SpaceX Stock Just Crashed Below Its IPO Price: Here’s the Bull Case Nobody Can Ignore

SpaceX (SPCX) stock is back around its IPO price, putting investors in a familiar dilemma: Is this a buying opportunity or another warning sign? Shares dropped nearly 5% on Thursday to $132.69, slipping beneath the company's $135 IPO price and ending a streak of six consecutive closes above that benchmark. The decline came after SPCX repeatedly struggled to break through $150, the price at which it opened on June 12.

For a stock that once surged to $225.60, the reversal has been dramatic. SpaceX has already fallen nearly 40% from its June peak and traded as low as $104.83 on Aug. 3. Yet the underlying business is growing at a remarkable pace. That makes the question of whether to buy SPCX stock more complicated than simply looking at the chart.

SpaceX Stock Is Struggling to Regain Its IPO Momentum

SPCX is now trading right around its IPO price and roughly 40% below its record high.

The immediate pressure is partly technical, with $150 emerging as a major resistance level. There is also a structural issue. SpaceX continues to bring previously restricted shares into the public market. About 319 million shares became eligible for trading on Aug. 20, following roughly 911 million shares unlocked earlier in August. More supply could emerge later this year, potentially keeping volatility elevated.

The biggest argument against aggressively buying the dip is valuation. SpaceX's price-to-sales (P/S) ratio is about 23 times, far above the aerospace sector median of 1.3x. 

Those multiples are extraordinary for an aerospace company. SpaceX, however, is increasingly becoming much more than a rocket manufacturer.

Investors are assigning substantial value to Starlink, artificial intelligence, satellite connectivity, and future computing infrastructure. That means today's sales multiple is effectively a bet that SpaceX's revenue will grow dramatically in the years ahead.

SpaceX's Latest Results Make the Dip Interesting

SpaceX's first quarterly report as a public company was impressive on the revenue side.

Second-quarter revenue jumped 92% year-over-year (YoY) to $7.81 billion, beating expectations. The company's net loss narrowed to $541 million, or $0.09 per share, while adjusted EBITDA surged 191% to $3.5 billion. 

Starlink remained the biggest growth engine. Connectivity revenue climbed 66%, while the subscriber base doubled to 12 million. SpaceX's AI segment was even more explosive, with revenue jumping 247% to $2.6 billion. Space revenue increased 29% to $962 million. 

The problem is that SpaceX is spending aggressively to capture those opportunities. Capital expenditures reached about $18.4 billion in Q2, largely tied to AI infrastructure and data centers.

Starlink and AI Could Change the Investment Case

The bullish argument for SPCX stock goes well beyond rockets.

SpaceX is expanding Starlink's global footprint while preparing next-generation satellites and mobile connectivity services. Reuters reported that the company expects a $100 billion revenue run rate by December and plans to launch at least 1,000 next-generation Starlink V3 satellites within a year. 

Meanwhile, AI could become an even larger business. Barchart cited SemiAnalysis estimates that SpaceX could reach a $305 billion annual revenue run rate by the end of 2027, including $235 billion from AI compute. Those are projections rather than company guidance, but they show why investors are willing to pay such a premium for the stock. 

The catch is that these expectations are already embedded in the valuation. Investors buying SPCX today are effectively betting on execution several years into the future.

Wall Street Remains Bullish on SPCX Stock

Importantly, analysts have not abandoned SpaceX after its latest decline.

According to Barchart, SPCX carries a “Moderate Buy” consensus rating from 35 analysts. The mean price target is $217.85, representing roughly 58% upside from Thursday's close.

Argus upgraded SpaceX to “Buy” with a $160 price target, while Piper Sandler has a more cautious $140 target. Other analyst trackers show a broader consensus near $213.50, still implying approximately 61% upside from Thursday's close. 

The Bottom Line

So, should investors buy the dip? SPCX is certainly more attractive around $137 than it was above $225, but the stock is not cheap by any conventional metric. 

For investors willing to accept extreme volatility, the combination of explosive Starlink growth and emerging AI revenue could make the pullback worth considering. For more conservative investors, the massive valuation and additional share unlocks argue for patience.