETF is so big that even a 0.14% position is worth over $3 billion -- giving the ETF roughly the same number of SpaceX shares as the other eight Vanguard ETFs combined.
The Vanguard World Stock ETF holds the smallest SpaceX weighting because it includes more than 10,000 stocks from developed and emerging markets. Even if SpaceX had Meta Platforms' weight in that ETF, it would still be a small position at just 1.1%.
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An excellent ETF to buy and hold There are plenty of ways to get exposure to SpaceX, such as buying the stock directly, selecting an ETF where SpaceX will soon become a top holding, like the Vanguard Communication Services ETF, low-cost growth ETFs, or general total U.S. or world stock market ETFs.
The dirt cheap 0.03% expense ratio and simplicity of the Vanguard Total Stock Market ETF make it my favorite buy of the bunch. The ETF is very similar to the Vanguard S&P 500 ETF, since the S&P 500 accounts for about 80% of the U.S. stock market. But I like the additional diversification that the Total Stock Market ETF provides.
The Total Stock Market ETF added SpaceX faster than an ETF that is tied to a rules-based index like the S&P 500. And it will probably add Anthropic and OpenAI within weeks of their IPOs.
All told, investors who want a smaller position in SpaceX may prefer the Vanguard Total Stock Market ETF over the growth of sector-specific funds.
SpaceX (NASDAQ: SPCX) stock is under significant pressure just over a month after its initial public offering (IPO), with the latest market data showing that a significant portion of the shares have been sold short.
Specifically, short interest stands at 111,298,613 shares, representing 17.43% of the company’s public float, according to the figures Finbold obtained from Fintel on July 24.
In other words, nearly one in every five SpaceX shares available for public trading is currently being wagered against by bearish investors, which further highlights the growing skepticism that surrounds the company, as a short position is created when investors hope to buy shares back later at a lower price.
At press time, SpaceX shares are trading at $118.24, down 23.49% in the last month.
SpaceX stock price. Source: Finbold Traders are turning bearish on SpaceX stock The same data also shows a short interest ratio of 1.60 days to cover, indicating that it would take short sellers approximately 1.6 trading days to repurchase all borrowed shares based on the stock’s average daily trading volume. While the ratio is relatively low, the sheer number of shares sold short underscores the scale of bearish positioning.
Meanwhile, off-exchange short volume reached 24.95 million shares, with an off-exchange short volume ratio of 65.53%. This indicates that a large portion of short-selling activity is occurring in alternative trading venues.
With more than 111 million shares sold short and 17.43% of the public float tied to bearish bets, SpaceX remains one of the more heavily shorted large-cap stocks. This appears consistent with the warnings issued by analysts about the discrepancy between the $1.77 trillion IPO market capitalization and the firm’s revenue and losses in the first quarter (Q1) of 2026.
Looking ahead with all the data in mind, a SPCX stock crash seems likely in the short-term, but the August 4 earnings report could help improve market sentiment.
Featured image via Shutterstock
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All eyes have been on Space Exploration Technologies (SPCX +2.56%) over the past few months -- from the moment the company announced that it would go public at a trillion-dollar valuation to the stock's early and most recent trading. It's been a rollercoaster ride. SpaceX jumped more than 60% from its offer price of $135 to a high on June 16, then in recent days stumbled, even falling well below $135.
Investors have been enthusiastic about SpaceX's big goals and progress to get there, but at the same time, they've worried about the company's capital expenditures, which last year exceeded revenue and drove SpaceX to a net loss. We'll get a close look at the latest here when SpaceX reports earnings on Aug. 4. But Aug. 6 actually may be an even bigger day for the stock. In fact, my prediction is that it may be a decisive day for SpaceX. Let's find out why.
Image source: Getty Images.
SpaceX's growth businesses So, first, let's take a closer look at SpaceX to understand why the general investment community has been so interested in this particular stock. SpaceX operates in three growth areas that are particularly exciting: rocket launches, satellite-based internet services, and artificial intelligence (AI). These businesses each have the potential to change the way many things are done -- and generate tremendous growth for SpaceX and its shareholders.
SpaceX aims to drastically cut the costs of rocket launches and use its reusable rockets to further its businesses -- for example, these SpaceX rockets may transport equipment the AI unit needs to establish data centers in space (that's one of SpaceX's goals). All of this results in great efficiency for the company. SpaceX also has seen its internet service grow in leaps and bounds, with subscribers climbing from 2.3 million three years ago to more than 10 million this year.
But, as I mentioned earlier, to support the technology needed for these high-growth businesses, SpaceX must invest heavily. And so far, that's weighed on earnings. Investors are eagerly awaiting the Aug. 4 earnings report to monitor the spending situation and the pace of revenue growth. The report could trigger movement in the stock, of course, depending on whether investors are pleased or disappointed with SpaceX's progress.
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Early SpaceX investors My prediction, though, is that Aug. 6 actually will be the decisive day for the company, and here's why. It may offer us a clue about early SpaceX investors' thoughts. This is because, as of this day, the second full trading day after the company's earnings report, early SpaceX shareholders may sell as much as 20% of their holdings. This is as the first lockup date expires.
Why do IPO companies set up lockup periods? They're meant to favor stability. Even if an early investor truly believes in a company, that investor still might be tempted to sell a few shares on IPO day to lock in a profit. If every early investor did so, that could create downward pressure on the stock. So companies establish dates that allow these longtime investors to sell farther down the road.
In this case, SpaceX used a tiered approach, with several expiration dates. The first, as mentioned, happens on Aug. 6.
A warning sign? Does this mean that a flurry of selling on Aug. 6 should serve as a warning sign for investors? Not necessarily. Some investors, those who have backed SpaceX for quite some time, may decide to sell a few shares to benefit from their gains so far. They may be interested in reallocating the funds into a new growth opportunity, for example, or further diversifying their portfolios. So the movement isn't necessarily bad news for SpaceX.
Still, it's important to monitor the direction of the stock on Aug. 6 and the days to follow. A significant level of downward pressure could suggest that shareholders -- early as well as new -- are focusing more on SpaceX's risks and that may hurt the stock's performance in the weeks to come. That said, if the stock doesn't fall much around this lockup expiry, we may see this as a sign of confidence among early investors, as it shows they aim to hold onto every SpaceX share.
