SpaceX Drops After Analysts Question Valuation and Bond Sale
SpaceX shares fell sharply on Monday after KeyBanc adopted a more cautious view of the company’s valuation.
The stock dropped around 7% as investors reconsidered whether SpaceX’s long-term growth prospects could justify its premium market value following a powerful post-IPO rally.
SpaceX Launches Senior Notes Offering
SpaceX also launched an offering of senior unsecured notes on Monday.
The company reported approximately $100.8 billion in cash and cash equivalents as of June 19.
SpaceX plans to use the proceeds to repay bridge financing and support general corporate purposes.
The bond sale added another factor for investors to assess as the company continues expanding its capital-intensive space, satellite and artificial intelligence businesses.
KeyBanc Starts SpaceX Coverage
KeyBanc initiated coverage of Space Exploration Technologies with a Sector Weight rating.
The brokerage acknowledged that SpaceX has substantial long-term growth opportunities. However, it believes many of those expectations are already reflected in the current share price.
Six analysts currently rate SpaceX stock as a Buy. KeyBanc holds a neutral Sector Weight position, while CFRA remains the only brokerage with a Sell rating.
Analysts Praise SpaceX’s Market Leadership
KeyBanc described SpaceX as the dominant company in space launches and related industries.
Nevertheless, the firm believes the current risk-to-reward balance appears relatively even.
Analysts want greater visibility into the development of Starship before adopting a more bullish position on SpaceX stock.
The next-generation rocket remains essential to several major parts of the company’s long-term strategy.
SpaceX Valuation Trades at a Major Premium
According to KeyBanc’s 2027 estimates, SpaceX shares trade at approximately 29 times price-to-sales and 71 times enterprise value to EBITDA.
These valuation multiples represent a significant premium compared with companies in the space, communications and artificial intelligence sectors.
The high valuation means SpaceX may need to deliver strong revenue growth, improving profitability and successful execution across several divisions to support its current market price.
SpaceX Operates Across Three Main Businesses
SpaceX divides its operations into three primary segments: Connectivity, Space and Artificial Intelligence.
The Connectivity division includes Starlink, the company’s satellite internet service. This unit generated approximately 61% of SpaceX’s revenue in 2025.
The Space segment covers launch operations and vehicles such as Falcon 9 and Starship.
Meanwhile, the Artificial Intelligence division includes the Grok chatbot and xAI’s computing infrastructure following the February 2026 merger with Elon Musk’s AI company.
Starlink Remains SpaceX’s Main Profit Engine
Starlink continues to generate most of the company’s profits.
The satellite internet business produced approximately $11.4 billion in revenue during 2025. It also recorded an adjusted EBITDA margin of around 63%.
KeyBanc believes the Connectivity division could eventually support a significant portion of SpaceX’s enterprise value on its own.
This would allow investors to treat the Space and AI businesses as additional growth opportunities rather than essential parts of the core investment case.
SpaceX AI Revenue Could Grow Rapidly
SpaceX’s AI division remains unprofitable, but it has secured several major long-term computing contracts.
These agreements reportedly include an Anthropic contract worth approximately $1.25 billion per month and a separate Google deal valued at around $920 million per month.
KeyBanc forecasts that the AI segment could generate approximately $50.6 billion in revenue by 2027.
If achieved, this would make artificial intelligence the company’s largest medium-term growth driver.
Grok Faces a Critical Prove-It Period
Despite the expected growth in computing revenue, xAI’s Grok chatbot has not yet achieved significant adoption among US businesses.
KeyBanc estimates that Grok holds only 3.1% of the US business AI market. By comparison, Anthropic accounts for approximately 41%, while OpenAI holds around 39.5%.
The firm described the next 12 to 24 months as a critical “prove-it phase” for Grok.
SpaceX must demonstrate that the product can improve adoption and compete more effectively against established AI platforms.
Starship Development Remains the Key Risk
KeyBanc views Starship’s development timeline as the most important variable affecting the SpaceX investment case.
The rocket is central to deploying the next generation of Starlink V3 satellites.
Full reusability could also lower launch expenses and improve the economics of SpaceX’s satellite operations.
In the longer term, Starship may support more ambitious projects, including orbital data centres.
Investors Await Starship Flight 13
Starship Flight 13 is scheduled for June 29.
KeyBanc believes the rocket will ultimately succeed. However, its analysts are using a conservative development timeline because of the technical and operational challenges involved.
Further delays or failed tests could pressure investor sentiment and postpone important commercial milestones.
In contrast, a successful flight could strengthen confidence in SpaceX’s long-term growth plans.
Limited Share Float Could Increase Volatility
SpaceX has approximately 13 billion shares outstanding. However, only around 5% of those shares were included in the initial public float.
Elon Musk controls approximately 42% of the company’s shares. His position remains subject to a lock-up period until June 2027.
The limited number of publicly available shares could contribute to sharp price movements as investor demand changes.
Although SpaceX remains the leading company in commercial spaceflight, its premium valuation, Starship execution risks and uncertain AI adoption could continue creating volatility for the stock.
