Yahoo Finance
With investors increasingly questioning whether massive AI and infrastructure spending will generate adequate returns, Space Exploration Technologies Corp (NASDAQ:SPCX) has become one of the stocks caught in the broader valuation reset.
SPCX has dropped below its $135 IPO price after a sharp rally to all-time highs of $225.64.
With the stock trading at about $123, it has shed about 45% in share price from its all-time high.
It is also down by about 9% from its IPO price.
The significant share price pullback, as initial IPO enthusiasm cools, comes as investors increasingly assess whether the price was justified.
SpaceX's valuation assumes flawless execution, which remains a big concern.
The stock has traded at about 45x estimated 2026 sales, far above most large technology companies.
Investors are therefore paying for many years of future growth rather than current earnings.
The IPO valuation implied expectations consistent with revenue approaching roughly $178 billion by 2035 and potentially exceeding $500 billion over the following decade.
In 2025, the company's sales rose 33% to $18.67 billion, with Starlink accounting for about 60% of the total.
SpaceX's premium valuation stems from the expectation that the company will not only dominate commercial launches and satellite internet but also become a major player in AI infrastructure and space.
Much of the valuation also depends on Starship becoming fully reusable and the company achieving large Starlink expansion.
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