SpaceX (SPCX) has fallen below its $135 IPO price for the first time roughly five weeks after its market debut, adding a new test for a stock that had surged quickly after listing and then lost momentum.
On July 15, the stock dropped to an intraday low of $132.75, its weakest level since listing, before trimming losses to finish at $135.27. SpaceX opened at $150 on June 12 and reached a record high of $225.64 on June 16. Since then, the shares have remained under pressure and are now down nearly 40% from that peak.
The report says SpaceX’s market capitalization fell from nearly $3 trillion to about $1.8 trillion in about four weeks, erasing more than $1 trillion in value. Even so, it still ranks as the seventh-largest listed company in the United States, between Broadcom at about $1.88 trillion and Meta at about $1.72 trillion.
Most analysts are still on the buy side
The drop below the offering price has not led to a broad downgrade on Wall Street. According to Yahoo Finance data cited in the report, 27 of 31 analysts rate the stock Buy or Strong Buy. The average target price stands at about $242, implying nearly 80% upside from current levels.
Needham kept its Buy rating in its latest report and raised its target price to $250 from $200. The firm’s case centers on the links across SpaceX’s businesses: launch services, satellite broadband, direct-to-cell connectivity, ground-based and future in-orbit data centers, and AI-related products. The report says that combination is still difficult for the market to price fully.
Lockup expirations are emerging as the main variable
The article argues that Wall Street’s bigger concern is not the symbolic break below the IPO price alone, but the wave of lockup expirations expected after the company reports earnings in mid-August. About 1.37 billion Class A shares could become available in early August, with another 319 million shares expected around the end of the month.
A one-time jump in supply typically weighs on valuations and increases volatility. That is why this move below the IPO price is being treated as more than routine profit-taking in the report.
The backdrop has also turned less forgiving. Investors are said to be questioning whether SpaceX’s heavy spending on data centers and infrastructure can turn into matching profits within a reasonable period.
Part of a wider valuation reset in AI and space trades
The report places SpaceX’s decline in a broader repricing of high-expectation names. It says the “Magnificent Seven” — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — fell about 9% in June as a group. It also notes that AI chip company Cerebras, after raising $5.55 billion, saw its stock drop below its May IPO price of $185.
On that reading, the valuation reset tied to AI and space narratives is already underway, and SpaceX has become one of its most visible examples.
Two near-term checkpoints: earnings and Starship
Analysts broadly described the pullback as a natural unwind of what the article calls a “story premium.” The report says the market had already priced in a large amount of optimism tied to Elon Musk, AI and the long-term space theme. Without stronger earnings to support that valuation, the stock may continue to move closer to business fundamentals.
At the same time, the article says a break below the IPO price does not automatically settle the long-term case. It points to Facebook, now Meta, which traded below its offering price for nearly a year after listing before later posting sizable gains.
In the near term, the market is watching two events. The first is the earnings release due in mid-August, which the report says will be the first real test of whether revenue growth can catch up with valuation expectations. The second is Starship’s 13th test flight, the next launch of what the article describes as the largest and most powerful rocket ever built and the second launch of the third-generation V3 vehicle in less than two months.
During the previous test flight in May, the Super Heavy booster was pushed off its expected position during stage separation and suffered heat damage. Some engines failed to relight, and the booster did not return successfully. Even Evercore ISI analyst Kutgun Maral, who is described as constructive on the stock, said Starship has not yet proven it can operate at scale. The first real payload mission is expected in the second half of this year.
For SpaceX, the break below the IPO price is not the endpoint in this report. The more important question now is whether August earnings and the next Starship flight can deliver tangible progress.