One of the most successful companies in the history of the public markets had its IPO. SpaceX raised $75 billion with a valuation of about $1.77 trillion. It sold 555.5 million shares at $135. At the same time, the demand for stocks was four times higher than the number of shares and about 30% of the IPO was reserved for retail investors.
Nevertheless, the first couple of weeks of trading has already brought the dark sides of this historic moment to life: volatility.
The excitement went down, shares came back near the IPO level, and it is claimed that they have erased about $700 billion of market capitalization compared to their post-IPO peak. The stock even dropped by more than 10% in a day, which put pressure on early investors.
Market analysts have determined that as of July 8, 2026, SpaceX is still considered one of the most volatile IPO stocks for this year. This means that the stock is still in the proximity of the IPO range; thus, the initial excitement is over, and valuation discovery has started.
Traders should consider this an important transition because SpaceX is not influenced anymore by news surrounding the IPO alone. In addition to that, the stock takes into account many other factors such as the expectations of analysts, projected earnings, Starlink performance, launches, and sentiment toward high valuation tech companies.
The main question here is very easy: is it a natural correction or the start of a bigger drop?
Why the sell-off matters
It is common for stocks to retreat after an initial public offering. Some shareholders might sell to realize gains, some institutional shareholders might reduce their holding, while others might need time for valuation.
Nevertheless, what is special about the decline in SpaceX is that it is a serious one. It is not based anymore on excitement around the IPO, but on whether SpaceX has the capability to perform and grow fast enough to match one of the most ambitious valuations in history of initial public offerings.
And there is an obvious contradiction here – SpaceX is among the best long-term growth prospects available on the market, but its stock price is highly demanding.
SpaceX is priced for the future
According to the provided market data, SpaceX generated approximately $18.7 billion in revenue in 2025 while reporting an operating loss of roughly $2.6 billion. At a valuation near $1.77 trillion, the company trades at an estimated price-to-sales ratio around 94.
That means investors are not buying SpaceX based on current earnings. They are buying expectations.
For the valuation to make sense over time, SpaceX needs to show strong progress in several areas:
- revenue growth
- margin improvement
- Starlink expansion
- launch activity
- government and defense contracts
- AI-related monetization through xAI
- a clearer path toward profitability
If the company delivers, the premium valuation may remain supported. If growth slows or profitability remains unclear, the stock may face additional pressure.
For this reason, earnings reports from SpaceX and other news coming out of the company in the future should be particularly noteworthy. The point is not that SpaceX needs to prove that it is capable of growing at all – this is expected from it anyway. What matters is whether it will be able to grow sufficiently rapidly and become more profitable, as well as build necessary infrastructure.
The bullish case is bigger than rockets
This thesis for future growth is not confined solely to space launches.
SpaceX owns several growth levers at once. Firstly, Starlink provides exposure to satellite internet demands across the world, including those for remote regions, enterprise customers, aviation, maritime services, and governments.
Launching is another important aspect of its business operations. Here, SpaceX enjoys a good reputation as both a supplier of launches for commercial entities and the US government thanks to its reusable rockets and active launches schedule.
The third part of the equation here is the relationship with xAI. In case these efforts are incorporated into the ecosystem of Musk Enterprises, investors may keep valuing SpaceX not only as an aerospace company.
Some estimates reported by Yahoo Finance assume that SpaceX will be able to grow revenues up to $50-80 billion per year in 2027 if current tendencies in this regard persist. This is one of the main reasons why some people believe the latest sell-off to be just a correction and not a crash.
Of course, not just revenues matter in this situation. Margins and losses also play a significant role.
Another reason investors continue to watch SpaceX closely is the scale of its potential addressable markets. Starlink is not just a satellite internet project; it could become a global connectivity platform across consumer, enterprise, maritime, aviation, and government segments.
Retail participation can increase volatility
Around 30% of the IPO was allocated to retail investors. This is an important detail for traders because retail-heavy participation can make price action more emotional and aggressive.
Retail-driven stocks often experience faster momentum moves, stronger reactions to headlines, larger profit-taking waves, and higher short-term volatility.
For SpaceX, this effect may be even stronger because the company combines three powerful market narratives: Elon Musk, space technology, and AI.
This does not make the stock weaker fundamentally, but it does mean traders should expect sharp swings even when the long-term story remains unchanged.
Technical view: the IPO zone is the key level
Technically speaking, the IPO region has emerged as the most crucial region on the chart.
Following the drop, SpaceX has moved back to near where it first started listing itself. The IPO region now serves as a psychological and technical battle ground.
The stock can make an effort to get its momentum going again if the buyers manage to hold off at the IPO region. Technical traders can wait for stabilization, higher lows, bullish volume, and a return towards former post-IPO highs.
Should the IPO region fail, the bearish case will be even more powerful. The breakdown below this region will indicate weak demand and further repricing.
Simply put, the IPO region may serve to define the next trend.
Why investors compare SpaceX to Tesla
An additional reason why SpaceX has continued to draw the attention of investors despite the sell-off has been due to Elon Musk’s track record.
In its early days, Tesla had gone through significant criticism regarding valuation, profitability, production issues, and overly ambitious growth targets. However, despite all the problems faced by the company, Tesla eventually managed to transform into one of the most successful businesses in the world despite the early skepticism.
It should be noted that it does not imply that SpaceX will go through the same transformation process. Nevertheless, it provides the explanation of the willingness of certain investors to pay an elevated price for the stock of the company.
The bullish view is based on the assumption that SpaceX will eventually develop multiple large-scale businesses based on the Starlink satellite internet system, launches of its rockets for commercial and government clients, defense and infrastructure contracts, and AI-related activities via xAI integration.
Those who buy the stock assume that there is a lesson which Tesla has taught us: the market may start rewarding the market leadership in the distant future even if there are no earnings at this point of time.
Risks and catalysts
Now that SpaceX has entered the post-IPO phase, the market’s interest will shift to the company’s ability to prove its worthiness of such high valuation through business development.
The main risks to monitor are:
- pressure on valuation due to non-fulfillment of growth expectations
- operating losses and margin concerns
- delays in Starlink rollout or launches
- regulatory or technological obstacles
- volatility resulting from retail and headline impact
- weakness of high-growth tech shares
Catalysts could include:
- good quarterly report
- quick Starlink subscriber acquisition
- signing new contracts related to launches or defense
- xAI developments
- strategic comments from Elon Musk
- defending the IPO zone
The main task for traders is not only the release of news but the market’s reaction to it. If the updates will provide a stimulus for prolonged buying sentiment, then the bull case will be strengthened. Otherwise, SpaceX may be facing further repricing.
What does this mean for traders?
SpaceX remains a high-potential but high-risk stock. The long-term growth story is still attractive, but the market now needs proof that future expansion can justify the company’s premium valuation.
For traders, volatility is likely to remain elevated. The stock may react sharply to earnings, Starlink updates, launch activity, government contracts, AI news, and statements from Elon Musk.
The IPO zone remains the key technical area to watch. Holding above it may support recovery attempts, while a sustained breakdown could signal a deeper repricing phase.
The main takeaway is simple: SpaceX may become one of the most important public companies of the next decade, but expectations alone are not enough. From now on, the market will focus on execution, financial performance, and growth delivery.