In any case, my prediction is that Aug. 6 will be decisive for SpaceX, setting the tone for the stock in the weeks to follow.
Since its initial public offering in June, Space Exploration Technologies (SPCX +2.56%) has arguably been the most widely discussed stock in the market.
The company saw its stock soar out of the gate but has since given back much of those gains, despite joining several prominent market indexes sooner than most post-IPO stocks. While there is seemingly never a dull moment at the company, investors should definitely mark their calendars for Aug. 4.
Here's why.
Image source: The Motley Fool.
Second-quarter earnings will be announced Aug. 4 SpaceX recently announced that it will release its second-quarter 2026 financial results on Aug. 4 after the market closes. Management, including SpaceX founder Elon Musk, will host a live conference call at 4:30 p.m. ET to discuss the results with Wall Street analysts. Earnings allow investors to review financial results over three months.
While SpaceX filed its registration statement earlier this year, providing a lot of information about the company, second-quarter results will present investors with new information that will better inform their view of the company and their opinion of the stock and its valuation.
It's also possible, although certainly not guaranteed, that SpaceX provides financial guidance, which would better inform analysts' financial models.
But for a company like SpaceX, which is a long-term bet on the space economy and artificial intelligence, insights from Musk on the conference call are likely to be just as, if not more important than, second-quarter financials.
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Investors will have many questions about initiatives like Starship, the company's fully reusable, heavy-lift rocket on which much of the SpaceX business model hinges.
I'm sure investors will also be curious about the company's data center deals announced earlier this year, its planned future Terafab facility to be run in partnership with Intel and Tesla, and how Grok Intelligence is advancing.
Starlink, the company's low earth orbit satellite internet service, which has thus far been its most profitable business, will also be top of mind.
Consensus estimates project revenue of around $6.87 billion for the quarter and a loss of $0.28 per share, according to Yahoo! Finance (as of July 22). In the first quarter of 2026, SpaceX generated revenue of nearly $4.7 billion and a loss of $1.27 per share.
During SpaceX's IPO roadshow, the Financial Times reported that investment bankers suggested total revenue at the company could surge from about $19 billion in 2025 to $474 billion by 2030.
So while investors aren't focused on one quarter, they will be looking for clues about medium-term growth.
A big tranche of the lock-up shares expires SpaceX's second-quarter earnings report will also trigger the release of a big tranche of shares subject to the company's lock-up policy.
Following most IPOs, company insiders and employees are prevented from selling their shares for a certain period to maintain stability in the stock when it first hits the market. SpaceX has a staggered lock-up policy, under which a certain number of insider shares are gradually made available for sale over the first six months following the IPO.
On the second full trading day following the release of the company's second-quarter earnings results, a fifth of insider shares will be eligible for sale. Interestingly, if the stock price is at least 30% above SpaceX's IPO price of $135, an additional 10% of insider shares will be eligible for sale.
As of July 21, SpaceX stock traded at roughly $123.50, so there's some ground to make up for insiders to unlock that additional 10%. This policy does not apply to Musk, who holds an extraordinary amount of the company's shares and can't sell any stock until at least one year after the IPO.
If insiders sell a large number of their shares, that could flood the market with supply and hurt the stock, even if earnings are perceived positively.
Ultimately, SpaceX's second-quarter earnings report has both mechanical and fundamental implications for the stock. It could very well be the biggest day for the company and stock since the IPO.
Space Exploration Technologies (SPCX +2.56%), or SpaceX, launched its IPO in June with high hopes. While it benefited from an initial bump, its fortunes quickly reversed, and shares now sell below its original IPO price.
A likely reason for the pullback was the valuation of the communication stock, which remains extremely elevated. This overvaluation is so extreme that Planet Labs (PL -1.06%), which SpaceX has so far outperformed, is likely to earn higher returns (or at least lower losses) for 2026. Here's why.
Image source: The Motley Fool.
The state of SpaceX and Planet Labs Aside from their involvement in space and satellites, SpaceX and Planet Labs are different companies. Planet Labs uses satellites to create high-resolution maps of the planet daily. In contrast, SpaceX launches rockets and operates a satellite-based internet service.
Admittedly, Planet Labs would likely not be possible without SpaceX, and its infrastructure makes it a larger company. Its $1.6 trillion market cap is far above Planet Labs' $8 billion.
PL data by YCharts
Valuations explain a surprising amount of that difference. As of the time of this writing, SpaceX trades at a price-to-sales (P/S) ratio of 84, far above Planet Labs's 22 sales multiple.
Both exceed the average P/S ratio of 3.7 for the S&P 500 (^GSPC -1.21%). However, analysts estimate that Planet Labs's revenue will grow at 42% in fiscal 2027, well above the 26% increase in fiscal 2026 (ended Jan. 31). Amid those increases, a sales multiple in the low 20s is not unusual.
In contrast, investors rarely encounter an 84 sales multiple, and one has to wonder whether Elon Musk's track record can justify that valuation. In 2025, SpaceX's revenue grew by 33% year over year, and the forecast of 109% revenue growth in 2026 is a significant increase that makes its valuation more understandable. Still, that also leaves enough potential downside that any hint of bad news could spark a huge sell-off in SpaceX stock.
Planet Labs is not immune to the effects of bad news. Nonetheless, it is in a stronger position to handle it, and that valuation leaves room for a higher multiple if the company exceeds expectations.
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SpaceX probably has further to fall Of the two stocks, SpaceX is the one most likely to suffer more over the course of the year.
Admittedly, Planet Labs' stock has kept going down and has declined more than SpaceX's since the SpaceX IPO. Moreover, neither stock is inexpensive, and it is quite possible that both finish 2026 in the red.
However, one has to question whether any company is worth buying at 84 times sales, a valuation where even an implication of bad news could lead to more selling.
Since a perfect performance is unlikely, investors should expect SpaceX stock to fall further in the near term. Conversely, with Planet Labs facing less pressure, it should either recover or keep its downside in check going forward.
Space Exploration Technologies (SPCX +2.56%) has been on quite a ride since its debut in the public markets in early June. Shares were originally priced at $135, then quickly rose to $225 before tumbling to around $123 as of July 22. For a long-term, fundamentals-focused investor, it's not the volatility that's keeping other investors and me away; it's still the inflated valuation.
