The SpaceX logo is seen on a building at the company’s South Texas facility in Cameron County, Texas, July 22, 2026. (Photo by Reginald Mathalone/NurPhoto via Getty Images)
NurPhoto (from Getty Images)
At the close of the IPO day, SpaceX (Space Exploration Technologies Corp.) stock price was $160.95. On June 16, a few days after the IPO, the price was $201.80. Just over a month later, on Friday, July 24th, the stock price closed at $115.07. This means that the stock has fallen 28.5% from its initial price. It also meant that the market capitalization at its peak of about $3 trillion would be reduced by $1 trillion, leaving only $2 trillion.
That’s how Bloomberg came up with the headline in mid-July: “SpaceX downturn wipes $1 trillion in market value from peak.” This is the type of whiplash that shows how crazy Wall Street hype can get. All the expectations, or wishful thinking, were based on the magic that was supposed to happen. As reported by Bloomberg, Morgan Stanley analysts recently estimated that if the stock price drops to $100, that would mean investors are valuing the entire AI sector at $0.
(Always remember that one of the expectations for an IPO is that the early big investors will make a fortune by selling some of their shares to individual investors (which might mean you) at an inflated price. The hype is almost always intentional.)
Others, like Brandon Lingle, are heading for an IPO. san antonio express news He said SpaceX’s biggest earner is Starlink, its satellite-based internet access system. A more accurate description might have been that Starlink was not only the biggest moneymaker, but the only one. make a profit Part of SpaceX.
Two aspects of company valuation estimates interact here. One of the main factors investors use to calculate value is how well a company will do in the future. Valuation issues also include aspects such as assets, liquidity and cash flow, management team composition, competitive advantage, and intellectual property.
But in different ways, they all apply to understanding the future of your company. Therefore, the forward price-to-earnings ratio is often used as an indicator of corporate performance, along with the price-to-earnings ratio (PER). If you pay a certain price for a stock and its future performance suggests that the company will be worth more at some reasonable point in time, you can consider that stock to be a good value.
Estimating future performance and value is difficult because there is a lot of speculation. There are tools such as discounted cash flow analysis that can help you determine the value of an investment based on future cash flows. Unfortunately, while trying to determine future cash flows can be an exercise in expert insight analysis, in many cases it is probably an attempt at fortune-telling.
One could argue that the pricing exercise for SpaceX stock was just this. Although the Starlink portion is profitable, the project has been criticized for a variety of reasons, including increased congestion in high-traffic areas, poor customer service (Fast Company says the FCC has received more than 900 complaints in the past five years), the need for clear visibility and terms of cooperation, and growing resistance to launching more satellites, according to the site Starlink Insider. The company has 10.3 million customers in 164 countries, which makes it a relatively small niche player. For comparison, Verizon boasted a total of 129 million in 2025, with 116 million wireless retail, 11 million broadband, and 2 million Fios video connections. Sales in 2025 were $11.39 billion.
According to the SpaceX S-1 IPO filing, the space launch business has conducted approximately 650 launches to date, 85% of which have used reused boosters, and it is estimated that 80% of the global mass in 2025 will reach orbit as of March 31, 2026. In 2025, the space-related segment’s revenue was $4.09 billion.
The AI portion includes 350 million daily posts and 550 million monthly active users, and generated $3.2 billion in revenue last year.
Taking all of this into consideration, the total net income was a loss of $528 billion in 2025, compared to a loss of $4.27 billion in the first quarter of 2026.
Let’s take a look at each department. Note: There was no information regarding segment interest expense, interest income, or other non-operating expenses, so there was no final net profit/income figure by segment.
Connectivity revenue for the first quarter of 2026 was $3.26 billion, total costs and expenses were $2.07 billion, and quarterly operating revenue was $1.19 billion. The space business had revenue of $619 million and total costs and expenses of $1.28 billion, resulting in a loss of $662 million for the quarter. AI had revenue of $818 million, total costs and expenses of $3.29 billion, and a quarterly loss of $2.47 billion.
The space sector already claims to be responsible for 80% of mass-to-orbit transport. There is a limit to how much more you can get. Even if we had a near-technological monopoly on global business and had more than we could use, we could double the amount of work we do and the profits we make, and even if all that revenue became purely profitable, we would still be in the red.
As for the AI sector, losses are three times higher than revenues. The competition is much larger and more capable than space launches, and China continues to develop new and cheaper AI resources. The business case for AI to be competitive and economically viable is tenuous.
So let’s go back to Morgan Stanley’s estimates. “Most investors we speak to are pricing Grok & Cursor at a deep discount,” Morgan Stanley analyst Adam Jonas wrote in a note to clients on Friday, according to Bloomberg. “Many believe that AI has zero or even negative value, given the high capital investment requirements associated with space and connectivity, largely uncertain economic conditions, and the high degree of administrative time spent on businesses.”
The bank believes that “the current disconnect between increasingly bearish investor sentiment and largely unchanged fundamentals creates an attractive entry point for SpaceX stock.” In other words, at a price of $100 per share, it might make sense to buy some, especially given the number of analysts predicting the stock price will be in the hundreds of dollars, especially if the lockup for many shareholders expires and a sale becomes possible.
are they right? It’s hard to understand. Just look at how many “smart rich people” thought Theranos had such great investment potential. Or how many smart investors would have thought that Wirecard was a genuine business, rather than a mass of alleged fraud, as an extensive investigation by the Financial Times revealed?
Many analysts still believe SpaceX is worth much more than it appears. Perhaps they are right. Maybe things will work out. However, check your risk tolerance before purchasing.
