Shares Continue Falling After Sharp Selloff
SpaceX (NASDAQ:SPCX) remained under pressure in premarket trading on Tuesday after suffering a steep 16.4% decline in the previous session, as investors reassessed the company’s valuation following its strong post-IPO rally.
The stock ended Monday at $154.59, only slightly above its June 12 IPO opening price of $150. Since listing, shares had climbed as high as $225.64 before the recent pullback.
By 04:18 ET (08:18 GMT) on Tuesday, the stock was down a further 2.9% in premarket trading.
$400 Billion in Market Value Erased
The sharp decline wiped approximately $400 billion from SpaceX’s market capitalization, highlighting growing investor caution after the company’s rapid ascent following its market debut.
Market participants are increasingly debating whether SpaceX’s long-term growth opportunities are sufficient to justify its premium valuation.
Debt Offering and Cash Position Revealed
On Monday, SpaceX announced a senior unsecured notes offering and disclosed that it held approximately $100.8 billion in cash and cash equivalents as of June 19.
The company stated that proceeds from the debt issuance will be used to repay bridge financing and support general corporate activities.
KeyBanc Takes More Neutral View
The selloff followed the initiation of coverage by KeyBanc, which assigned a Sector Weight rating to the stock.
The brokerage argued that much of SpaceX’s long-term growth potential is already reflected in the current share price.
Among analysts covering the company, six maintain Buy ratings. KeyBanc adopted a neutral stance, while CFRA remains the only firm with a Sell recommendation.
Leadership Position Acknowledged, but Valuation Raises Questions
KeyBanc described SpaceX as “the dominant leader in space launch and space-adjacent verticals” but suggested that the current balance between risk and reward appears less compelling until investors gain greater clarity regarding the development of the next-generation Starship rocket.
Based on KeyBanc’s 2027 projections, SpaceX trades at roughly 29 times sales and 71 times EV/EBITDA, representing a substantial premium to companies operating in the space, artificial intelligence and communications sectors.
Diverse Business Model Supports Growth Story
SpaceX currently operates through three primary business divisions.
The Connectivity segment, which includes the Starlink satellite internet platform, accounted for 61% of total revenue in 2025.
The Space division covers launch services and vehicles such as Falcon 9 and Starship, while the AI segment includes the Grok chatbot and xAI computing operations following the February 2026 merger with Elon Musk’s artificial intelligence venture.
Starlink Remains the Main Profit Driver
Starlink continues to generate the bulk of the company’s profits, producing approximately $11.4 billion in revenue during 2025 and delivering an adjusted EBITDA margin of 63%.
“At sufficient scale, Connectivity alone is capable of supporting a meaningful portion of enterprise value, which we believe limits downside to the overall story and allows the remaining segments (AI, Space) to be valued more as incremental upside rather than required for the thesis to hold,” the analysts wrote.
AI Business Offers Significant Potential
Although still operating at a loss, SpaceX’s AI division has secured several major computing agreements in recent months.
These include a contract with Anthropic worth approximately $1.25 billion per month and another deal with Google valued at roughly $920 million per month.
KeyBanc forecasts AI segment revenue will reach approximately $50.6 billion by 2027, making it the company’s largest growth contributor over the medium term.
However, the firm cautioned that adoption of xAI’s Grok model remains limited, with U.S. enterprise penetration standing at just 3.1%, compared with 41% for Anthropic and 39.5% for OpenAI.
As a result, analysts believe the next 12 to 24 months will represent a “prove it phase” for the product.
Starship Development Remains Critical
According to KeyBanc, the pace of Starship’s development remains the most important variable in the investment case.
The rocket is expected to play a central role in launching next-generation Starlink V3 satellites, lowering launch costs through full reusability and eventually supporting the deployment of orbital data centers.
The next Starship mission, Flight 13, is scheduled for June 29.
While analysts remain optimistic about the program’s long-term prospects, they emphasized that “we take a conservative approach on its development timeline.”
Limited Float Adds Another Dynamic
SpaceX currently has approximately 13 billion shares outstanding, although only about 5% were included in the public float at the time of the IPO.
In addition, Elon Musk’s stake, representing roughly 42% of outstanding shares, remains subject to a lock-up agreement that extends until June 2027.