SpaceX stock slides after record IPO

SpaceX (SPCX) completed a record $86 billion initial public offering last month, marking one of the largest market debuts in recent years. In the first three trading sessions after the IPO, the company’s shares jumped almost 50%, reflecting strong initial demand. That early optimism has since faded, with the stock reversing much of its early gains.

Earlier in the week of July 24, the shares fell to $110.85, a level described as about 18% below the IPO price. On July 24, the stock closed at $115.07, leaving it still under its offering level despite the scale of the company’s listing. The recent trading shows a sharp shift from the initial post-IPO enthusiasm to a more cautious stance among investors.

Analysts tracking the stock note that the ongoing selloff has pushed SpaceX’s market value to a point where the share price is close to implying no value for its artificial intelligence business. The stock briefly touched a low of $110.85, which some analysis links to a scenario in which investors effectively write down the contribution of AI operations.

One assessment suggests that many investors expect the stock to move toward $100 when a lock-up on an initial batch of shares expires next month, potentially allowing some insiders to sell. At such levels, the implied valuation of the AI segment would be minimal or even negative in some market models, despite the company’s continued investment in the area.

A Morgan Stanley (MS) analyst, Adam Jonas, has set a $300 price target on SpaceX shares, indicating significant potential upside from recent trading levels. More than 50% of that target is attributed to the company’s AI operations, including its Grok and Cursor initiatives. This valuation contrasts with the prevailing market scepticism embedded in the current share price.

Jonas highlights that many investors heavily discount the AI segment, citing high capital expenditure requirements, uncertain economics, and the management attention the business demands. He characterizes this gap between cautious sentiment and relatively unchanged fundamentals as an attractive entry point for some investors. The divergence underscores how differently market participants are valuing SpaceX’s core space activities compared with its AI ambitions.

The debate over SpaceX’s valuation now centers on how much credit the market assigns to its developing AI operations versus its established space and connectivity businesses. Recent price action indicates that many shareholders are focusing more on near-term risks and costs associated with AI than on its long-term contribution. As the lock-up expiration approaches, trading in the stock may continue to reflect this tension between short-term selling pressure and longer-term growth expectations embedded in higher analyst targets.