SpaceX shares fell below their IPO opening price on Tuesday as heavy selling across the technology sector placed additional pressure on the recently listed company.
SpaceX stock, trading under the Nasdaq ticker SPCX, extended the sharp losses recorded during the previous session. Concerns about its elevated valuation and uncertainty surrounding the wider artificial intelligence trade weighed on investor sentiment.
SpaceX Stock Falls Below IPO Opening Price
SpaceX shares dropped 16.4% on Monday after KeyBanc adopted a more cautious view of the company.
The brokerage argued that the stock’s valuation had become increasingly difficult to justify following its powerful post-IPO rally.
Shares ended Monday at $154.59, only slightly above the $150 opening price recorded during the company’s market debut on June 12. SpaceX stock had previously climbed as high as $225.64.
The decline continued shortly after Tuesday’s opening bell. SPCX fell another 3.7% to $148.88, pushing the stock below its IPO debut price.
Technology Selloff Pressures SPCX Shares
The decline in SpaceX stock came during a broader selloff in technology shares.
The Nasdaq 100 dropped approximately 2.9% after the market opened, while the S&P 500 declined around 1.6%.
Semiconductor stocks suffered particularly heavy losses as investors questioned whether the artificial intelligence investment boom could maintain its recent momentum.
The market weakness continued despite signs of progress in nuclear negotiations between the United States and Iran.
SpaceX Valuation Faces Greater Scrutiny
Monday’s decline erased approximately $400 billion from SpaceX’s market value.
The sharp reversal has intensified the debate over whether the company’s long-term growth opportunities can justify its elevated valuation following the initial post-IPO surge.
SpaceX currently trades at approximately 29 times projected sales and 71 times estimated enterprise value to EBITDA, based on KeyBanc’s 2027 forecasts.
These valuation levels represent a substantial premium compared with companies operating across the space, artificial intelligence and communications industries.
SpaceX Announces Senior Notes Offering
SpaceX also launched an offering of senior unsecured notes on Monday.
The company disclosed that it held approximately $100.8 billion in cash and cash equivalents as of June 19.
SpaceX plans to use the proceeds from the debt offering to repay bridge financing and support general corporate purposes.
The announcement added another factor for investors to evaluate as they assess the company’s capital requirements and long-term expansion plans.
KeyBanc Begins SpaceX Coverage
KeyBanc initiated coverage of SpaceX with a Sector Weight rating.
The brokerage described SpaceX as the leading company in space launches and related markets. However, its analysts believe many of the company’s long-term growth opportunities are already reflected in the share price.
KeyBanc said the stock’s current risk-to-reward profile appears balanced. The firm wants greater visibility into the development of Starship before adopting a more bullish position.
Six analysts currently rate SpaceX shares as a Buy. KeyBanc holds a Sector Weight rating, while CFRA remains the only brokerage with a Sell recommendation.
Starlink Remains SpaceX’s Main Profit Driver
SpaceX operates through three primary business segments: Connectivity, Space and AI.
The Connectivity division includes the Starlink satellite internet service. It generated 61% of the company’s total revenue during 2025.
Starlink remains SpaceX’s most important source of profit. The business produced approximately $11.4 billion in revenue during 2025, with an adjusted EBITDA margin of 63%.
KeyBanc believes that Starlink could eventually support a significant portion of SpaceX’s enterprise value on its own.
This would allow the company’s Space and AI divisions to be viewed as additional growth opportunities rather than essential components of the overall investment case.
SpaceX Expands Its AI Business
The AI segment includes the Grok chatbot and the xAI computing infrastructure added through the February 2026 merger with Elon Musk’s artificial intelligence company.
Although the division remains unprofitable, it has reportedly secured several major long-term computing agreements.
These include a contract with Anthropic valued at approximately $1.25 billion per month and a separate agreement with Google worth around $920 million per month.
KeyBanc estimates that SpaceX’s AI revenue could reach approximately $50.6 billion by 2027. This would make AI the company’s largest medium-term growth driver.
Grok Faces a Critical Test
Despite its growth potential, KeyBanc warned that the Grok AI model has yet to achieve significant adoption among US businesses.
Grok reportedly holds a 3.1% share of business adoption in the United States. This compares with approximately 41% for Anthropic and 39.5% for OpenAI.
The brokerage believes the next 12 to 24 months will represent a critical proving period for Grok.
SpaceX must demonstrate that it can convert its large infrastructure investments into stronger adoption, revenue and long-term profitability.
Starship Development Is a Key Catalyst
KeyBanc identified the development timeline of the next-generation Starship rocket as the most important variable in its SpaceX investment outlook.
Starship is central to the company’s plans for deploying advanced Starlink V3 satellites. It could also reduce launch costs through full reusability and eventually support orbital data centres.
Starship’s 13th flight is scheduled for June 29.
KeyBanc expects the rocket programme to succeed over time. However, the brokerage is using a cautious development timeline because of the technical challenges involved.
Limited Share Float Could Increase Volatility
SpaceX has approximately 13 billion shares outstanding, but only around 5% were included in the initial public float.
The limited supply of publicly traded shares may contribute to greater price volatility, particularly during periods of strong buying or selling.
Elon Musk owns approximately 42% of the company’s shares. His stake remains subject to a lock-up agreement until June 2027.
Until more shares become available, SpaceX stock could remain highly sensitive to analyst ratings, broader technology market conditions and developments involving Starlink, Grok and Starship.
