Topline
SpaceX on Wednesday fell below its IPO price for the first time, with shares reaching an all-time low as investors have shown greater skepticism about artificial intelligence stocks and trends.
Key Facts
SpaceX’s stock fell 2.1% around 12:45 p.m. EDT, reaching nearly $2 below its $135 initial public offering price.
Shares had somewhat rebounded as of 1:30 p.m. EDT, but remained below the $135 mark.
The stock is now down about 11% since it debuted on June 8, when SpaceX raised over $85 billion in its record-shattering IPO.
Part of the tumble is likely rooted in investor skepticism about AI trade, according to Investopedia, which noted some experts believe investors are shifting away from “pricing in promise” and are instead more closely evaluating companies linked to artificial intelligence.
Matthew Maley, chief market strategist at Miller Tabak, told Reuters the breach of the IPO price “raises the narrative that the stock is up on fluff, on speculation, on froth, and not on real fundamentals.”
Tangent
Concern around SpaceX could be rooted in the company’s AI-related capital expenditure, which reached $7.7 billion in the first quarter, accounting for about 75% of the company’s total capex. SpaceX acquired Elon Musk’s AI startup, xAI, in an all-stock transaction in February.
Forbes Valuation
We estimate Musk’s net worth at $856.8 billion as of Wednesday. Musk became the first trillionaire ever with the IPO of SpaceX, controlling a 38% stake in the company, but his wealth is down significantly from a high of $1.45 trillion shortly after SpaceX’s public debut
Contra
Analysts’ consensus price target for the stock is roughly $247, Axios reported, citing FactSet data that revealed 80% of 21 analysts have a “buy” or “overweight” recommendation on SpaceX. SpaceX bulls have reportedly noted SpaceX will need to make years of large investments to execute on Musk’s vision for the company.
Key Background
SpaceX, which was largely an aerospace company before the xAI merger, has directed much of its assets toward AI development. The company sees a $28.5 trillion total addressable market, with $26.5 billion of that wrapped up in AI, according to a Securities and Exchange Commission filing. Musk has positioned his company as the earliest adopter of orbital data centers, which he claims can address energy limitations for booming AI infrastructure. SpaceX said in an SEC filing the space-based data centers could be deployed as early as 2028. The company also has tens of billions of dollars worth of AI-related agreements with Google, Anthropic and Nvidia, the latter of which SpaceX has bought hardware from to provide computing infrastructure for clients.
SpaceX Shares Close Up 19% After Historic IPO Makes Musk World’s First Trillionaire (Forbes)
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