The Risk of ‘Unproven Outcomes’ Has This Analyst Betting SpaceX Stock Will Fall 30% from Here

It's hard to think of a company that has captured Wall Street's attention quite like Elon Musk-led Space Exploration Technologies Corp. (SPCX), better known as SpaceX. When the company made its historic Nasdaq debut on June 12, investors wasted little time piling in, driving its valuation to an eye-popping $2.1 trillion. The milestone not only placed SpaceX among the world's most valuable companies but also made Elon Musk the first person ever to achieve trillionaire status.

The excitement isn't just about rockets. SpaceX has built a powerful position across multiple fast-growing industries. It dominates the commercial launch market with its Falcon 9 rockets, operates Starlink, one of the world's fastest-growing satellite internet networks, and is already looking toward its next big opportunity of developing space-based data centers. For many investors, SpaceX isn't simply a space company. It's a bet on the future of artificial intelligence (AI), connectivity, computing, and innovation beyond Earth.

Given that backdrop, it's no surprise that SpaceX's stock market debut shook up the entire space sector. For years, investors wanting exposure to the booming space economy had few options beyond smaller and relatively unknown players. And suddenly, the industry's undisputed leader was available to buy. Money flowed into SpaceX almost immediately, while many smaller space stocks saw capital move elsewhere, creating a temporary liquidity vacuum across the sector.

But while enthusiasm is running high, not everyone on Wall Street is convinced the story is all upside. In a notable twist, SpaceX received its first “Sell” rating from investment firm CFRA on Friday, along with a $135 price target suggesting roughly 30% downside from current levels. So, is Wall Street getting carried away by SpaceX's enormous potential, or are there legitimate risks that investors may be overlooking?

About SpaceX Stock

Founded in 2002, SpaceX has grown into the largest space company in the U.S. and the world's most active launch provider, carrying out more launches each year than any other company globally. Best known for its reusable Falcon 9 rockets, SpaceX has played a major role in lowering the cost of access to space while expanding opportunities for commercial, scientific, and government missions. 

Its customers range from NASA and the U.S. Department of Defense to international space agencies and commercial satellite operators, placing the company at the center of today's rapidly evolving space industry. Beyond rocket launches, SpaceX has built a significant communications business through Starlink, its satellite internet network. The service has become a major contributor to the company's growth and is estimated to account for between 50% and 80% of SpaceX's revenue, helping fund its ambitious technology development and exploration programs. 

The company's reach expanded further in February with the merger of SpaceX and xAI, bringing together a leading space-and-defense contractor and a fast-growing artificial intelligence company that is investing heavily in data center infrastructure. The move reflects growing opportunities at the intersection of AI, communications, and space technologies. A major focus for SpaceX today is Starship, a fully reusable transportation system made up of the Super Heavy booster and the Starship upper stage. 

Designed to carry both crew and cargo, the system is intended to support future missions to the Moon, Mars, and beyond. Looking ahead, Starship remains central to Elon Musk's long-term vision of routinely transporting humans to Mars and establishing a sustainable human presence beyond Earth. While the path remains technically challenging, the project represents one of the most ambitious efforts underway to expand humanity's presence in space.

SpaceX's long-awaited arrival on Wall Street got off to a flying start. The company made its historic Nasdaq debut on Friday, with shares opening at $150 around midday and attracting strong investor demand from the outset. The stock continued to climb throughout the session, ending its first day of trading at $160.95 and signaling a warm reception from the market.

The momentum only accelerated from there. On Monday, SpaceX shares surged another 19.6% during their first full trading day on Wall Street, pushing the stock's gain since its debut to nearly 28.3%. The strong performance reflected investors' eagerness to gain exposure to a company widely viewed as a leader in the rapidly expanding space economy.

The offering itself was equally remarkable. SpaceX initially sold 555.6 million shares, raising a record-breaking $75 billion. But overwhelming demand prompted underwriters to exercise their "greenshoe" option, allowing the sale of an additional 83.3 million shares. As a result, the company ultimately raised an impressive $85.7 billion, turning its market debut into one of the largest and most talked-about public offerings in recent memory. The company’s market capitalization currently stands at roughly $2.5 trillion. 

The Numbers Behind the SpaceX Hype

A closer look at SpaceX's financials reveals why investors are so excited about the company's future, and why some analysts remain cautious. According to its prospectus, SpaceX generated $18.7 billion in revenue in fiscal 2025, marking a strong 33% increase from the previous year. Much of that growth came from Starlink, whose satellite internet business continues to gain momentum around the world. The company's Connectivity segment was the biggest growth driver, generating approximately $11.39 billion in revenue in 2025, up an impressive 50% from the prior year. 

The increase was fueled by continued growth in Starlink subscribers, along with rising demand from enterprise and government customers. Meanwhile, Space segment revenue rose 7.6% to $4.09 billion, supported by higher launch activity and development work on government contracts. SpaceX's newly formed AI segment also delivered solid growth, with revenue increasing 22.2% year-over-year (YOY) to $3.20 billion as advertising, Grok and X subscriptions, and data licensing agreements expanded.

But while revenue growth has been impressive, profitability tells a very different story. SpaceX reported a GAAP net loss of $4.94 billion for full-year 2025 and followed that with another sizable loss of $4.28 billion in the first quarter of fiscal 2026 alone. The main reason behind widening losses is Elon Musk's aggressive push into AI infrastructure. The company is investing heavily in AI capabilities and the data center capacity needed to support them, even if it means sacrificing profits in the near term.

The numbers highlight the vast size of the investment. Total capital expenditures jumped 85.8% YOY to $20.73 billion in fiscal 2025. Of that amount, the AI segment alone accounted for $12.72 billion, representing roughly 61.4% of total capital spending. The pace only accelerated in the first quarter of fiscal 2026, when total capital expenditures surged a massive 144% from the year-ago period to approximately $10.11 billion.

Despite the heavy spending, SpaceX's revenue engine continues to grow. First-quarter fiscal 2026 revenue increased 15.4% YOY to $4.69 billion. In many ways, SpaceX's financial story is becoming a tale of two companies. A fast-growing business generating billions in revenue across space, connectivity, and AI, while simultaneously pouring enormous amounts of capital into projects that may not pay off for years.

Musk, however, is clearly focused on the bigger picture. Responding to journalist and financial commentator Jon Erlichman on X, he wrote, "And I would be surprised if revenue is not greater than $1 trillion in 2031." It's a bold prediction, and one that helps explain why investors remain willing to look past today's losses and focus on the possibility of much larger rewards in the future.

Why One Wall Street Analyst Thinks SpaceX Stock Could Fall 30%

While many investors have embraced SpaceX's blockbuster market debut, not everyone on Wall Street is convinced the stock's meteoric rise is justified. On Friday, investment firm CFRA became the first major firm to initiate coverage with a “Sell” rating, arguing that too much of SpaceX's valuation is tied to ambitious projects that have yet to prove themselves commercially.

According to CFRA analyst Keith Snyder, investors are placing significant value on future opportunities such as Starship commercialization, orbital AI computing, and xAI's long-term monetization potential, despite these businesses still being in relatively early stages. While he acknowledged that Starlink remains SpaceX's strongest and most established business, Snyder cautioned that it faces challenges ranging from capacity expansion and regulatory hurdles to increasing competition from terrestrial broadband providers and other low-Earth-orbit satellite networks.

In CFRA's view, SpaceX's proven launch and connectivity businesses are valuable, but not valuable enough to support the company's current valuation on their own. The firm believes the market is underestimating the execution risks involved in turning SpaceX's most ambitious projects into profitable businesses and is assigning too much value to opportunities that remain largely unproven.