SpaceX Shares Drop Over 4% Following $400 Billion Valuation Plunge

SpaceX (SPCX), the aerospace and artificial intelligence giant led by Elon Musk, saw a steep decline in its shares on June 22, plummeting 16.4% and erasing approximately $400 billion in market capitalization after its record-breaking initial public offering (IPO) on June 12, 2026. This marked the second-largest single-day market cap loss ever recorded for a U.S. company.

The company's shares began trading at an IPO price of $135 and surged to $160.95 on their first day, attracting substantial investor interest. Fueled by post-IPO euphoria, the stock reached a peak of $225.64 on June 16, before quickly paring back these gains. On June 22, shares closed at $154.60 and continued to slide in premarket trading on June 23, extending losses by over 4%.

The sharp downturn was attributed to several factors, including concerns over Federal Reserve interest rate hikes, profit-taking, and mixed analyst ratings. Additionally, SpaceX's announcement of plans to offer senior unsecured notes to raise capital and refinance existing debt, including a $20 billion bridge loan for Elon Musk's artificial intelligence company, xAI, reportedly surprised some investors. The company also disclosed that it held $100.8 billion in cash and cash equivalents as of June 19.

These market developments caused SpaceX's market capitalization to fall from nearly $3 trillion to around $2 trillion, dropping the company to the seventh most valuable publicly traded company globally. Investors are showing reduced risk appetite and increased selectivity, particularly towards high-valuation technology and AI companies. This trend suggests that markets are adopting a more cautious stance towards recent IPOs.

SpaceX operates three main business divisions: space transportation, Starlink satellite internet, and artificial intelligence, which includes Grok and xAI. The company recently announced a significant $6.3 billion computing power agreement with open-source AI startup Reflection AI, expected to generate $150 million in monthly revenue starting July and continuing until the end of 2029. This deal supports the company's strategic moves in the AI sector and highlights its long-term growth potential despite current market volatility.

Analysts and market experts hold diverse views on the future performance of SpaceX shares. While some believe the company's long-term growth prospects may justify its current valuation, others argue that the stock remains overvalued and could experience further corrections. Market expectations will likely be shaped by factors such as the progress of the company's Starship rocket and the commercial success of its artificial intelligence initiatives.