The stock had begun to behave like a meme stock
When SpaceX became the largest IPO in history last June, it carried with it not just a rocket company but a mythology — one built around Elon Musk's name, an AI acquisition, and the human appetite for believing in transformative futures. Within weeks, the stock had fallen 35 percent from its peak, as investors began to separate the story they wanted from the business that actually exists: one that launches rockets and operates satellites. This is a familiar arc in market history, where euphoria precedes reckoning, and where the distance between a compelling narrative and a verifiable balance sheet must eventually be crossed.
- SpaceX shares rocketed from a $135 IPO price to $225 in under two weeks, briefly making the company worth more than Amazon and Microsoft combined — then lost a third of that value just as fast.
- The AI narrative that fueled the frenzy — built on SpaceX's acquisition of Musk's xAI startup — began to crack when investors realized rockets and satellites, not chatbots, are what actually generate the company's $18 billion in annual revenue.
- Retail investors who bought in during the opening-day surge are now sitting on losses, with one analyst predicting the stock could fall further to around $115 based on underlying business fundamentals.
- Musk moved with calculated precision during the peak, using inflated stock to acquire AI coding startup Cursor for $60 billion in an all-stock deal that cost him virtually nothing in real terms.
- The first earnings report as a public company, expected in early August, will collide with the end of the employee lock-up period — potentially flooding the market with shares just as investors are forced to confront the gap between a $1 trillion revenue promise and an $18 billion reality.
SpaceX went public on June 12th at $135 a share and closed its first day at nearly $161. Within a week, shares had climbed to $225, briefly valuing the company above Amazon and Microsoft combined. The frenzy was powered by Elon Musk's celebrity and a compelling narrative: that SpaceX, having acquired his AI startup xAI earlier in the year, was really an artificial intelligence company in disguise. For a moment, that story was enough to make it the largest IPO in history.
The spell broke quickly. By early July, shares had fallen to around $145 — down 35 percent from their peak. The cracks appeared in telling ways: a Starlink price cut sent the stock down 8 percent in a single day, and when SpaceX joined the Nasdaq 100 on July 7th, it fell 4.4 percent while the broader market dropped only 1.7 percent. Investors were beginning to see the company for what it is — a rocket manufacturer and satellite telecommunications operator with $18 billion in annual revenue, not an AI powerhouse. Analyst Keith Snyder noted that the stock had behaved more like a meme than a business, and predicted further decline toward $115.
Musk, for his part, appeared unfazed. He declared SpaceX would reach $1 trillion in annual revenue by 2030 — roughly 55 times its current level — and demonstrated his command of market timing by using the stock's peak to acquire AI coding startup Cursor for $60 billion in an all-stock deal, effectively paying nothing in real value. One capital markets analyst called it a display of sophistication almost no other issuer could match.
The true reckoning, however, is still approaching. SpaceX's first earnings report as a public company is expected in early August, arriving just as the employee lock-up period expires and millions of shares may hit the market at once. That moment will force a direct confrontation between the $1 trillion vision Musk has sold and the $18 billion business that currently exists. Morgan Stanley has set a target price of $300, suggesting the dip is temporary. But as one analyst put it plainly: if SpaceX can do everything it says it will, investors may be holding the most valuable company ever built — it just has a great deal of work left to prove it.
SpaceX went public on June 12th at $135 a share, and by day's end the stock had climbed to $160.95. A week later it hit $225, briefly making it worth more than Amazon and Microsoft combined. The frenzy was real. Elon Musk's name alone was enough to draw crowds, but what really captured investor imagination was the narrative that SpaceX was fundamentally an artificial intelligence company. The firm had acquired Musk's AI startup xAI earlier in the year—home to the polarizing chatbot Grok—and had begun leasing data centre capacity to other tech firms. For a moment, that story was enough. The IPO became the largest in history.
