SpaceX's stock briefly dropped below its IPO price on Wednesday, falling below $135 before rising over the level again.
On June 16, SpaceX's shares closed at $201.80, capping a blistering rally fueled by optimism surrounding the company's leadership in commercial space launches, satellite communications, and emerging artificial intelligence initiatives. Since then, however, the stock has steadily surrendered a significant portion of those gains as traders locked in profits and reassessed the company's valuation and is now trading below the opening price.
The drop comes even after the company entered the Nasdaq 100, unleashing a new wave of passing investors buying the stock as funds tracking the index matched its composition.
Those passive funds were required to purchase SpaceX shares as part of the benchmark's rebalancing, a move that typically creates additional buying pressure. Yet the anticipated demand was not enough to offset broader selling, suggesting many investors had already positioned themselves ahead of the inclusion.
Regardless, major investment banks initiated research coverage last week with bullish ratings. Morgan Stanley assigned the stock an "overweight" rating and a $300 price target, while Bernstein began coverage with an "outperform" rating and a $239 target. RBC Capital Markets also rated the shares "outperform," setting a $225 target, while UBS launched coverage with a "buy" recommendation and a $210 12-month price objective.
Analysts view SpaceX as the clear leader in reusable launch technology, a competitive advantage that has helped it dominate the commercial launch market while lowering costs. At the same time, its Starlink satellite internet network continues to expand globally.
Different analysts believe the company could leverage its engineering expertise and computing infrastructure to develop AI products ranging from autonomous software development tools to large language models capable of competing with offerings from Anthropic and OpenAI. Others see long-term opportunities in orbital data centers, an emerging concept that could combine satellite infrastructure with AI computing needs.
However, research firm MoffettNathanson initiated coverage with a neutral rating, arguing that much of SpaceX's future growth already appears reflected in the share price. CFRA took an even more cautious stance, recommending investors sell the stock amid concerns that expectations have become overly optimistic following the company's blockbuster market debut.
