SpaceX Plunges 24% After IPO…Is Now the Time to Buy, Hold, or Sell?

▲ SpaceX (SPCX), Nasdaq / AI-generated image ©

SpaceX's stock price, which had risen sharply since its July listing, has fallen 24% from its peak, approaching its IPO price. With Wall Street's target prices varying widely from $62 to $310, investors are sharply divided on whether now is an opportunity to buy the dip or the beginning of a further decline.

According to cryptocurrency media outlet Watcher.Guru on July 3 (local time), Space Exploration Technologies (SpaceX) saw its stock price rise to a high of $225 since its listing on June 12, but has since fallen 24% and is now trading around $150. This brings it closer to the IPO price of $135, indicating that early listing volatility is shaking investor sentiment.

The core argument for buying is growth potential. Starlink is already generating stable recurring revenue with room for further growth, and xAI, the artificial intelligence (AI) company owned by SpaceX, is also considered a long-term growth driver. Additionally, the company has secured unparalleled competitiveness in the medium-sized reusable rocket market. Dan Ives, Global Tech Research Director at Wedbush, gave SpaceX an 'Outperform' rating with a target price of $190, stating, "From a data perspective, SpaceX is more akin to an AI company."

On the other hand, there are quite a few hold opinions. The company has only been listed for a few weeks, so its corporate value has not been sufficiently verified, and the current stock is trading at a high valuation of over 100 times its sales. As no earnings announcements have been made yet, high volatility is likely to continue for some time. CEO Elon Musk also emphasized a long-term perspective rather than a short-term correction, remarking in relation to recent economic slowdown concerns that "even in a rapidly growing economy, temporary downturns always exist."

Sell opinions also exist. For investors whose holdings have become excessively large or whose expectations for the profitability of the space industry have weakened, realizing some profits could be a reasonable choice. Notably, SpaceX announced a $25 billion corporate bond issuance this week, following a record $85 billion initial public offering (IPO). Furthermore, the potential for additional selling volume due to the future expiration of insider lock-ups was cited as a variable investors are watching closely. The media stated that stocks with high volatility like SpaceX require a long-term investment perspective of at least 5 years and a high tolerance for risk.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*