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Even after more than $1 trillion was wiped from SpaceX's market cap, the company is still inflated at a $1.6 trillion valuation. With less than $19 billion in revenue, that's still close to 85 times sales. A nearly triple-digit multiple doesn't make sense given last year's 33% growth rate. Elon Musk's company is also spending a tremendous amount on capital expenditures, expected to reach $40 billion this year. SpaceX is nowhere near profitable.
Image source: The Motley Fool.
What the company could achieve with its Starlink and rocket business is truly inspiring and exciting. SpaceX acquired Anysphere, the parent company of Cursor, which should add significant revenue. That's a positive for investors, but I'd still like to see more organic growth than purchased growth over the next several quarters.
If SpaceX can show consistent growth and a path to profitability, eventually I'd be more ready to climb on board. However, I still don't feel comfortable buying a company that is years away from its revenue justifying its price.
Right now, the upside for retail investors looks farther away than a colony on Mars.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Space Exploration Technologies (SPCX +2.56%) has grand ambitions, including sending humans to Mars. This may require breakthroughs in space travel even more impressive than those the company has already achieved. It's not surprising, then, that Ark Investment Management -- a firm led by the famous investor Cathie Wood, a staunch believer in the power of innovation -- is doubling down on SpaceX stock. The space company is the fourth-largest holding across Ark Investment Management's combined portfolio, with the firm buying more shares as recently as July 22. However, I wouldn't follow in Wood's footsteps on this one. Here's why I am not ready to buy SpaceX stock yet.
Image source: Getty Images.
The price is not right First, let's give credit where credit is due. SpaceX has already revolutionized space travel and is currently a leader in providing orbital launch services to U.S. government agencies. The company is still making progress. SpaceX is developing a next-gen rocket, Starship, that could significantly reduce launch costs. SpaceX will make progress elsewhere thanks to Starship, including in its Starlink segment, where it provides internet services through a constellation of Low Earth Orbit satellites. Starship will help SpaceX launch substantially more satellites into orbit, thereby improving its services and expanding its addressable market.
SpaceX's artificial intelligence (AI) business also seems to be slowly taking off. The company has a deal in place to provide Alphabet (GOOG -6.89%) (GOOGL -7.12%) with compute capacity. SpaceX is also reportedly in talks to provide computing power to the U.S. Department of Defense in a potential multi-billion-dollar deal. Over the next few years, SpaceX could record growing revenue thanks to Starlink, which already boasts 10.3 million subscribers, a number that should keep growing at a good clip. We could also see revenue growth in its space and AI units ramping up.
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However, SpaceX likely won't be consistently profitable anytime soon. The company is investing heavily to tap into what it sees as transformational opportunities. That's especially true in its AI business, where it is spending more on capex than in its two other segments combined. Whether or not that's the right move, time will tell. But for a company worth $1.6 trillion, it's hard to justify a revenue of just $4.7 billion in the first quarter of 2026, which increased by just 15% year over year.
At its current valuation, SpaceX's revenue should either be much higher or should be growing much faster (or both). Note that the company's price-to-sales ratio is an incredible 78.09 as of this writing. That's far too high by any standard, particularly since the reasonably valued range typically starts below "2." All of this suggests the market is already factoring in SpaceX's success across its connectivity and, especially, its AI businesses, and the stock could decline over the next few years as it faces increased competition. That's why the company's shares aren't attractive right now. They'd have to drop significantly from current levels before becoming so.
Alphabet's Google (GOOG) said its investment portfolio now includes $94.1 billion in shares of SpaceX (SPCX), a space-and-AI company, following SpaceX's blockbu
In two weeks, on Aug. 4, Space Exploration Technologies (SPCX +2.56%) is scheduled to release its first quarterly earnings report after going public through an initial public offering (IPO) in June. Better known as SpaceX, the technology company that raised the most capital in an IPO in history, is now settling into the routine of a publicly traded company.
Here's my prediction for what happens to SpaceX after this quarterly earnings report, and why it will have little to no bearing on the stock over the next 10 years.
Image source: Getty Images.
SpaceX saw fast revenue growth, but more losses SpaceX is the leading private spaceflight company that is also trying to expand into an artificial intelligence (AI) giant. Heading into the IPO, its Starlink connectivity business was seeing the most growth, posting 50% year-over-year revenue growth in 2025. Investors should expect more of this stellar growth to continue in Q2 of 2026.
The company is working on massive new projects, including the Starship rocket, AI data centers, and orbital AI compute. Spending on these projects will likely keep the company in the red in the second quarter, just as it was in 2025, with operating earnings of negative $2.5 billion. SpaceX spent $21 billion on capital expenditures in 2025 while generating $18.7 billion in revenue, mainly from Starlink. This makes it one of the most aggressive spenders in the AI infrastructure boom.
Revenue will begin to show up from AI compute contracts with the likes of Alphabet, Anthropic, and others, but it will likely be many years -- if ever -- before these deals turn a profit for SpaceX.
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What matters over the next few quarters is different than what matters over the next decade Regardless of what SpaceX reports financially this quarter, there is only one thing that will drive the share price for the rest of 2026: the end of various lockup periods for insider shareholders. Of the 13 billion total shares outstanding in SpaceX, 4.6 billion are currently in a lockup period and cannot be traded. Twenty percent of these shares get unlocked two days after Q2 earnings, with many long-term investors likely looking to sell and return capital to investors who put money into SpaceX in its early days.
The rest of the float gets unlocked over the rest of 2026, excluding Elon Musk's shares. With a flood of selling pressure on the horizon, it is likely that SpaceX's stock price will fall over the rest of 2026. This does not change the fundamentals of the business, which depend on the commercial viability of Starship and AI data centers in orbit over the next decade, but it does mean a volatile post-IPO share price is more likely.
YieldMax has launched another single-stock option-income fund, this time built around one of the market’s most-watched newcomers: SpaceX. The YieldMax® SPCX Option Income Strategy ETF (NYSEARCA:YSPC) began trading on NYSE Arca in mid-July 2026, with a prospectus dated July 12, 2026. It is issued through Tidal Trust II, with Tidal Investments LLC serving as adviser, and joins YieldMax’s growing lineup of income ETFs tied to a single underlying stock.
