SpaceX shares briefly dip below IPO price as AI hype cools, one month after record listing

Elon Musk's SpaceX, whose founder still holds South African citizenship, has seen its stock slide below its $135 IPO price barely a month after a record $86 billion listing, its fourth straight day of losses. Analysts say investors are growing wary of how much of SpaceX's valuation rests on its xAI ambitions rather than near-term cash flow. Index-driven buying from Nasdaq 100 and Russell 1000 inclusion, relevant to local unit trusts and retirement funds with global tracker exposure, may have inflated early gains now unwinding. Wall Street remains broadly bullish, with an average price target implying 76% upside..By Carmen Reinicke.SpaceX shares slumped to their lowest level since the rocket, satellite, and artificial intelligence company went public, briefly falling below their initial public offering price, as investor fanfare quickly evaporated in the month since its trading debut.The stock fell 0.6% to close at $135.27 on Wednesday, ending the day just above the $135 per share level that SpaceX sold them to investors at last month as part of a record $86 billion offering after slumping below the key level intraday. It was the fourth consecutive day of declines for the stock.A company’s shares falling below the IPO price within days or weeks of its first trading day punctures the narrative that’s been carefully choreographed by the company and its bankers to hype up expectations. Putting shareholders in the red at such an early stage is a blow to confidence that some newly-listed firms don’t recover from.SpaceX shares have been subject to volatility usually associated with new IPOs, surging nearly 50% over their first three days of trading, only to lose nearly a quarter of their value over the next three sessions.“Investors are becoming more cognizant that much of SpaceX is about its xAI ambitions,” said Dec Mullarkey, managing director at SLC Management. “As markets get more cautious on the cost and efficacy of the intensive buildout, SpaceX plans may sound too far removed from immediate cash flow,” he added..There could be more pain ahead too. The first of many share lockups that have kept early investors from selling shares are set to expire once the company reports its first set of quarterly results — something it must do in the coming weeks. If those investors begin to sell after the expiration, it could lead to more downside pressure for stocks.Some of the stock’s early gains may have also been fueled by forced buying from passive index-tracking funds. Shares of the Elon Musk-led company were added to the Nasdaq 100 Index in July after Nasdaq Inc. changed its rules to allow newly listed, large-cap companies to be included in the index in as little as 15 trading days, down from the previous three-month minimum. The stock also became a member of the Russell 1000 Index in late June, just two weeks after its IPO. Bloomberg Intelligence analyst Rob Du Boff estimated that SpaceX’s inclusion in the Nasdaq 100 and FTSE Russell gauges would drive at least $5.4 billion in buying from index funds.Of course, being included in the indexes could be putting extra downside pressure on SpaceX shares also swept up in the artificial intelligence trade. The Nasdaq 100 shed 0.3% Wednesday, led by a selloff in chip stocks as investor concerns over the health of the AI trade continue. “There’s so much out there all at the same time, not just negative sentiment about what IBM said yesterday, but also negative sentiment about Elon as a personality and public figure, all of that kind of collides into this extra momentum to the downside in a moment in time where there’s pressure and profitability is going to be a key metric,” said Brian Mulberry, chief market strategist at Zacks Investment Management.Despite the slump, Wall Street remains largely upbeat on the stock. The end of a quiet period for analysts at banks that participated in the IPO ushered in a spate of bullish analyst reports, including Raymond James’ Street-high $800 price target..Read more:.SpaceX heralds a new era of mega IPOs, but history warns investors to be cautious: Jonathan Levin .More than 80% of analysts tracked by Bloomberg give the company a buy-equivalent rating, and their average price target of about $238 implies roughly 76% upside from where shares currently trade..© 2026 Bloomberg L.P..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.

SpaceX shares briefly dip below IPO price as AI hype cools, one month after record listing

Related Stories

Europe's stock market boom is a mirage — And "Dark" trading is to blame

Pretoria's trillion-dollar son: Why South Africa can't bring itself to celebrate Elon Musk

Jim Chanos has a warning for SpaceX investors — and his track record demands attention

BN Power Lunch: Joburg's Budget crisis, the $3tn IPO wave, and what it means for SA markets