SpaceX Loses Over Half Its Value in First Month as a Public Company

SpaceX's Brutal First Month on the Stock Market

SpaceX has had a rough start as a publicly traded company. Just one month after its record-breaking debut on the stock exchange, its shares have lost more than half their value. The company's market capitalization has fallen by over $500 billion, leaving it at roughly $1.4 trillion.

The sell-off has been compared to Facebook's disappointing IPO in 2012, though the scale is far larger. SpaceX's decline in market value is about five times greater than Facebook's post-IPO drop. The upcoming release of SpaceX's first quarterly earnings report as a public company is now the key event investors are waiting for, as they look for signs that the company's ambitious valuation can be justified.

The pressure on the stock has been building from several directions. SpaceX continues to spend billions of dollars each quarter, its price-to-revenue ratio is above 70, and its debt is nearly double its cash on hand. Adding to the strain, the lock-up period that has prevented early investors from selling their shares is set to expire, which could bring more supply to the market. Short sellers have profited heavily from the decline, with gains of around $8.3 billion so far, according to S3 Partners.

The stakes are high not just for SpaceX but for its investors, who are betting that the company's future growth — driven by the Starship rocket program and its AI infrastructure ambitions — will eventually translate into strong financial results.

What the First Earnings Report Will Really Tell Investors

Why the Stock Dropped Despite a Strong Business Narrative

SpaceX's decline reflects a gap between its current financials and its future expectations. The company is valued on its potential, not its present earnings. Its heavy spending, negative free cash flow, and debt load have made investors nervous, especially after Tesla's recent disappointing results raised questions about Elon Musk's ability to deliver on ambitious promises. At SpaceX, the scale of the bet is even larger.

Starship Is the Core of the Bull Case

For optimistic investors, SpaceX's future depends almost entirely on Starship, its next-generation fully reusable rocket. If Starship works as intended, it could drastically lower launch costs, speed up the expansion of the Starlink satellite network, and make space launches far more efficient and profitable. But if the program falls short, costs will rise, Starlink expansion will slow, and SpaceX will need more capital. The company's reputation would also suffer. The last Starship test flight in July saw the Super Heavy booster separate as planned but fail to relight its engines during landing, ending in an unsuccessful splashdown in the Gulf of Mexico.

The AI Bet Brings Both Revenue and Risk

SpaceX's merger with xAI in February has opened a new front. The company is building orbital data centers and AI infrastructure, which requires massive investment in processors and computing power. Just before its IPO, SpaceX signed a deal with Google that is expected to bring in about $920 million per month from AI computing capacity. Anthropic has reserved all available capacity at the Colossus 1 data center in Memphis, and SpaceX also has an agreement with Reflection AI. But the AI strategy carries risks: Grok has won contracts with the U.S. Department of Defense but has also drawn investigations and lawsuits in Europe and the U.S. over concerns about deepfake pornographic images.

What the First Earnings Report Will Show

Most analysts do not expect the financial results themselves to be decisive. Instead, they will focus on progress with Starship, clarity on chip supplies, regulatory approvals for future launches, capital expenditure plans, and the status of the $60 billion acquisition of AI startup Cursor, expected to close in the third quarter. Despite the sell-off, several investment banks still recommend buying the stock, viewing the decline as a test of investor patience rather than a change in the company's fundamental story.

What to Watch When SpaceX Reports

What investors should watch when SpaceX reports:

• Management's comments on Starship test timelines and any updates on the next launch attempt.
• Progress on the $60 billion acquisition of Cursor and whether it remains on track to close in the third quarter.
• Details on Starlink subscriber growth and revenue, which will show whether the satellite network is becoming a reliable cash generator.
• Updates on the Google AI computing deal and whether the expected $920 million in monthly revenue is materializing.
• Any new information on capital expenditure plans for AI data centers and chip supply agreements.
• Signs of insider selling once the lock-up period expires, which could add further pressure on the stock.