The fund carries an expense ratio of 1.01%, gross and net, which works out to about $101 a year on a $10,000 investment. That fee is in line with other YieldMax single-stock income funds and well above what a plain index ETF charges. According to the prospectus, YSPC’s primary objective is current income, and its secondary objective is exposure to Space Exploration Technologies Corporation Class A common stock (SPCX), subject to a limit on the fund’s participation in gains.
What the Fund Does YSPC is an actively managed ETF, meaning a portfolio team picks and adjusts the holdings rather than tracking an index. The strategy itself is an options overlay. Rather than owning SpaceX shares outright, the fund uses options contracts on SPCX to generate income while getting synthetic exposure to the stock’s price. Under its prospectus, the fund commits to investing at least 80% of net assets, plus borrowings, in securities and financial instruments that provide indirect exposure to SPCX, with the notional value of options contracts counting toward that test.
Notional value is worth pausing on. It refers to the full face value of a position rather than the capital actually committed. That is how a fund can reference a large amount of stock exposure while posting only a fraction of that amount as collateral. In practice, YieldMax funds typically sell call options against their synthetic long positions. The premiums collected become the income the fund distributes. The trade-off: if SpaceX shares rally hard, the fund’s upside is capped by those sold calls, while the downside if SpaceX falls is largely intact.
Why It Exists and How It Stacks Up YieldMax built its brand on funds tied to Tesla, NVIDIA, MicroStrategy, and Coinbase, all of which apply the same synthetic-covered-call template to a volatile single stock. SpaceX, freshly public with a market capitalization of roughly $928.7 billion and a business spanning launch, Starlink satellite broadband, and (after the early-2026 xAI acquisition) artificial intelligence, is a natural fit for that playbook.
YSPC is the first ETF built specifically to sell options on SPCX for income. Direct competitors do not yet exist, though the broader category of single-stock covered-call ETFs from issuers such as Kurv and Roundhill charges fees in a similar range. Investors comparing YSPC against simply owning SPCX shares should note that SpaceX itself pays no dividend, so any yield from YSPC comes entirely from the options strategy, not from the underlying company.
Who It Might Suit, and the Risks The fund is designed for investors who want cash distributions tied to a highly volatile stock and are willing to give up part of the upside to get them. The prospectus notes distributions are generally taxable as ordinary income, qualified dividend income, or capital gains, which is worth understanding before holding it in a taxable account.
The risks are meaningful. YSPC has no track record: the fund has not yet paid a distribution, so the actual yield is unknown. In its first five trading days, shares moved from $49.96 on July 15 to $46.16 on July 21, a decline of 7.61%, and closed at $46.06 on July 21. SPCX itself has been rough lately, down 33.22% over the past month from a start price of $185 on June 18 to $123.54 on July 21. Because the option strategy caps gains but not losses, a sustained drawdown in SPCX can erode the fund’s net asset value even while distributions are being paid, meaning yield can effectively come out of principal.
New ETFs also tend to launch with small assets and wider bid-ask spreads, and funds that fail to gather assets sometimes close. The fund’s total net assets were not disclosed in the prospectus.
What to watch from here: the size and frequency of YSPC’s first distributions, how much of its NAV holds up during SpaceX’s volatile early trading life, and whether assets under management build enough to keep the fund viable through its first year.
Contact [email protected] for any questions or corrections.
Space Exploration Technologies (SPCX +2.56%) officially joined the Nasdaq-100 on July 7. The megacap growth stock was fast-tracked into the index less than a month after its June 12 initial public offering.
However, the percentage of shares available for public trading -- known as the float -- is roughly 5% of SpaceX's market cap. That number will increase as shares are gradually unlocked beginning Aug. 6. Until then, SpaceX's Nasdaq-100 weighting is around four or five times its float rather than its market cap.
So instead of being over 4% of the Nasdaq-100 and Nasdaq-100-based exchange-traded funds (ETFs) like the Invesco QQQ Trust (QQQ -1.90%), SpaceX is 1.1% for the time being -- making it the 22nd largest holding in the ETF.
Image source: Getty Images.
Investment management firm Vanguard just updated its holdings across dozens of its ETFs. As of June 30, the data shows that multiple Vanguard ETFs bought SpaceX in June, including the Vanguard Total Stock Market ETF (VTI -1.13%), the Vanguard Growth ETF (VUG -2.19%), the Vanguard Mega Cap Growth ETF (MGK -2.42%), and the Vanguard Communication Services ETF (VOX -3.52%). But only one Vanguard ETF has a higher weighting in SpaceX than the Nasdaq-100.
SpaceX will anchor the Vanguard Communication Services ETF Vanguard has low-cost ETFs for each of the 11 stock market sectors. In June, I correctly predicted that Vanguard would add SpaceX to its communication sector ETF rather than industrials or technology because most of SpaceX's revenue and near-term growth are driven by its Starlink network of low-earth orbit satellites and because SpaceX owns the social media platform X (formerly Twitter).
That prediction came true when Vanguard updated the holdings of its Communication Services ETF, and SpaceX already jumped to the 13th-largest holding at 2.4%. That's significantly higher than the less than 0.5% weighting in the three Vanguard ETFs mentioned earlier.
Investors can expect SpaceX's weighting in the communications sector to grow as more shares are unlocked and traded on the Nasdaq. When SpaceX is eventually weighted by market cap, it will likely rank as the third-largest holding behind Alphabet and Meta Platforms. But it could even be the second-largest holding if it overtakes Meta Platforms in market cap again.
NYSEMKT: VOXVanguard World Fund - Vanguard Communication Services ETF
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Sector ETF concentration is a bonus With a mere 0.09% expense ratio, the Vanguard Communication Services ETF is one of the best ETFs to buy for investors looking for a low-cost option that will make SpaceX a top holding. Whereas funds based on the Nasdaq-100 include stocks from all sectors, sector-based ETFs give added weight to industry leaders because there are fewer components. This structure allows Amazon and Tesla to dominate the consumer discretionary sector, ExxonMobil and Chevron to lead the energy sector, and so on.
SpaceX's entry into the communications sector puts it in the big three alongside Alphabet and Meta Platforms. Once SpaceX's lockup period fully ends in early December, investors can expect close to 60% of the ETF to be invested in these three stocks.
Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Chevron, Meta Platforms, Tesla, and Vanguard Growth ETF. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
When Space Exploration Technologies (SPCX +1.73%), also known as SpaceX, went public on June 12, only about 4.9% of its 13.2 billion shares were put up for sale, an unusually small public float.
