SpaceX investors face a critical decision point this week as the company prepares to report earnings and unlock over 900 million insider shares for sale, potentially creating significant downward pressure on the stock price. CNBC's Jim Cramer is urging caution, even though he remains bullish on Elon Musk's rocket and artificial intelligence company over the long term.

Why Is SpaceX Stock Falling So Sharply?

SpaceX shares have fallen more than 40% from their closing high on June 16, just days after the company's initial public offering. This dramatic decline has left many investors wondering whether now is the time to buy the dip. However, Cramer cautioned that multiple catalysts could push the stock even lower in the coming days.

The primary concern centers on a lockup expiration scheduled for August 6. A lockup expiration allows early investors and company insiders, who were previously restricted from selling their shares, to begin trading them freely. SpaceX's lockup is particularly large: roughly 911.5 million shares will become eligible for sale, more than doubling the company's public float. This massive influx of potential supply typically puts downward pressure on stock prices.

"If you're looking to buy SpaceX, I'm begging you if you want to go big to at least wait for the first wave of the lockup on insider selling to expire next Thursday and let it drag the share price lower before you pull the trigger," said Jim Cramer.

Jim Cramer, Host of Mad Money at CNBC

What Will SpaceX's Earnings Report Reveal About AI Revenue?

SpaceX's earnings report, scheduled for August 4, will be closely watched by Wall Street analysts and investors. Much of the near-term bullishness surrounding the company depends on its ability to monetize excess computing capacity through artificial intelligence contracts. SpaceX has signed multibillion-dollar rental agreements with Anthropic and Alphabet to use its data center infrastructure for AI workloads.

However, Cramer raised a critical red flag about these deals. Both contracts can be cancelled by either party with just 90 days' notice, making this new revenue stream difficult to model with confidence. Additionally, analysts are assuming SpaceX will sign additional AI agreements in the coming years, but Cramer noted that "there aren't many other companies with such deep pockets" to afford such arrangements. This uncertainty makes it hard to trust Wall Street's earnings projections for future years.

Beyond AI revenue, investors will also be watching for updates on the company's next-generation Starship rocket and continued subscriber growth at Starlink, which Cramer called one of SpaceX's strongest businesses.

Steps to Consider Before Investing in SpaceX Stock

• Wait for Lockup Expiration: Allow the August 6 lockup expiration to pass and observe how the stock price responds to the massive influx of insider selling before committing significant capital.
• Review Earnings Details: Examine the August 4 earnings report closely, paying particular attention to AI contract terms, renewal rates, and management's confidence in sustaining this revenue stream.
• Assess Long-Term Fundamentals: Consider SpaceX's core businesses separately, including Starship development progress and Starlink subscriber growth, rather than relying solely on AI revenue projections.

Cramer emphasized that even if SpaceX reports a strong quarter on August 4, the stock may struggle to hold gains through the lockup expiration on August 6. "Even if they report a great quarter on Tuesday, I don't know if it can withstand the lockup expiration on Thursday," he stated.

Cramer

What Regulatory Changes Could Help SpaceX Launch More Frequently?

While SpaceX faces near-term stock market headwinds, the company could benefit from significant regulatory tailwinds. The Trump administration announced on July 28 that it is moving to waive what it called "unnecessary environmental laws and regulations" to speed up the approval process for commercial space rocket launches and reentries.

The proposed Federal Aviation Administration (FAA) rule would allow the agency to waive requirements imposed on certain commercial space licenses and permits under 13 laws, including the National Environmental Policy Act, the Endangered Species Act, and parts of both the Clean Water and Clean Air acts. The FAA stated that "requirements that are needed to protect public health and safety, property, national security, or U.S. foreign policy interests would not be impacted" under the proposed rule.

This regulatory shift could be transformative for SpaceX's long-term growth prospects. The FAA authorized a record 205 commercial space operations in fiscal year 2025, and the agency's forecast projects up to 4,288 such operations over the next decade. FAA Administrator Bryan Bedford noted in May that SpaceX President Gwynne Shotwell told him the company aimed to reach 10,000 launches annually within five years, though Bedford cautioned that "we need to see a lot more reliability" for that to happen.

Gwynne Shotwell

Transportation Secretary Sean Duffy framed the regulatory changes as essential to American competitiveness. "America won the first Space Race, and we can do it again, but only if we get government red tape out of the way," he said in announcing the FAA's proposed rule. The proposed rule is subject to a 30-day public comment period before a final rule is issued.

For investors, the key takeaway is clear: SpaceX's stock may face volatility in the immediate term due to lockup expiration and earnings uncertainty, but the company's long-term operational prospects could improve significantly if the FAA's proposed environmental rule changes are finalized. Cramer's advice to wait reflects the reality that patience may be rewarded with a better entry point in the coming weeks.