That happened fast. Space Exploration Technologies (NASDAQ: SPCX) has stumbled nearly 45% from highs set in the days after its massive initial public offering (IPO) earlier this year. The space economy giant helmed by Elon Musk has steadily faced selling pressure in recent weeks, and has actually now round-tripped its IPO price of $135.
As of this writing, midday July 17, SpaceX trades at $124.35, meaning anyone who bought into the IPO or after has lost money holding through to today. And yet, for anyone focused on fundamental performance, the stock still looks overvalued. Here's why I still wouldn't buy shares of SpaceX, even though the stock is trading near an all-time low.
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SpaceX has undeniable growth potential, especially with its artificial intelligence (AI) division and Starlink satellite internet capability. Starlink generated $11.4 billion in revenue in 2025, up 50% year over year. Plus, it has fantastic profit margins. With 10 million subscribers and a global addressable market, there is plenty of room for Starlink to keep growing in the years ahead.
The AI infrastructure business is at a much earlier stage but is likely to deliver fantastic growth over the next few quarters, compared with the $3.2 billion in revenue generated last year. Why? Because the company has invested billions in new data centers focused on AI and has now signed contracts with both Alphabet and Anthropic for access to compute that could be worth $26 billion annually.
There is a risk that both of these compute customers back out of these deals in the years ahead, but for now, SpaceX's 2025 revenue of $18.7 billion is set to explode higher.
Where SpaceX is going to find roadblocks is not next year's revenue growth, but the rest of this decade. It has some ambitious technologies it is trying to build, but they will require a lot of upfront capital and are uncertain to succeed.
Take Starship. This is the new rocket under development at SpaceX for years, designed to increase per-launch payload capacity (i.e., weight) compared to SpaceX's current workhorse, the Falcon 9. It is the tallest, heaviest, and most powerful rocket ever built, with a payload capacity of 100 to 150 tons to low Earth orbit. In the race to deploy even more Starlink satellites in the years ahead, Starship could be the key asset for SpaceX to maintain its lead.
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