But that percentage is set to more than double in August as many owners of pre-IPO shares will be partially released from the standard lock-up agreements.
This week, the space exploration, satellite, and artificial intelligence firm headed by Elon Musk announced that it will deliver its first earnings report as a public company on Aug. 4. As per the rules set out in the company's prospectus, two trading days later, pre-IPO shareholders will be able to sell some 911 million of their locked-up shares, bringing the float to about 12%. Even more shares will be released if the stock trades at 30% above its IPO price on five of the 10 trading days prior to the earnings release.
Image source: Getty Images.
Essentially, the 180-day lock-up agreement expires in tranches, with more shares set to be released in September, November, and December. Elon Musk and some other significant investors are subject to a one-year lock-up. Musk owns around 40% of SpaceX shares, though he controls more than 80% of the company's voting power through a dual-class share structure.
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And as SpaceX employees begin to liquidate their holdings to diversify out of the company's stock -- a normal occurrence after companies go public -- that selling could put downward pressure on the share price.
So, should you pick up a few SpaceX shares?
Well, that's a tricky question. After an initial bump in the first few days after the IPO, when investors bid the stock above $225, it has since retreated and now trades at around $121 a share, well below the $135 IPO price. Such price movement in an IPO stock is not unusual, but given that SpaceX is not yet profitable, it may take investors a while to regain their initial enthusiasm.
Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
HomeIndustriesTech StocksTech StocksEarnings quadrupled on paper, but an analyst calls that an ‘illusory’ performance propped up by unrealized gains from equity investmentsJuly 23, 2026, 10:28 a.m. ET
Alphabet was once a cash-flow machine, but it’s seeing a fall from grace.
The company just reported its first-ever quarter of negative free cash flow on the heels of an unrelenting artificial-intelligence spending spree. It’s become the subject of fierce debate on Wall Street, especially since Alphabet GOOG GOOGL also lifted its capital-expenditure forecast for the year, leaving room for that spending to surpass $200 billion.
SpaceX SPCX shares fell more than 3% on Thursday as investors awaited the company's delayed Starship test flight, a mission widely viewed as a key catalyst for the newly public space and artificial intelligence company.
The stock traded around $111.35 in early trading after tumbling 6.7% on Wednesday, extending a volatile stretch following its record-setting initial public offering.
Broader markets were also weaker, with futures tied to the S&P 500 and Dow Jones Industrial Average down 1.2% and 1.1%, respectively.
Investor attention is centered on SpaceX's 13th Starship test flight, scheduled to lift off from Texas later today.
The launch was originally planned for July 16 but was postponed for a week because of an engine issue.
The mission is expected to be closely watched by investors looking for evidence that the company can continue advancing its launch capabilities as it seeks to justify its premium valuation.
Shares have struggled since their initial surge following the IPO, with valuation concerns weighing on sentiment.
According to the information provided, SpaceX trades at roughly 40 times estimated 2026 sales, a multiple that investors have questioned given the company's size and current financial profile.
Bearish investors have continued to add to their positions as the stock declined below its IPO price.
According to Reuters, citing Ortex Technologies data through Tuesday, short sellers are sitting on an estimated $15.5 billion in paper profits since SpaceX's mid-June listing.
The stock has fallen below its $135 IPO price after reaching a post-listing high of $225.64 and dropped to a record low of $115.26 on Wednesday.
"There is no sign of short sellers taking profits on SpaceX," Ortex co-founder Peter Hillerberg told Reuters.
"If anything they are leaning in harder," Hillerberg added.
According to Ortex, approximately 360 million SpaceX shares, representing about 56% of the free float, were on loan through Tuesday, indicating sustained bearish positioning.
Chief Executive Elon Musk responded earlier this week with a warning aimed at investors betting against the company.
“Survival probability of firms who maintain significant short position in SPCX over time is very low,” Musk wrote in a post on X.
Analysts remain constructiveDespite the recent share price weakness, Wall Street analysts continue to maintain a largely positive outlook on SpaceX.
According to LSEG data, 27 of the 32 analysts covering the stock recommend buying it, while four have Hold-equivalent ratings and one recommends selling.
Supportive analysts argue that the company's Starlink satellite internet business, government launch operations, and Musk's history of attracting investor interest justify a valuation premium despite SpaceX reporting a net loss of nearly $5 billion last year.
Analysts have also identified Thursday's Starship test flight as a potential catalyst, with investors expected to assess the company's execution in its launch business ahead of its upcoming earnings report and the continued expansion of its public float.
SPCX stock is moving. See the chart and price action here. Alphabet’s AI Spend WarningStill, Alphabet shares dropped after AI capex overwhelmed the company’s operating cash flow.
Alphabet spent $44.9 billion on capital projects during the quarter. Operating cash flow reached $39.1 billion, leaving the company with negative free cash flow of $5.9 billion. It marked Alphabet’s first negative free-cash-flow quarter since its 2004 initial public offering.
Microsoft Corp. (NASDAQ:MSFT) is tracking toward roughly $190 billion in calendar-year AI spending, and combined hyperscaler capex could approach $725 billion this year.
SpaceX’s Capex ChallengeThose figures illustrate the scale of SpaceX’s challenge.
SpaceX inherited an expensive AI operation through its combination with xAI. Training advanced models requires chips, data centers, networking equipment and enormous amounts of electricity. The costs arrive before AI contracts produce dependable returns.
SpaceX has begun monetizing its AI infrastructure. Reflection AI agreed to purchase computing capacity from SpaceXAI, and Google also signed a multiyear computing agreement with the company.
Yet Alphabet’s quarter shows why revenue growth may not settle the debate. Investors increasingly want proof that AI spending can produce cash, margins and sustainable returns.
Rocket development offers visible milestones while AI infrastructure provides fewer clear checkpoints.
For SpaceX stock, Starship’s progress remains important, but the larger valuation test may be whether SpaceX can avoid the cash-flow pressure now hitting the world’s richest tech companies.
SPCX Stock Price Activity: SpaceX shares were down 0.75% at $114.40 at the time of publication Thursday, according to Benzinga Pro data.
