SpaceX's stock has tumbled from its euphoric debut, losing roughly 18% of its value in just over a week as the initial excitement from the largest initial public offering in history gives way to harder questions about fundamentals. The company priced shares at $135 on June 12, then surged 67% over its first three trading sessions before reversing course, closing around $185 by late last week. That volatility masks a deeper tension: SpaceX is trading at a valuation that only makes sense if its satellite internet service, next-generation rockets, and newly absorbed artificial intelligence operation all deliver extraordinary growth.

Why Did SpaceX Stock Rally Then Crash So Quickly?

The initial surge was partly mechanical. Only about 4% of SpaceX shares are currently free to trade, with the rest locked up under a staggered schedule that won't fully clear until well into next year. That thin float amplified the stock's 67% climb on modest trading volume. But two events reversed the momentum. On June 17, put options on SPCX began trading, giving skeptics a practical way to bet against the stock for the first time. The day before, SpaceX announced it would acquire Anysphere, the company behind the AI coding tool Cursor, for $60 billion in an all-stock deal. That immediate dilution signaled to investors that management believes the real growth story lies in artificial intelligence, not the current business.

The Cursor acquisition also sharpened a critical question: what is SpaceX actually worth? The company priced at a revenue multiple around 100 times, a number that only makes sense as a bet on three specific businesses. Understanding those three pillars helps explain both the bull case and the skepticism.

What Are the Three Pillars Holding Up SpaceX's Valuation?

• Starlink Satellite Internet: The broadband division generated $11.4 billion in revenue last year and $1.18 billion in profit during the first quarter of 2026, making it SpaceX's closest thing to a cash machine. The company claims Starlink's broadband service has a total addressable market of $870 billion, with mobile connectivity adding another $740 billion in opportunity. However, average revenue per user has been sliding, dropping to about $66 per month in the first quarter from $86 a year earlier, a red flag for growth-focused investors.
• Rocket Launch Business: SpaceX has completed more than 660 missions using reusable rockets that are cheaper to operate and have shorter turnaround times than competitors. Yet the segment lost $657 million in 2025 and another $662 million in the first quarter of 2026, meaning SpaceX is still burning cash on its core space business.
• Artificial Intelligence and Grok: SpaceX absorbed xAI earlier this year, bringing the Grok large language model, the social media platform X (formerly Twitter), and AI development capabilities under one roof. Management says AI represents a $26.5 trillion market opportunity, with $22.7 trillion coming from enterprise applications that automate workflows and make decisions. The company has vowed to rebuild the AI division "from the foundations up" under SpaceX's umbrella.

The problem is that two of these three pillars are either unprofitable or showing signs of slowing growth. Investors are betting that Starlink's satellite network creates an unbeatable competitive moat and that the AI business will eventually justify the $60 billion Cursor acquisition. But that's a story, not a balance sheet.

Could a Tesla-SpaceX Merger Change the Equation?

One analyst believes Elon Musk may be considering a more radical move. Dan Ives of Wedbush Securities, a longtime Tesla bull, estimates there is an 80% chance Tesla and SpaceX will merge within a year. SpaceX President Gwynne Shotwell has suggested the move "might make Elon's life a little easier". If the two companies combined, their total valuation would reach approximately $3.8 trillion, putting SpaceX squarely ahead of Amazon in the race for the world's most valuable company. Such a merger would create an integrated ecosystem spanning electric vehicles, space exploration, satellite internet, and artificial intelligence, potentially justifying a higher valuation than either company commands separately.

However, a merger would also raise regulatory questions and further concentrate Musk's control. Under SpaceX's current dual-class structure, Musk holds roughly 79% of voting power while owning about 42% of the equity, meaning public shareholders have little say over decisions driving the stock's volatility.

What Happens When the Lock-Up Period Ends?

The real test for SpaceX's valuation arrives in the coming months. The same lock-up structure that kept supply scarce and helped the stock surge from $135 to $225 will begin releasing shares gradually, with the schedule easing around the company's first earnings report in summer and fully clearing well into next year. A stock that climbed 67% on a 4% float will face a very different market once the other 96% of shares become available to sell. That supply shock could either validate the bull case or expose whether SpaceX is trading on fundamentals or on the story Musk sold at the IPO price.

For now, the slide from $225 to $185 represents the rally running in reverse. Whether SpaceX ultimately trades on Starlink's cash flows or on the artificial intelligence opportunity it sold investors at the IPO remains the defining question for the next few months.