SpaceX Stock Returns to IPO Price: Is This the Right Time to Buy?

SpaceX's stock has returned to its IPO price of $135, entering a reassessment phase for investors after briefly peaking at $225 and experiencing a 40% decline. This volatility occurs as the company’s market valuation dropped to $1.3 trillion from a peak of $1.77 trillion.

The Real Value Behind the IPO Price

Investors are habituated to treating the IPO price as though it represents some natural level of support. (SPCX) was sold at $135, so when it returns to $135, it feels as though fair value has been restored. That is not how IPO pricing works.

The offering price was the number (SPCX) that its bankers and investors agreed upon during a competitive sales process. It valued the company at approximately $1.77 trillion and allowed (SPCX) to raise a record amount of capital. It was the price required to complete the deal, nothing more.

Aswath Damodaran, the NYU professor often called the dean of valuation, reached a different conclusion. After valuing (SPCX)'s launch, connectivity, and artificial intelligence businesses separately, he estimated the equity was worth around $1.3 trillion. That would place the shares closer to $100.

I would not treat any (SPCX) valuation as exact. Too much depends on businesses still being developed, markets that may not yet exist, and margins that could change dramatically. But Damodaran's work gives investors something the excitement around the IPO did not: a sensible starting point.

How AI Assumptions Are Reshaping Valuation

His biggest concern was artificial intelligence. The launch business has a long operating history. Starlink has real customers, revenue, and improving economics. xAI is different. Investors are being asked to value a business that is further from profitability, requires giant spending, and competes against some of the best-capitalized technology companies in the world.

■xAI faces intense competition from well-capitalized tech giants.

■Starlink demonstrates stable revenue growth and customer expansion.

■Launch services provide a proven revenue stream.

Dr. Yaman Ege: "This correction highlights a critical juncture in the technology supply chain. Companies like TSMC and ASML are under pressure to meet AI-driven demand. If SpaceX's AI ventures fail to deliver, it could directly impact valuations of firms like Nvidia. The market is now testing risk appetite at these levels. The convergence of semiconductor shortages and geopolitical tensions adds another layer of uncertainty. Investors must weigh tangible assets against speculative AI potential."