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The SpaceX logo in this illustration taken June 11, 2026. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights, opens new tab
NEW YORK, July 23 (Reuters) - Short sellers targeting SpaceX (SPCX.O), opens new tab shares are sitting on an estimated $15.5 billion in paper profit since the rockets-to-AI firm's mid-June initial public offering, as its stock slipped below the IPO price, according to data through Tuesday from analytics firm Ortex Technologies.
Short sellers aim to sell borrowed shares to buy them back at a profit.
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Reporting by Saqib Iqbal Ahmed, Editing by Louise Heavens
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After its initial strong rally that took the equity to its all-time high of $225.64, SpaceX (NASDAQ: SPCX) stock entered a downturn that saw it crash below the initial public offering (IPO) price of $135 and to $115.26 at the latest close.
SpaceX stock price chart. Source: Google Overall, SPCX shares’ performance ensured that the company lost $250 billion from its IPO valuation, with the rising downward momentum apparently threatening a fall below $100.
Notably, the move appears in line with an assessment published by Morningstar shortly before SpaceX stock trading started and which foresaw the equity’s fair value at approximately $70.
How SpaceX stock compares to other trillion-dollar companies Additionally, the recent downturn appears consistent with the warning issued by multiple analysts and commentators that noted the severe discrepancy between the $1.77 trillion IPO market capitalization – comparable to Broadcom (NASDAQ: AVGO) and Saudi Aramco – and the firm’s revenue and losses in the first quarter (Q1) of 2026.
Specifically, the semiconductor company reported revenue of over $19 billion in Q1, while SpaceX was below $5 billion.
Similarly, the international oil giant’s net income for the three months stood above $33 billion, while Elon Musk’s newer public company recorded an operating loss of nearly $2 billion.
What is next for SpaceX stock price? Looking ahead, there appears to be relatively little to stop SPCX stock’s crash in the short-term.
Specifically, the equity’s float remains exceptionally low relative to a standard IPO, all insiders remain barred from selling, and the July 7 inclusion into the Nasdaq-100 benchmark index seemingly failed to generate significant buying pressure.
The final point might be a particularly strong signal that shares of SPCX are indeed headed below $100, considering the fast-track addition was widely expected to lead to widespread automatic purchasing by index funds.
Overall, Palantir (NASDAQ: PLTR) stock serves as a strong example of an equity’s trajectory after joining a benchmark, as it soared roughly 30% in its first month within the S&P500 and about 400% in its first year.
Still, one possible opportunity for a reversal could come with the August 4 earnings report, provided it beats analyst forecasts sufficiently – a plausible outcome given the company’s recent business transformation and compute agreements with Google (NASDAQ: GOOGL) and Anthropic.
Simultaneously, investors should be wary of the filing as, despite the $1.25 billion monthly deal with the world’s other most recognizable artificial intelligence company, revenue will be constrained by a discount for the initial quarter disclosed at the same time as the partnership.
SpaceX stock long-term price analysis Looking further into the future, the performance of SpaceX stock does not become easier to forecast. On the one hand, the balance between revenue, profitability, and valuation remains a major concern and appears to largely back Morningstar’s comparatively bearish forecast.
On the other hand, much of SPCX’s initial share price and market capitalization was backed by projections for future revenue, which, in some estimates, amount to more than $1 trillion by 2030 – for more than a two-hundredfold increase from Q1, 2026 – and an overall total addressable market greater than $20 trillion disclosed in the S-1.
Wall Street certainly appears convinced in the growth story, given that SpaceX equity retains an overall ‘Strong Buy’ rating and an average 12-month price target of $243.81 for a 111.53% rally from the latest close.
Wall Street sets SpaceX stock price for the next 12 months. Source: TipRanks Furthermore, the strength of the bullish consensus is further demonstrated by the fact that, despite the severe correction, SPCX shares boast 23 positive, 5 ‘Neutral,’ and only a single ‘Sell’ recommendation on the stock analysis platform TipRanks, per the data Finbold retrieved on July 23.
Item 1 of 2 The silhouette of Elon Musk and SpaceX logo are seen in this illustration created on June 11, 2026. REUTERS/Dado Ruvic/Illustration/File Photo
[1/2]The silhouette of Elon Musk and SpaceX logo are seen in this illustration created on June 11, 2026. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights, opens new tab
SummaryCompaniesSpaceX shares fell to a record low of $115.26 on WednesdayAbout 360 million SPCX shares, or 56% of free float, were out on loan, Ortex data showedShort sellers showed little sign of pulling back on bearish betsNEW YORK, July 23 (Reuters) - Short sellers targeting SpaceX (SPCX.O), opens new tab shares are sitting on an estimated $15.5 billion in paper profit since the rockets-to-AI firm's mid-June initial public offering, as its stock slipped below the IPO price, according to data through Tuesday from analytics firm Ortex Technologies.
Short sellers, who borrow shares to sell them and later buy them back at a lower price for a profit, have pressed their bearish bets on SpaceX as the company's shares slipped below its IPO price of $135 from a post-IPO high of $225.64.
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SpaceX shares have been volatile, experiencing brief bouts of strength before slipping further. On Wednesday, the stock dropped to a new low of $115.26.
"There is no sign of short sellers taking profits on SpaceX," Ortex co-founder Peter Hillerberg said.
"If anything they are leaning in harder," Hillerberg said.
About 360 million SpaceX shares, about 56% of the free float, were out on loan, Ortex data through Tuesday showed.
SpaceX did not immediately respond to a request for comment.
"The survival probability of firms who maintain a significant short position in SpaceX over time is very low," SpaceX CEO Elon Musk wrote in a post on X on Friday.
SpaceX's lofty valuation makes it a target for short sellers skeptical of its rich price tag, but strong retail and institutional interest as well as Musk's history of public battles against short sellers make bearish bets against the company a risky proposition.
The weakness in SpaceX shares reflects in part investor concern over debt-funded AI spending. Tesla, another Musk company, reported negative free cash flow in the second quarter for the first time in more than two years as the EV maker accelerated spending on AI infrastructure, battery capacity, robotaxis and next-generation manufacturing.
Reporting by Saqib Iqbal Ahmed, Editing by Louise Heavens
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Shares of Elon Musk’s space empire, Space Exploration Technologies (NASDAQ:SPCX | SPCX Price Prediction), have been in free fall in recent weeks, recently falling to $115 and change, close to $20 off the IPO price. Of course, most new investors who couldn’t participate in the IPO had to pay closer to $160 per share on the first day of public trade. Either way, it didn’t take long for investors to grow fearful shortly after the euphoric initial rise that helped Elon Musk temporarily become the world’s first trillionaire.
