Index inclusion effect fails, SpaceX shares fall more than 7% in two days with consecutive break issues, Wall Street valuation disagreements intensify.

Having completed the world's largest IPO and listed for less than a month, SpaceX's stock price encountered a dramatic reversal in the secondary market. Even being officially included in the Nasdaq 100 Index this week did not prevent the stock from continuing to fall and breaking below its issue price. There is a significant divergence between short-term market sentiment and Wall Street's grand narrative of its long-term value.

On Wednesday, SpaceX closed at $148.30, marking the second consecutive day below the $150 IPO issue price, with a two-day cumulative drop of nearly 7.6%. Compared to the June 16 closing high of $201.80, it has fallen a total of 26.5%. The inclusion in the Nasdaq 100, typically seen as a major positive event, failed to boost the stock and instead became a point for profit-takers to exit. According to reports, after underwriters exercised the “green shoe” over-allotment option, SpaceX's IPO last month ultimately confirmed net fundraising of $85.7 billion, firmly securing its place as the largest IPO in history.

Analysts pointed out that expectations for Nasdaq inclusion may have already been priced in, and the recent overall weakness in Nasdaq has added extra pressure. Meanwhile, the 12 IPO underwriters collectively released research reports on Tuesday, all giving buy or equivalent ratings. However, this rare show of bullish consensus also failed to effectively support the stock price.

Index Inclusion Effect Fails, Profit-Taking Dominates Short-Term Trend

SpaceX's inclusion in the Nasdaq 100 Index was a direct result of Nasdaq revising its rules for new stock inclusion and occurred less than a month after its June 12 listing. Typically, inclusion in a major index drives ETFs and mutual funds tracking that benchmark to passive purchase of the related stock.

However, market movement did not follow this logic. On Tuesday this week, SpaceX dropped nearly 7% in one day; on Wednesday, it briefly touched $145.20—the lowest since listing—falling nearly 2.9% during the day before erasing most losses and closing down about 0.8%. It has fallen for three consecutive days, with a three-day cumulative decline of over 8%.

Some analysts and market strategists believe that the positive impact of Nasdaq 100 inclusion has already been absorbed by the market, and together with the overall weak Nasdaq environment, expected inflows of passive funds failed to adequately support active investors taking profits.

Looking back at performance since listing, SpaceX's stock price surged in the early days, hitting a closing high of $201.80 four days after listing on June 16, then entered a period of volatile decline. This string of declines breaking below issue price marks the official end of the IPO “honeymoon period.”

Wall Street Bullish Consensus, Wide Divergence in Valuation Methodology

Despite the pressure on the stock, overall Wall Street ratings remain optimistic. According to media statistics, SpaceX has received 14 buy ratings, with an average target price of about $247 across all ratings, and an average buy rating target price around $260. This corresponds to a company valuation of about $3.4 trillion.

However, institutions’ valuation methodology and target prices vary greatly. Morgan Stanley analyst Adam Jonas gives an "overweight" rating and the highest target price of $300, using a 15-year discounted cash flow model predicting SpaceX's 2040 revenue will reach $3.3 trillion and EBITDA $2.7 trillion.

Deutsche Bank analyst Edison Yu gives a target price of $255, using a sum-of-parts method valuing AI, Starlink, and space launch businesses, totaling about $3.3 trillion.

RBC analyst Ken Herbert offers a $225 target price using 2029 EBITDA multiples, with Starlink business valued at $63 billion EBITDA at 15x, and AI business also using a 15x multiple.

BofA analyst Ron Epstein’s target price is $235, emphasizing SpaceX’s “Starship” as a core variable, believing success will bring launch costs down another 90% compared to Falcon 9.

Raymond James analyst Brian Gesuale gives an astonishing $800 target price, valuing SpaceX at over $10 trillion, calling it "one of the most defining industrial infrastructure companies of the 21st century," using a 27x EBITDA multiple for 2031 as support.

Cautious analysts are relatively few. Among them, MoffettNathanson gives a neutral rating; CFRA recommends selling.

Competitive Landscape Changes, Blue Origin Completes First External Financing

Just as SpaceX is undergoing its first post-listing correction, its main competitor, Blue Origin, is accelerating its ammunition buildup.

The New York Times revealed that Amazon founder Jeff Bezos’s private rocket company Blue Origin is completing its first round of external financing at a $130 billion valuation, raising $10 billion. Coatue Management contributed $4 billion, other large investment institutions $4 billion, and Bezos himself added $2 billion. For the past 25 years, Blue Origin has been almost entirely funded by Bezos personally.

This is the first time since Blue Origin’s founding that it has brought in outside capital. The financing comes in the wake of major technical setbacks at the company.

Earlier this year, Blue Origin’s New Glenn rocket exploded during a static fire test, destroying the company’s only launch pad. In a May media interview, Bezos said, "We finally have a clear enough view of future direction and financials. Now is a good time to introduce external investors."

In terms of business layout, besides rocket launches, Blue Origin will operate TeraWave, a satellite broadband service for large enterprise customers, launching satellites into medium and low Earth orbit using the New Glenn rocket.

Amazon will also launch its Amazon LEO satellite internet service for consumers, competing with SpaceX's Starlink, though the latter currently has a significant advantage in the number of satellites in orbit.

Valuation Digestion and Profitability Are Core Contradictions

The deep logic behind the current stock correction lies in the market's reassessment of SpaceX's high valuation system. Using the average target price of $260 as reference, corresponding to about $3.4 trillion valuation, this far exceeds the combined market value of Microsoft and ExxonMobil, whose combined expected 2027 revenue is close to $800 billion and EBITDA over $300 billion, about one-tenth of SpaceX's projections.

SpaceX's premium valuation depends on realizing rapid growth. BofA’s model predicts SpaceX's space business will grow at an average annual rate of 8% until 2031, Starlink business at 60%, and AI business at nearly 140% per year from 2025 to 2031. In this scenario, SpaceX's 2031 revenue will approach $800 billion, and EBITDA about $580 billion.

However, SpaceX has yet to achieve overall profitability. Balancing high capital expenditures and cash flow generation is currently the core contradiction investors are most concerned about.

Prospectus data show SpaceX will achieve revenue of about $18.674 billion in 2025, and Q1 2026 revenue of $4.694 billion. Before the grand vision translates into sustainable profitability, the digestion process of high stock prices may continue.

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