But a month later, the spell had broken. By early July, SpaceX shares were trading around $145, down 35 percent from their peak and nearly 10 percent below the opening day close. The shift was sudden and telling. When Starlink announced a price cut in Memphis, Tennessee, the stock fell 8 percent in a single day. When SpaceX was added to the Nasdaq100 index on July 7th, the broader market dropped 1.7 percent while SpaceX plummeted 4.4 percent. The gap was not accidental. It reflected a dawning recognition among investors about what SpaceX actually does for money.
The company manufactures and launches rockets. It operates Starlink, a satellite telecommunications network. These are the engines of its revenue—$18 billion last year, according to public filings. The AI narrative, it turned out, was a sideshow. Keith Snyder, an analyst at CFRA, watched the pattern unfold with professional clarity. "If you bought around the first tick you're definitely underwater," he said of retail investors who piled in during the opening days. The stock had begun to behave like a meme stock, driven less by fundamentals than by online enthusiasm and the gravitational pull of Musk's name. Snyder expected further decline, predicting the stock could fall to around $115 a share based on actual business performance.
Musk himself seemed unbothered by the volatility. After the IPO made him the world's first trillionaire, he declared that SpaceX would generate $1 trillion in annual revenue by 2030—roughly 55 times its current take. He also demonstrated a willingness to weaponize the stock's swings. On June 16th, when shares spiked, SpaceX announced an all-stock acquisition of Cursor, an AI coding startup, for $60 billion. The timing was deliberate. By purchasing at that exact moment, Musk had essentially bought the company for nothing, using inflated stock as currency. Samuel Kerr, who heads equity capital markets analysis for Mergermarket, called it a display of "market sophistication that almost no other issuer has."
Yet the real test is still ahead. SpaceX has not yet reported earnings as a public company, though analysts expect the first report in early August. That disclosure will arrive alongside the end of the employee lock-up period—the window during which company workers who received shares as compensation are barred from selling. Millions of shares could flood the market at once. The earnings report itself will force a reckoning between Musk's $1 trillion revenue projection and the company's current $18 billion reality, between the AI story investors wanted to believe and the rocket business that actually pays the bills. Morgan Stanley, a lead banker on the IPO, has set a target price of $300 a share, suggesting the dip is temporary. But Kerr offered a more measured view: "If SpaceX can do all the things it says it will do, yes, investors are sitting on the most valuable company ever. But it's got a lot of work to do to get there." The next few weeks will determine whether the market believes that work is possible.
Citas Notables
If you bought around the first tick you're definitely underwater— Keith Snyder, CFRA analyst
If SpaceX can do all the things it says it will do, yes, investors are sitting on the most valuable company ever. But it's got a lot of work to do to get there.— Samuel Kerr, Mergermarket
La Conversación del Hearth Otra perspectiva de la historia
Why did investors suddenly care about SpaceX as an AI company when its main business is rockets and satellites?
Because Musk acquired xAI and started leasing data centre capacity. In a market obsessed with AI, that narrative was irresistible—more exciting than talking about Starlink pricing or launch schedules. It gave people a story they wanted to own.
But the core business didn't change. SpaceX was always a rocket company.
Right. The AI acquisition was real, but it was peripheral to revenue. When Starlink cut prices in Memphis, the stock dropped 8 percent in a day. That's when investors realized what actually matters to the bottom line.
So this is just hype meeting reality?
It's more specific than that. This is retail investors who bought at $150 or $160 discovering they overpaid for a story. The institutional investors who got in at $135 are fine. The people who chased the momentum are underwater.
Musk said $1 trillion in revenue by 2030. Does anyone believe that?
Morgan Stanley does—they set a $300 target. But the company made $18 billion last year. That's a 55-fold increase in a decade. It's possible if everything works perfectly. It's also a bet that requires faith.
What happens in August?
Earnings report, and the lock-up period ends. Employees can finally sell their shares. Millions of shares hit the market at once, potentially pushing the price down further. That's when we'll see if the market still believes in the story.
Is this a failed IPO?
Not yet. But it's a failed narrative. The company is valuable—just not as an AI play. Whether investors can accept that, and whether the actual business can deliver on Musk's promises, that's still being written.