SpaceX Is Down 52% From Its IPO Peak. That Still Doesn't Make It a Buy.

The SpaceX stock price has cratered 52% from its post-IPO peak. Shares hit $225.64 on June 16th - just four days after the largest IPO in history - and have since sunk to roughly $108, where they were sitting as the market closed last week. That is a $1.2 trillion market-cap wipeout in under two months. The headline is dramatic enough that articles are already asking whether history offers a buying signal.

I've been looking at the numbers behind the headline, and here is my take: the market's correction from a momentum-fueled peak isn't a falling opportunity. It's a post-IPO digestion that hasn't finished yet. At $108, SpaceX still trades at roughly 73 times trailing revenue with a negative 45% net margin. The stock is battered, but it is not cheap.

What actually priced into that $225 peak?

The opening sprint was a textbook liquidity squeeze, not a valuation event. SpaceX priced its IPO at $135, selling 555.6 million shares and raising $75 billion - valuating the company at $1.77 trillion. Only about 4.2% of the company's shares were in the public float, the smallest for any mega-cap debut in U.S. history. A 30% retail allocation - the highest on record - funneled enormous demand through a tiny share pool. Individual investors bought nearly $370 million of SPCX in the first three sessions, quadruple what they put into Nvidia over the same period.

When that retail bid paused, there was no institutional bid large enough to replace it. The stock fell 31% in four trading sessions in late June, then continued drifting lower as broader AI-sentiment cooled and the reality of the company's economics caught up with the narrative. The Nasdaq 100 inclusion that should have provided a bid instead got front-run - investors knew index funds would buy, so they bought in advance and then sold into the actual index purchases. The stock has dropped roughly 13% since being added to the index.

The valuation gap - or lack thereof

Here is the question that matters. Has this 52% pullback brought SpaceX's valuation into a range where growth and fundamentals justify the remaining price?

SpaceX generated $18.7 billion in revenue in 2025, a 33% increase year over year. But the company lost $4.9 billion. In the first quarter of 2026, net losses were $4.28 billion. Starlink - the satellite internet business accounting for nearly a quarter of 2025 revenue - is the only profitable segment, generating nearly $1.2 billion in profit in the first quarter of 2026. The Space Launch division, which dominates the orbital launch market with a 95%-plus success rate, still burns cash on development. And the AI segment, which has become the primary justification for the stock's trillion-dollar valuation, is the biggest cash drain of all.

In the first quarter of 2026 alone, SpaceX spent $7.7 billion on AI capex. That is a $30.8 billion annual run rate - more than double the $12.7 billion the company burned on AI across all of 2025. Meanwhile, AI revenue in Q1 was $818 million, up from $3.2 billion for all of 2025. The segment is far from profitable, and the spending trajectory is accelerating, not moderating.

At $108, the stock's $1.43 trillion market cap still implies a 73x revenue multiple. Nvidia trades at roughly 35x revenue and is profitable at a 55% margin. Microsoft trades at roughly 12x revenue with a 35% margin. Even Tesla - another Musk venture, another growth story built on a smaller revenue base - trades at roughly 10x revenue with a positive 7% margin. SpaceX is unprofitable, spending more than double on AI infrastructure than it did on its core space business last year, and still commands a revenue multiple that dwarfs every mega-cap peer.

Morningstar's Nicolas Owens - the sole Wall Street analyst who marks the stock as overvalued - has a fair value estimate of $63 per share. That implies another 42% downside from current levels. The mean analyst target across all other Wall Street coverage is $236.72, but those targets were set in the days immediately following the IPO, when momentum and scarcity, not earnings, were doing the heavy lifting.

The moat is real - it just doesn't cover this valuation

I want to be clear about what SpaceX has going for it. The company's competitive moat is genuine. It dominates commercial orbital launches, launching more mass into orbit than all other providers combined over the past three years. Starlink connects over 10 million subscribers across 160+ countries through a constellation of 9,600 satellites - a distribution moat that no competitor can replicate quickly. Starship, if it executes, could multiply payload capacity by 10x versus Falcon 9. These are structural advantages, not temporary ones.

But a durable moat doesn't justify a valuation that assumes flawless execution across three highly capital-intensive businesses simultaneously - rocket development, satellite broadband expansion, and AI infrastructure buildout - while never having turned a consolidated profit. The moat protects the business from competitors. It doesn't protect the stock price from the math.

Morgan Stanley's Adam Jonas put a knife to the AI thesis when he wrote that a drop to $100 per share would imply zero or negative value for SpaceX's AI segment. At $108, we're not far from that line. The market is essentially assigning all the value to Starlink and launch operations, then treating the AI business as a liability.

The supply overhang hasn't cleared

There is a structural reason the stock may have further to fall before it finds real footing. The IPO's staggered lock-up arrangement is about to unlock a flood of shares. The first tranche - 911.5 million shares - hits the market on August 6th. By the end of the year, the number of freely tradable shares will expand to 5.33 billion, up from roughly 639 million today. That is an 8x increase in public float in under six months.

Short sellers have already circled the stock. Roughly 30% of the currently available shares are sold short, with shorts sitting on nearly $8 billion in paper profits since the June peak. As lock-up shares enter the market, that selling pressure compounds. The price needs to find a level where new buyers - not just retail momentum chasers - are willing to absorb that supply.

The August 4th earnings report is the next test

SpaceX releases its first public-earnings report after market close on August 4th. Total revenue is expected to be around $6.9 billion, driven by Starlink subscriber growth. Investors will watch for the AI capex run rate, Starlink profitability, and any forward guidance on the path to consolidated profitability. Given the market's recent reaction to massive AI capex at Tesla and Alphabet - both of which saw stocks fall after reporting strong results alongside elevated spending - a heavy AI investment number could pressure the stock further regardless of whether revenue growth looks solid.

My conclusion: Wait, don't chase

The 52% decline from peak is dramatic and attention-grabbing. But it doesn't change the underlying setup. SpaceX is a genuinely excellent company with real competitive advantages. That doesn't mean the stock is attractively priced. At 73x revenue, unprofitable, with accelerating AI capex, an expanding share supply, and 30% short interest - the risk/reward is not yet in favor of buyers.

I'm not saying the stock won't recover. I'm saying the correction hasn't gone deep enough to create asymmetric upside. The burden of proof in a setup like this falls on the buyers, not the sellers. Until earnings deliver a clear path toward profitability, until the AI capex question is answered, and until the lock-up overhang is absorbed, the smart move is patience.

Don't let the headline decline trick you into mistaking a falling knife for a buying opportunity. This one is still falling.