The shares that couldn’t stop climbing in June can’t stop falling in July. SpaceX, which completed the largest initial public offering in history on June 12, has seen its stock sink to its lowest level since the debut, according to Zacks Investment Research, as the initial frenzy gave way to questions about valuation, regulatory risk, and competition.
The numbers tell the story. SpaceX priced its IPO at $135 a share, valuing the company at $1.77 trillion, and the stock closed its first day at $161, up 19%. Within days it pushed above $225, making early investors look prescient. Since then it has given back most of those gains, sliding toward and at times below the offering price as momentum faded.
The decline is not a collapse; it is a reset. At the IPO, SpaceX traded at more than 100 times its 2025 revenue, a multiple that even the most optimistic analysts called rich. History is not kind to such valuations: among the largest U.S. IPOs of the past two decades, the average stock has fallen more than 30% from its peak at some point in its first year, a pattern SpaceX is following closely.
The market’s concerns are specific. SpaceX is spending enormous sums on AI infrastructure, building data centers and computing capacity to support its artificial-intelligence ambitions, and investors are questioning when that spending turns profitable. Data-center operations have also drawn regulatory scrutiny, and analysts said the risks of new rules on energy use, water, and grid connections are not fully reflected in the share price.
Competition is another factor. Blue Origin’s $10 billion fundraising at a $130 billion valuation, announced this week, gives the market a private benchmark for launch economics that looks cheap next to SpaceX’s public price. Rivals are also winning business: United Launch Alliance and China’s launch programs have taken shares of the market that SpaceX once had to itself.
The Nasdaq 100 inclusion, announced recently, was supposed to be a stabilizing force. Index funds that track the benchmark will buy the stock, providing a floor of demand that individual investors cannot match. But inclusion has not been enough to arrest the slide, and analysts note that index buying is gradual while sentiment can turn in a day.
Lock-up expirations loom over the next phase. Early investors and employees are restricted from selling for a set period after the IPO, and when those restrictions lift, the supply of shares available to the market will expand sharply. The prospect of insider selling has weighed on other mega-IPOs, and SpaceX’s schedule is no different.
The company’s business, by most measures, is strong. Starlink has become a cash engine, launch cadence has never been higher, and the Starship program is progressing toward operational flights. The disconnect between the business and the stock price is the crux of the debate: bulls say the pullback is an entry point, bears say the valuation was always the story and the business cannot catch up.
Elon Musk has weighed in, as he does. The chief executive has called the stock’s decline noise and pointed to the company’s order book, its rocket backlog, and its AI contracts as evidence that the fundamentals are intact. Investors have heard that argument before, from Tesla shareholders who rode a similar trajectory.
The stakes extend beyond SpaceX. The IPO was a referendum on the entire space economy, and its aftermath is the reference point for every private space company seeking capital. If SpaceX’s stock stabilizes and climbs, the sector benefits; if it keeps sliding, the cost of capital for the whole industry rises.
The company’s underlying performance has been strong. Starlink has become a reliable cash generator, launch demand remains at record levels, and SpaceX has signed major AI compute contracts that give its data-center ambitions a revenue base. The question the market keeps asking is whether the price already reflects all of it, and the stock’s slide suggests the answer is no.
Historical patterns offer little comfort. Among the ten largest U.S. IPOs by market value since 2006, the average stock traded below its offering price at some point in its first year, and several never recovered. SpaceX’s defenders argue that its revenue growth, its order book, and its near-monopoly on U.S. launch services make it different; its skeptics note that every mega-IPO had a comparable argument.
What would change the narrative is evidence, not argument. A quarter of strong earnings, a successful Starship flight, or a major new contract would give the stock a reason to climb. Until then, the market is treating SpaceX like any other richly valued company that must prove it can grow into its multiple.
For now, the market is doing what markets do after a record debut: it is repricing. Whether SpaceX is worth $1.77 trillion will be settled in the coming quarters, one earnings report, one launch, and one lock-up at a time. The first test arrives this month, when the company reports its first quarterly results as a public company.
