Less than a month after completing the largest initial public offering in history, SpaceX Inc. (NASDAQ: SPCX) has surrendered more than a quarter of its post-listing gains, igniting a fierce debate on Wall Street over whether the pullback is a discounted entry point or a warning of deeper declines ahead.
Shares of Elon Musk’s aerospace and AI conglomerate closed at $148.30 on July 8, down roughly 26.5% from their intraday peak of $202 reached in the first three trading sessions. The sell-off accelerated even as the stock was fast-tracked into the Nasdaq 100 Index, slumping more than 6% on its first day in the benchmark to break below the $150 level for the first time.
Against the cooling market sentiment, two prominent tech investors — Cathie Wood of ARK Investment Management and Gene Munster of Deepwater Asset Management — have emerged as steadfast bulls, doubling down on their long-term conviction even as broader caution grows.
Wood, whose ARK Innovation ETF (ARKK) is known for backing high-growth, disruptive technology, has been the most high-profile dip-buyer since SpaceX began trading. On July 7, ARKK added 44,200 SpaceX shares valued at approximately $7.09 million, marking the fund’s third consecutive purchase during the pullback.
SpaceX now ranks as the seventh-largest holding in the ARKK portfolio, making up about 4% of assets with a position worth nearly $266 million. To fund the buildup, Wood has trimmed stakes in more mature tech names including Advanced Micro Devices Inc. and Alibaba Group Holding Ltd., reallocating capital toward SpaceX’s cross-cutting exposure to space infrastructure and artificial intelligence.
ARK’s internal modeling projects SpaceX could reach a $3.1 trillion enterprise value by 2030 in an optimistic scenario, implying more than 60% upside from current levels, driven by synergies across its Starlink satellite broadband, orbital data center and launch vehicle businesses.
Munster, a former lead Apple analyst and managing partner at Deepwater Asset Management, has laid out a more fundamental bull case centered on what he calls “sovereign AI” — a fully self-contained technology stack that no rival can replicate.
In Munster’s framing, SpaceX is the only company in the world building an end-to-end AI ecosystem anchored by four pillars: reusable rocket launch capability, the global Starlink constellation, its Grok large language model, and the planned Terafab semiconductor foundry.
“Google still relies on external fabrication from Broadcom and TSMC, doesn’t own last-mile network delivery, and lacks a launch vehicle to deploy infrastructure off-world,” Munster wrote in a recent investor note. That vertical integration — from silicon manufacturing to data transmission to model training — insulates SpaceX from supply chain bottlenecks that constrain Alphabet Inc., OpenAI and other AI leaders, making it a core technology holding for long-term investors, he argued.
For all the long-term promise, most market strategists warn against rushing in, citing three overlapping headwinds likely to keep volatility elevated through the rest of the year.
First and most immediate is an impending supply shock from staggered lock-up expirations. SpaceX sold just 555 million shares in its $75 billion IPO, out of 13.1 billion total shares outstanding — meaning less than 5% of its stock is currently available for public trading. The remaining 95% is held by employees, early backers and insiders under multi-tranche lock-up agreements.
The first wave of roughly 911 million early-release shares is set to become tradable as soon as late July or early August, following the company’s second-quarter earnings report. That alone would more than double the public float to 1.5 billion shares. Additional tranches will be released every few weeks through late October, pushing the total float above 3 billion shares — a more than fivefold increase from today’s levels. Historical precedent shows such a rapid expansion of available shares often pressures prices as insiders monetize their holdings.
Second, history is not on the side of mega-cap IPOs. An analysis of the 15 largest U.S. initial public offerings by market value at pricing — excluding SpaceX — shows the average stock falls 23% from its offer price at some point in its first year of trading, and ends the year roughly 2% below its IPO level. High-profile names including Meta Platforms Inc., Uber Technologies Inc. and UiPath Inc. all suffered maximum drawdowns of more than 50% in their debut year.
If SpaceX follows that historical pattern, shares could drop to around $104 at their trough — roughly 30% below current levels — at some point in the next 12 months.
Third, the stock’s valuation remains stretched relative to current fundamentals. SpaceX trades at more than 100 times trailing sales, by far the highest multiple in the Nasdaq 100 and well above the 9-times average for the broader technology sector.
The company lost nearly $4.9 billion in 2025, and capital expenditures hit $10 billion in the first quarter of 2026 alone — nearly one-third of its total spending last year — as it ramps up Starlink deployment, orbital data center development and Terafab construction. With its most transformative projects still in early stages, a clear path to sustained profitability remains elusive.
Even widely viewed bullish catalysts have failed to lift sentiment. Its fast-tracked inclusion in the Nasdaq 100 and unanimous buy ratings from all 12 IPO underwriters did little to stem the sell-off, a sign that much of the positive news was already priced in during the initial post-IPO rally.
There is broad consensus on Wall Street that SpaceX holds unique technological advantages at the intersection of aerospace and artificial intelligence, with substantial long-term commercial potential. But in the near term, the combination of looming share supply, a premium valuation and execution uncertainty suggests the stock will remain highly volatile.
For most investors, the prevailing advice is to avoid chasing the dip. Better entry points are likely to emerge once lock-up pressures have been fully absorbed and SpaceX’s moonshot projects — from orbital data centers to in-house chip manufacturing — show clearer signs of commercial traction.
