Better earnings have failed to support the premium
Analysts raised their SpaceX price targets last week while investors marked down the shares. A company can beat quarterly expectations and still struggle to justify the price investors previously paid for its future.
SpaceX (SPCX) fell about 5% Friday, extending a decline that has erased more than $400 billion from its market capitalization since October 6. Its valuation dropped from more than $2.3 trillion to below $2 trillion.
Even the earnings rally has disappeared. Shares jumped roughly 8% on October 21 after third-quarter results exceeded forecasts, only for more than $250 billion in market value to evaporate afterward.
The distinction between business performance and valuation is becoming harder to ignore. Better results can support higher earnings estimates while investors simultaneously demand a lower price for those earnings. SpaceX’s retreat suggests its growth premium is facing greater scrutiny, although the decline alone cannot establish which concern is driving sellers.
The lockup changed the supply of available stock
About 1.3 billion shares became eligible for sale on October 22, introducing a substantial source of potential selling pressure just after earnings.
A lockup expiration does not automatically mean insiders sold. Nor does it create new shares or dilute existing shareholders. It allows previously restricted holders to sell, leaving the market to absorb whatever supply actually arrives.
SpaceX initially held above $140 following the expiration before breaking below that level Friday. Meanwhile, Rocket Lab and AST SpaceMobile rebounded roughly 10% to 17% between October 22 and Thursday while SpaceX stalled.
That divergence suggests the broader space-stock slump cannot fully explain its recent weakness. It does not prove lockup-related selling caused the decline, but it makes company-specific supply an important part of the picture.
The $400 billion loss represents a reduction in shareholder market value, rather than money leaving SpaceX’s bank account. Operational progress and a falling share price can coexist.
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A successful launch would answer only part of the question
Starship Flight 15, expected next month, offers a concrete operational catalyst. The planned attempt to catch both the booster and upper stage could strengthen confidence in the company’s reusable-launch ambitions.
SpaceX’s reported exposure to AI, however, adds a separate valuation question. An AI-heavy revenue mix would not automatically establish how much profit or cash the business produces. Computing costs, infrastructure spending and financing requirements also belong in that assessment.
A launch milestone and an improvement in AI economics would support different parts of the investment case. Neither should be treated as a substitute for the other.
After such a large decline, the temptation is to measure the opportunity against October’s peak. A more useful test is whether future cash generation can support today’s valuation. The earnings beat supplied encouraging evidence. Investors are still asking for more.
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