Space Exploration Technologies Corp. (NASDAQ:SPCX) stock fell for a seventh straight session on Monday, dropping 3.3% to $119.85. That’s below its $135 IPO price from June. The stock has fallen about 27% in July alone. SpaceX’s market cap dropped to $1.52 trillion, pushing it below Meta Platforms and out of the top seven U.S. companies by value. The stock has now lost $1.16 trillion since its June 16 peak of $2.68 trillion.
Two things drove the slide. On July 16, the company’s Starship rocket aborted at the last second before liftoff for its 13th test flight, erasing about $100 billion in market value that day. SpaceX modified Starship’s propulsion system afterward and pushed the retry to July 23.
At the same time, short sellers piled in. Bearish bets grew from about 40 million shares three weeks ago to roughly 185 million shares now, about 29% of SpaceX’s tradable float and an estimated $25 billion in bets, according to S3 Partners. Ortex Technologies says short sellers are already sitting on $8.7 billion in paper profit since the IPO. As Ortex co-founder Peter Hillerberg put it, “Rather than take profits, the bears kept adding the whole way down.”
This brings up a key question: Is this a fair repricing of an overhyped debut, or is this a buying opportunity into a company some analysts still value at more than $2 trillion?
BULL CASE
William Blair’s analyst Louie DiPalma launched coverage with a bullish rating and argues the market undervalues Space Exploration Technologies Corp. (NASDAQ:SPCX)’s launch business on its own, assigning it roughly $300 billion. It is a fraction of what he sees as the company’s full potential. The Falcon 9 rocket has launched more than 650 times against three launches for Blue Origin’s New Glenn. So, analyst DiPalma estimates Space Exploration Technologies Corp. (NASDAQ:SPCX) controls over 90% of the rocket launch market, putting it roughly a decade ahead of its closest competitors.
Starlink has moved well past satellite internet too. It has taken share from in-flight connectivity and satellite communications providers, and SpaceX has signed data center leases with Anthropic and Google. DiPalma argues the stock shouldn’t move much on any single Starship test result. In his view, a bigger risk would be Google or Anthropic pulling back on those data center leases given their size. He is also not too worried about the company relying too much on Elon Musk, noting that SpaceX has a strong team of experienced leaders behind him, including COO Gwynne Shotwell and CFO Brett Johnson.
BEAR CASE
Short sellers are betting the opposite: that a $1.6 trillion company trading below its IPO price shows real skepticism, not a temporary dip. As of July 17, nearly half of Space Exploration Technologies Corp. (NASDAQ:SPCX)’s tradable float was out on loan to short sellers. Reuters reports the weakness partly shows investor concern over the firm’s debt-funded AI infrastructure spending. The lockup schedule adds a concrete near-term risk on top of that. Only about 5% of SpaceX’s roughly 13 billion shares were available to trade at the IPO.
KeyBanc expects early investors and employees to get their first big chance to sell stock, about 11% of all shares, around the time SpaceX reports its second-quarter earnings, with another 4% unlocking around day 70 and more unlocking after third-quarter earnings. That’s a meaningful new supply of shares landing on a stock that’s already down seven sessions in a row. The Starship abort is also a reminder that the bull case depends on execution. Starship needs to become fully reusable and human-rated before SpaceX’s most ambitious future businesses, including orbital data centers, can start generating revenue.
CONCLUSION
SpaceX isn’t in Insider Monkey’s hedge fund database yet. It went public in mid-June, after the cutoff for Q1 2026 filings, so the first real look at institutional ownership won’t arrive until funds report their current-quarter positions. Short interest is the best available read on how smart money is positioned right now, and it leans firmly bearish, i.e., the stock price will go down.
The next big moment for Space Exploration Technologies Corp. (NASDAQ:SPCX) is the rescheduled Starship launch on July 23. A successful test flight would give optimistic investors clear evidence of progress right as early owners get allowed to sell their stock. But if it fails again on top of seven straight days of falling stock prices and a record short interest, then it will be much harder to argue that this price drop is just a normal dip for an overpriced debut.
While we acknowledge the risk and potential of SPCX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SPCX and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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