Why has SpaceX stock continued to fall? Experts explain
SpaceX stock has fallen back to Earth.
Shares of the Elon Musk-led company have declined in four consecutive trading sessions, plunging to a level 40% below a peak attained in the frenzied aftermath of an initial public offering (IPO) last month.
As of Thursday afternoon, the stock price stood at about $133, putting it slightly lower than the IPO price of $135.
Some analysts who spoke to ABC News attributed the dropoff to sputtering demand as investors move past the company's splashy public listing and take a closer look at its bottom line. Volatility often follows in the wake of an IPO, they acknowledged, while differing in their assessments of the firm.
"This type of reversal tends to happen," David Brown, professor of finance at the University of Arizona, told ABC News
Still, Brown pointed to what he considers a heightened degree of uncertainty surrounding SpaceX, which notched the largest IPO of all time before it had turned a profit.
"Will it make money, and will it make enough money to make all of this worthwhile?" Brown said.
SpaceX did not immediately respond to ABC News' request for comment.
The retreat in the company's stock prices arrived before the firm's 13th Starship test flight, which was set to take place on Thursday, but was ultimately scrubbed after engine issues.
SpaceX builds and operates spacecraft, including thousands of satellites deployed in support of its Starlink satellite internet service. In February, the company merged with xAI, a Musk-led AI company that offers a chatbot in competition with the likes of OpenAI's ChatGPT and Anthropic's Claude.
The company's revenue jumped to $18.7 billion in 2025, soaring 33% compared to the previous year, a financial filing showed. Nearly a quarter of that revenue came from Starlink, which counted millions of subscribers. Still, SpaceX failed to turn a profit, registering a loss of $4.9 billion last year.
Despite its limited financial track record, SpaceX soared in the days following its IPO on June 12.
At its peak, the share price reached $225, marking a rise of 66% in four days. The buying spree launched SpaceX into orbit among the world's five-largest companies by market capitalization, leaving its value beyond Amazon and Meta.
"What drove the price so high? History has proven this happens when there's a lot of publicity around a high-profile company coming to market for the first time," Dominic Pappalardo, chief multi-asset strategist at Morningstar Wealth, told ABC News.
Roughly 5% of the company's shares made their way onto the public market, meaning the burst of demand among eager investors collided with a limited supply of stock, Pappalardo said.
That combination pushed the price into the stratosphere, Pappalardo added, but enthusiasm ebbed as SpaceX faded from the headlines over the ensuing weeks.
"Some of that demand has subsided, and you see the price falling precipitously along with that," Pappalardo said.
SpaceX tumbled last week, even in the aftermath of favorable news. The company joined the Nasdaq 100, clearing the way for a potential influx of investment as funds pegged to the major index were expected to add the firm. The burst of demand had likely already been priced into the stock, however, some analysts told ABC News.
"People knew these index funds were going to have to buy," Brown said.
While acknowledging recent turbulence, analysts disagreed over where the company's shares are headed.
Some analysts touted its earnings potential in the lucrative aerospace and AI industries, even as others bemoan what they view as pie-in-the-sky initiatives like space-bound data centers.
Observers seeking evidence of potential shareholder gains can look no further than Musk-led Tesla. Over the past five years, Tesla shares have soared 81%, outpacing a 74% rise in the S&P 500 over that time, although Tesla stock has also experienced a period of volatility. Electric vehicles account for the vast majority of revenue generated by Tesla. Similarly, Starlink subscriptions and government contracts currently make up the bulk of SpaceX sales.
But shares of Tesla have also been buoyed by moonshot ventures like self-driving taxis and humanoid robotics. In theory, those efforts resemble Musk-led initiatives at SpaceX (like orbital data centers).
"I continue to believe that SpaceX and Musk are a key part of the AI revolution, and it's hard to think about the future without SpaceX as a big part of it," Dan Ives, a partner and senior managing director at Yorkville Ives & Co. who follows the tech sector, told ABC News.