The hype has died down; the shorts have arrived, the float is rising, and there’s growing concern about the firm’s unprofitability. As I noted in prior pieces, AI-related CapEx, which has been worrisome for hyperscalers, would soon rattle SpaceX shareholders. Of course, advancing the Starship program doesn’t come cheap, either.
Heavy spend is never fun, but it’s very much necessary While it seems like an uneasy time to be in SpaceX amid heavy spending as it builds data centers on Earth and in orbit, I do think that the pieces will gradually fall into place.
Like it or not, SpaceX is moving at a ridiculous pace, and investors might not yet be prepared for the rise in spend that accompanies it. And while it’s necessary to get that chokehold on cloud infrastructure beyond the clouds, it takes mouth-watering sums of investment to build the rails that take us to new frontiers.
The big question is whether the big payoff is shortly after the final track is nailed down or if it’ll flow in steadily over a more extended period of time. That’s the main question mark that makes it so hard to value SpaceX. It did take quite a while for sell-side analysts to do their homework and come up with a recommendation and price target.
With SpaceX reportedly in talks with the Pentagon to supply data center capacity (on the ground), it certainly feels like SpaceX has a huge advantage when it comes to terrestrial compute and a big, satisfied customer in place once orbital compute eventually comes online.
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Once Starship gets going, the sky is the limit In my view, SpaceX is locking in that chokehold on extraterrestrial compute. It has the transport monopoly in Starship to get assets out there (it’s like the railway to space, so to speak). And while the latest launch delay is a red flag for some, I viewed it as nothing more than a shakeout of some of the stock’s more weak-handed holders.
Starship needs to do that heavy lifting, and there’s not much room for failure. If the reusable rocket doesn’t go well, so much for the ambitious space endeavors. With such a valuable payload (GPUs, solar panels, and all the sort), any slight fumble could have disastrous consequences for the stock, which still looks expensive despite shedding nearly half of its value from the peak hit in June.
As Starship starts hauling, the real chokehold, I think, lies in the design of SpaceX’s orbital data center. If it stays cool and powered, the proof of concept will be in the books, and SpaceX will be ready to scale, likely faster than hyperscalers, including those with space ambitions, know how to react.
Indeed, SpaceX has moved at light speed with terrestrial data centers (think Colossus). And there’s no reason to think the firm can’t do the same with orbital data centers once it shows off a concept that actually works. If all goes according to plan, perhaps SpaceX will have monetized Starmind before its rivals get anything off the ground without its help.
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Space Exploration Technologies (SPCX -1.08%) had to abort its 13th Starship test flight after some of its engines failed to ignite. Starship is SpaceX's fully reusable super-heavy-lift vehicle, and once it's ready to operate commercially, it could significantly reduce the cost of putting payloads into space, such as Starlink satellites or orbital data center satellites. Getting it off the ground (pun intended) will be key to the company achieving revenue growth and earnings that meet the market's high expectations.
SpaceX will have another go at the Starship test launch, and many more tests and launches will come over the next few years. A single aborted launch does not significantly impact the company's long-term viability.
The bigger risk to SpaceX and its investors involves what will happen if it successfully brings Starship into service: The company will need to raise massive amounts of capital over the better part of the next decade, even based on some of the most bullish outlooks for the business.
Image source: Getty Images.
This SpaceX bull just highlighted a major risk to the stock Morgan Stanley analysts have put a $300 price target on SpaceX stock. They cite its "near-monopoly launch economics," which will enable its satellite connectivity and AI businesses to scale up at a cost advantage.
Indeed, SpaceX can already launch its low earth orbit satellites for Starlink at a lower cost than any rival. And its technology also enables it to launch rockets at a higher cadence than anyone else. It can build faster and cheaper than anyone in the rocket launch industry.
But SpaceX is competing with terrestrial telecom companies and data centers. That's why Starship, which can carry much larger payloads and can be rebuilt and relaunched faster than SpaceX's current Falcon rockets, will be essential to scaling the business further.
Morgan Stanley sees Starship opening the door to serious revenue growth, but it will also require substantial capital to scale that business to the levels its analysts estimate. In fact, the analysts don't expect SpaceX to produce positive free cash flow until 2035. They estimate the company's average cash burn at $84 billion per year between 2027 and 2034, with capital expenditures peaking in 2031 at $300 billion.
In other words, SpaceX will need to raise about $700 billion in additional capital. "If debt markets cannot absorb this financing need, SpaceX may need to issue equity, reduce growth investment, or slow deployment," lead analyst Adam Jonas wrote in his note to investors.
Today's Change
(
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%) $
-1.25
Current Price
$
114.01
Importantly, SpaceX isn't the only tech company with significant financial demands. We've seen the major hyperscalers issue both debt and equity this year to raise cash to fund their AI data center build-outs. Meanwhile, the Federal Reserve is considering raising interest rates this year due to elevated inflation.
As a result, the cost of capital is rising. That could mean SpaceX will have to pay higher interest rates on whatever bonds it issues. Or, if the bond market cannot absorb another $700 billion of SpaceX's debt, its stock price will likely decline as it dilutes shareholders by raising funds via new equity issues.
The other option would be for SpaceX to raise less capital and slow its Starship, Starlink, and orbital data center build-outs. But that will lead to slower growth and, subsequently, a lower stock price.
SpaceX's capital requirements are a huge overhang on the stock, no matter how it raises that cash. Investors need to be aware of that risk, even if they're bullish on the technology.
“I’m still short puts in there and the puts haven’t gone anywhere,” Sosnoff said, noting that though SpaceX stock has fallen, the price of his puts has remained the same.
SpaceX Faces Historical IPO ChallengesAdding to the tension, Elon Musk has issued a warning to short-sellers betting against SpaceX. Musk’s recent comments suggest that those maintaining significant short positions in SpaceX may face challenges, drawing parallels to his past confrontations with Tesla short-sellers.
Image: Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Veteran economist Peter Schiff has warned that the sharp decline in SpaceX (NASDAQ: SPCX) stock could be a warning sign for other high-cap assets that have benefited from investor enthusiasm.
