SpaceX Has Nosedived 50% From Its All-Time High, and It May Realistically Lose Another 50% Before Its Valuation Makes Any Sense
2026-07-28 11:06
•Sean Williams •The Motley Fool
•••••• ••••• Axe Capital view
SpaceX Valuation Looks Fragile — Watch the AI Hype
SpaceX shares have dropped sharply post-IPO, and look set for further weakness amid high valuation and reliance on AI-driven growth.
SpaceX’s dramatic 50% drop from its IPO high isn’t surprising given the stretched 38 times sales multiple and lack of profits. What worries me more is the company’s heavy reliance—93% of its addressable market—on AI applications through xAI. If the AI bubble deflates, which history shows can happen abruptly, SpaceX’s top-line assumptions will quickly come undone. For South African investors, this is a reminder to be wary of tech stocks riding a narrow thematic wave. Unlike well-capitalised JSE stalwarts like Naspers or Prosus, which have diversified portfolios and cash flows, SpaceX’s risk is concentrated at the edge of innovation and hype. Expect volatility to continue and insider selling suggests confidence isn’t strong at the top. The USD/ZAR might see some pressure if global risk aversion rises alongside SpaceX fears, but the rand’s path will also hinge on local factors. this is just my opinion and not financial advice
Avoid SpaceX and similar hyped tech plays for now. Focus instead on high-quality JSE counters with proven earnings like Naspers or Standard Bank. Watch USD/ZAR for broader risk trends but don’t chase moonshots.
- SPCX
- Naspers
- USD/ZAR
- AI bubble bursting hurts SpaceX valuation
- Global risk-off pressure weakens rand
7/10
SpaceX shares have plummeted 50% from their post-IPO peak of $225.64 to $113.37, with analyst concerns that the stock could fall another 50% before valuation becomes reasonable. The company trades at 38x forecast sales despite lacking recurring profits and sustainable operations. With xAI representing 93% of its addressable market, SpaceX faces significant risk if the AI bubble bursts, similar to historical tech bubbles.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Sean Williams
Categories: Equities, IPOs, Technology, AI, Semiconductors, Financials
Tickers: SPCX, GOOG, GOOGL, GOOGM, GOOGN
Sentiment: Negative - Stock has declined 50% from IPO peak with analyst projections of another 50% decline. Company lacks recurring profits, sustainable operations, and trades at unsustainable 38x sales multiple. Heavy dependence on xAI (93% of addressable market) creates vulnerability to AI bubble burst. Insider unlock schedule poses additional downside risk. Mentioned as a customer securing compute deals with SpaceX's xAI division, demonstrating AI adoption. However, no direct operational or financial impact discussed in the article. Relationship is noted as positive for AI adoption but not material to investment thesis.
Keywords: SpaceX IPO, stock decline, valuation concerns, AI bubble, tech stocks, insider selling, price-to-sales ratio
Insights:
- SPCX: Negative: Stock has declined 50% from IPO peak with analyst projections of another 50% decline. Company lacks recurring profits, sustainable operations, and trades at unsustainable 38x sales multiple. Heavy dependence on xAI (93% of addressable market) creates vulnerability to AI bubble burst. Insider unlock schedule poses additional downside risk.
- GOOG: Neutral: Mentioned as a customer securing compute deals with SpaceX's xAI division, demonstrating AI adoption. However, no direct operational or financial impact discussed in the article. Relationship is noted as positive for AI adoption but not material to investment thesis.
- GOOGL: Neutral: Mentioned as a customer securing compute deals with SpaceX's xAI division, demonstrating AI adoption. However, no direct operational or financial impact discussed in the article. Relationship is noted as positive for AI adoption but not material to investment thesis.