SpaceX shares gained 1% to close at $156.11 on Tuesday, recovering from a volatile session that saw prices fluctuate dramatically. The stock initially slipped by 4.8% before jumping 7.1%, only to pare much of those gains by the market close. This volatility occurred amid a broader selloff in technology stocks, driven by concerns over Korean chipmakers and the AI sector.
The rebound helped mitigate some of Monday's significant 16% drop, which wiped out $400 billion in market value, marking the second-largest one-day loss on record. SpaceX's market capitalization stood at approximately $2 trillion at the close of Tuesday's trading. The stock's movements are consistent with typical IPO patterns, where initial hype often leads to volatility.
SpaceX, officially known as Space Exploration Technologies Corp., recently completed a record $86 billion IPO in mid-June and raised $25 billion in bonds in its debut offer on Tuesday. The bond deal saw the highest demand for its least risky tranche, according to Bloomberg News.
“The stock moves are following a typical IPO pattern where 'everybody was enjoying the hype and the mania.'”
Louis Navellier, Navellier & Associates
Additionally, SpaceX secured a multibillion-dollar agreement to provide computing resources to Reflection AI, an AI startup. On the same day, Susquehanna Financial initiated coverage of the stock with a neutral rating and a $170 price target, indicating a potential upside of nearly 9% from Tuesday's close.
Currently, six firms tracked by Bloomberg recommend buying the stock, while two, including Susquehanna, have hold-equivalent ratings. One firm has issued a sell rating. The average price target is nearly $227, suggesting a return potential of about 45% from Tuesday's close.
Background
The recent developments in SpaceX's stock are part of a broader trend in the technology sector, where companies involved in AI are experiencing significant market fluctuations. This is partly due to investor concerns about the sustainability of the AI rally and its impact on related industries.
Looking ahead, investors will be closely monitoring SpaceX's upcoming earnings reports and the expiration of insider lockups, which could further influence stock prices. The company's strategic moves in AI and its financial performance will be key factors to watch.