In a July 22 post on X, Schiff highlighted that SpaceX last closed just above $115 per share, nearly 20% below its $135 IPO price and almost 50% below its post-listing peak of $225.
The stock’s reversal, he argued, could represent a broader shift in sentiment toward “overhyped” assets. Interestingly, the economist mentioned not only equities but cryptocurrencies too, which have really struggled this year.
“SPCX closed just above $115, nearly 20% below its IPO price and almost 50% below its high. This could be a harbinger of things to come for other overhyped stocks and cryptos. Look out below!” Schiff wrote.
$SPCX closed just above $115, nearly 20% below its IPO price and almost 50% below its high. This could be a harbinger of things to come for other overhyped stocks and cryptos. Look out below!
— Peter Schiff (@PeterSchiff) July 22, 2026 SpaceX stock price could serve as a market benchmark Trading at $115, the space exploration company is down 6.7% on the daily chart as of press time, July 23.
SpaceX stock daily price. Source: Google Finance
The decline has come amid concerns over lofty valuations, broader weakness in technology stocks, and potential future selling pressure as additional shares become available following lockup restrictions.
Known for his skepticism regarding speculative investments of all sorts, the analyst has repeatedly argued that markets may be pricing in overly optimistic expectations around artificial intelligence (AI), digital assets, and high-growth companies.
Notably, Schiff had issued a similar warning just a couple of days prior, claiming that the AI stock rally may be nearing a major reversal, pointing to the recent decline in SpaceX shares as a possible warning signal.
However, it must be noted that Schiff does not believe artificial intelligence itself is a bubble. Rather, he argues that investor enthusiasm surrounding AI-related stocks has likely become excessive.
“AI isn’t a bubble, but AI stocks are. The bubble has likely already popped,” Schiff wrote.
Similarly, he also pointed to increasing competition in the sector, particularly from lower-cost Chinese AI models such as Moonshot AI’s Kimi K3 and DeepSeek Chat. More precisely, he argued that U.S. AI companies could face pressure as investors reassess valuations and the long-term competitive landscape.
Featured image via Shutterstock
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Space Exploration Technology (SPCX -6.70%) stock closed below $120 on July 20, representing a decline of 25.5% since its first day of trading to the public on June 12. No single issue sent the price lower; it's likely a mix of factors that contributed to the stock price drop.
That said, the sell-off could create a favorable risk-to-reward setup, depending on where analysts see SpaceX stock trading over the next 12 months. But first, let's do a quick dive into that collection of potential reasons why the SpaceX stock price has fallen recently.
Image source: The Motley Fool.
The SpaceX decline There are several possible reasons investors have sold their SpaceX stock. One simple explanation is that the initial public offering hype cooled. For investors who bought on hype alone, they may have been inclined to sell after SpaceX hit a 52-week high of $225.64 but then started to trade lower.
Another reason could be concern that an upcoming lockup period was expiring. The next one occurs just before SpaceX reports its 2026 second-quarter earnings in August. The overall lockup period structure for SpaceX is staggered to prevent additional shares from flooding the market at once. But some investors may anticipate that insider selling could still lead to a larger stock price decline.
SpaceX also delayed the launch of its Starship rocket on July 16, which initially sent the stock lower in extended trading. And more broadly, some investors may just be worried about the recent sell-off around companies with ties to artificial intelligence (AI). Again, there's not one particular issue that explains all the selling pressure.
The next 12 months could look better for SpaceX SpaceX faces many challenges as it builds out AI infrastructure in space. It's not a profitable company, and its capital expenditures keep climbing. With that in mind, if SpaceX does become a leader in AI and builds what becomes the new normal of AI infrastructure through space-based data centers, the rewards could be meaningful.
Today's Change
(
-6.70
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-8.28
Current Price
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115.26
While the stock struggles, analysts remain relatively bullish on SpaceX over the next year. Of the 36 analysts tracked by CNN, the median price target is $225 a share. From the July 20 closing price of $119.85, that would be a return of more than 87% in a year.
That said, there's no guarantee that the median price target will be reached. But what that does offer is a chance for investors to judge whether they think the potential to reach $225 is worth the risk and whether they'd be comfortable holding shares for longer if it takes more than a year to reach that median price target.
Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
In June, the initial public offering (IPO) of Space Exploration Technologies (SPCX -6.66%) turned what seemed like a simple IPO into a reminder of how rule changes can reshape your portfolio. If you own an index fund, your portfolio may have been affected by new rules surrounding the IPO, even if you don't own SpaceX.
It all depends on which index funds you hold.
Image source: Getty Images.
What happened Whenever a company is added to a major index, every fund that tracks that index must buy it to stay in line with the benchmark, regardless of price. And that's precisely what happened as the Nasdaq-100 and Russell 1000 each changed their rules to fast-track the inclusion of SpaceX and other major IPOs that are expected this year.
S&P Dow Jones Indices, which maintains the S&P 500, chose not to change its rules, but index funds that follow the Nasdaq-100 and Russell 1000 had to make room for SpaceX by selling a sliver of every existing security or asset. As fund managers worked to remain aligned with their indexes, giants like Apple, Microsoft, and Nvidia were trimmed. The results have been subtle but represent a very real shift in the risk and sector weights for millions of investors' portfolios.
Today's Change
(
-6.66
%) $
-8.23
Current Price
$
115.31
The way both Nasdaq and Russell changed their rules to allow the mega IPO to enter sooner than usual -- rather than wait months or years for inclusion -- is what makes this moment stand out. The move concentrates a bundle of forced buying into a short window, quickly turning passive strategies into an active bet on a single, high-profile listing.
The potential implications SpaceX's share price to date has been volatile, but that doesn't mean losses are inevitable. The fact that some of the world's largest financial firms and venture capitalists are betting on it may enhance the company's resilience to economic downturns and market fluctuations, making it a stable investment with plenty of room to grow. In other words, those who own an index fund or ETF that includes SpaceX could see their portfolios grow enough to more than offset the trimming of other market giants.
S&P's decision not to change its rules could lead to missed gains if SpaceX appreciates dramatically. On the other hand, it might just protect them from loss. Only time will tell.
In the meantime, SpaceX's debut serves as a reminder that high-profile IPOs don't just affect the new stock. They also alter every portfolio holding an index that welcomes them.
Dana George has positions in Apple. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
