The share price for SpaceX (Space Exploration Technologies Corp.) on the IPO day’s closing was $160.95. On June 16, a few days after the IPO, the price was $201.80. On Friday, July 24, just over a month later, shares closed at $115.07. That’s a drop of 28.5% from the initial price. It also meant a loss of $1 trillion from the peak market capitalization of about $3 trillion, leaving $2 trillion.

That’s how Bloomberg got to the mid-July headline, “SpaceX Slump Wipes Out $1 Trillion in Market Value From Peak.” It’s the type of whiplash that shows how crazy Wall Street hype can get. The expectations, or maybe the wishful thinking, were all based on the magic that was supposed to happen. Morgan Stanley analysts recently estimated that if the shares dropped to $100, a short stroll, it would imply that investors valued the entire AI division at $0 , as Bloomberg reported.

(A reminder here to always remember that one expectation from an IPO is for early and major investors to make a killing from selling some of their shares to retail investors, which may mean you, at soaring prices. Hype is almost always intentional.)

Going into the IPO, some like Brandon Lingle at the San Antonio Express-News said that SpaceX’s biggest moneymaker was Starlink, the satellite-based internet access system. A more accurate representation might have been that Starlink was not only the biggest moneymaker but the only profitable part of SpaceX.

Two aspects of company valuation estimations are at interplay here. One major factor in how investors calculate value is how well they think the company will do in the future. There are other parts to the valuation question: such aspects as assets, liquidity and cash flows, composition of management teams, competitive advantages, and intellectual property.

However, in various ways, all of them fit into understanding a company’s future. That is why the forward price/earnings ratio is a popular measure of corporate performance alongside trailing P/E. If you pay a given price for a share and future performance suggests the company will be worth much more at some reasonable point, you could consider it a good value.

Estimating the future performance and value is challenging because so much is guesswork. There are tools like discounted cash flow analysis to help determine the worth of an investment based on future cash flows. Unfortunately, trying to determine cash flow in the future might be an exercise in expert insight analysis, but more often it’s probably an attempt at augury.

You could argue that the exercise in pricing SpaceX shares was exactly this. The Starlink portion is profitable, though the business is criticized for various reasons according to the site Starlink Insider, including growing congestion in heavily used areas, poor customer service (the FCC has received more than 900 complaints over the last five years , says Fast Company), need for a clear view and cooperative conditions, and the growing resistance to launching ever more satellites. It does have 10.3 million customers across 164 countries, which represents a comparatively small niche player. For comparison, Verizon boasted 116 million wireless retail, 11 million broadband, and 2 million Fios video connections in 2025 for a total of 129 million. Revenue was $11.39 billion for 2025.

The space launch business has performed about 650 launches, with 85% using reused boosters, and an estimated 80% of 2025 global mass-to-orbit as of March 31, 2026, according to the SpaceX S-1 IPO filing. In 2025, the space-related segment had revenue of $4.09 billion.

The AI portion includes 350 million daily posts and 550 million monthly active users, and it had revenue of $3.20 billion last year.

With all this, total net income was a loss of $528 billion in 2025 but a $4.27 billion for the first quarter of 2026.

Let’s dig into a divisional look. Note: there was no information about split-out interest expenses, interest income, or other non-operational expenses by division, so there wasn’t a bottom-line net income/profit number by division.

In the first quarter of 2026, connectivity revenue was $3.26 billion, $2.07 billion in total costs and expenses, and $1.19 billion in quarterly income from operations. Space saw $619 million in revenue, $1.28 billion in total costs and expenses, and a quarterly $662 million loss. AI had $818 million in revenue, $3.29 billion in total costs and expenses, and a quarterly loss of $2.47 billion.

The Space division already claims 80% of mass-to-orbit transit. There is a limit of how much more it can get. Even if it could double the amount of work and revenue when it has a near- technical monopoly on the global business, so more than is available, and even if all that revenue became purely profitable, it would still lose money.

As for the AI division, the loss is triple the income. Competition is vastly larger and more capable than in space launches, and China continues to come out with new, cheaper AI resources. The business case for AI being competitively and financially viable is thin.

That brings us back to the Morgan Stanley estimate. “Most investors we speak with significantly discount Grok & Cursor,” Morgan Stanley analyst Adam Jonas wrote in a note to clients Friday, according to Bloomberg. “Many ascribe zero or even negative value for AI given the high capex requirements relative to Space & Connectivity, largely uncertain economics, and the high degree of management time devoted to the business.”

The bank thinks that “the current disconnect between increasingly bearish investor sentiment and largely unchanged fundamentals creates an attractive entry point in SpaceX shares.” In other words, come a $100 per share price, especially when the lock-ups of many share owners expire, allowing them to sell, purchasing some might make sense given the number of analysts project a multi-hundred-dollar price point for the stock.

Are they right? Hard to know. Look at how many “smart money” people thought Theranos had such brilliant investment potential. Or how many savvy investors thought that Wirecard was a real business, rather than a bowl of alleged fraud as the Financial Times found after an extended investigation.

Even now, many analysts are sure that SpaceX is worth so much more than it seems. Maybe they’re right; perhaps things will work out. But check your risk tolerance before buying in.