SpaceX Stock: 3 Things Could Derail the Post-IPO Rally, Analyst Warns
NEWS | 18 June 2026
Less than a week after its historic debut, one analyst says the next move for SpaceX stock is likely down. Paul Meeks, a managing director and head of technology research at Freedom Capital Markets, said he was among the skeptics of SpaceX's recent IPO, which saw the stock soar amid major hype from retail investors. Shares of Elon Musk's rocket company, which were initially priced at $135, jumped as high as $218 this week, up 61%. But that level might mark the peak for a while, with warning signs that a larger decline may already be in motion, Meeks says. SpaceX shares tumbled as much as 3% on Wednesday. He estimated that the fair value for the stock is about a third of where shares were trading on Wednesday, implying a decline to $63 a share, he told Business Insider in an interview, a drop of nearly 70%. "I would think that we've seen the top," Meeks said, though he noted it was hard to tell due to the extreme speculative hype surrounding SpaceX. "We're investing in the Elon Musk cult." Wall Street has been wary of a potential decline in SpaceX, given the speculative fervor that's fueled its IPO and the general trend of IPOs fizzling out after the lock-up periods expire and insiders start dumping the stock. SpaceX has a staggered lockup expiration schedule over the coming months, but Meeks said he sees several signs the decline could come before then. He pointed to options-implied volatility for SpaceX, which clocked in at 97.5% on Wednesday. That means investors are bracing for the possibility for the stock to see a 97% move in either direction in the coming year. That level of volatility is extreme even by mega-cap IPO standards, Meeks said. The stock's options-implied volatility also outstrips that of the other Magnificent Seven stocks. SpaceX's fundamentals are also troubling, Meeks added. The firm recorded a net loss of $4.9 billion in 2025. Here are the near-term catalysts he said risk sparking a decline in SpaceX stock. 1. SpaceX issues more shares SpaceX sold less than 5% of shares for the public to trade, creating a scarcity effect that helps prop up the price. That effect will dissipate should SpaceX decide to issue more public stock, Meeks said. SpaceX hasn't announced any official plans to issue more stock, though its amended S-1 filing includes a note that says the company could issue more shares in the future for "a variety of corporate purposes." SpaceX's public float, a measure of how much of the company is available for public trading, is 4%. Nvidia, by comparison, has a public float of 96%. 2. AI hype dies down SpaceX is an AI play, and investors are pricing in big moves down the line related to the technology, including orbital data centers to capture more of the market for AI compute. "The basis of this AI company is xAI, which has not been very successful," Meeks said, pointing to SpaceX's $6.4 billion loss in its AI business last year. "I think it's going to be more about what people feel about the AI theme," he added for the stock's future performance. 3. SpaceX earnings fall short Investors are expecting SpaceX's first earnings report as a public company sometime in August, just before the first wave of its insider lock-ups will expire. At that point, investors will have no choice but to pay attention to how its valuation isn't squaring with fundamentals, Meeks said. "At some point, you can't just buy this thing based on this $28 trillion total market opportunity. They're going to have to peel back the onion," he said. "They've got to start delivering the mail, and I think that'll rattle some cages." Other forecasters have started ringing the alarm bells about SpaceX amid the stock's recent red-hot rally. Morningstar said the fair value for SpaceX is around $63 a share, with the stock reaching $70 in the "best-case scenario." Michael Burry, the famed investor from "The Big Short," said the stock is mostly moving higher on "hype" and that the company likely worth less than $1 trillion. Paul Krugman, a Nobel economist, called the company a "$2.75 trillion meme stock." "The only winners will be those who got in early, stoked a market frenzy, and exit before the bottom inevitably falls out," he wrote in a post on Substack.
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