AI Hype Cools? SpaceX Market Cap Wipes Out Over $1 Trillion

Musk's space exploration company SpaceX (SPCX-US) saw its stock sharply decline on Friday (17th), dropping nearly 7%. Calculated from its historical peak in June, the company's market capitalization has evaporated by over $1 trillion. This continued cooldown in the post-IPO honeymoon period for the rocket and artificial intelligence (AI) giant casts a shadow over AI-related stocks and the IPO market.

SpaceX shares hit a low of $122.12 during trading, a drop of up to 6.9%, reducing its market cap to approximately $1.61 trillion. Compared to its peak of around $2.64 trillion on June 16th—the third trading day after listing—its value has shrunk by more than $1 trillion. The current share price has also fallen below its IPO offering price of $135.

The sell-off was primarily driven by the last-minute cancellation of the Starship heavy-lift rocket launch. SpaceX announced that the mission was called off due to engine issues, with a new launch attempt expected in a few days. This news dragged the stock lower.

Following the completion of the largest IPO in history, SpaceX's stock initially surged. Earlier this month, it was added to the Nasdaq-100 Index, and several Wall Street firms maintained optimistic outlooks. The current average 12-month analyst price target remains at $235.34, far above the current trading price.

However, the persistent stock weakness has raised market concerns about whether the AI-related IPO boom is cooling. SpaceX initially positioned AI as a key investment thesis during its IPO, planning to build space-based data centers to capture a potential $26.5 trillion market, positioning itself as a major beneficiary of AI infrastructure.

Although SpaceX's listing significantly revived Wall Street investment banks' underwriting businesses—pushing Q2 equity capital markets advisory revenues to their highest since 2021—the ongoing price correction has prompted investors to reassess whether AI stock valuations are overheated and to reevaluate risk tolerance for high-growth companies.