Can SpaceX stock take off again?

SpaceX's highly anticipated stock market debut generated significant buzz, raising around $86 billion and setting records. However, the initial euphoria was short-lived as the company's stock price experienced a sharp decline just days after its issuance, raising questions about the sustainability of the hype.

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Before the IPO, numerous large investors, such as venture or hedge funds, committed to holding their shares in the company for a few months. After that, such investors could also part with their shares.

Despite the immediate downturn, Christophe Pouchoy, a fund manager at LFDE's Echiquier Space Fonds, remains optimistic about SpaceX's long-term prospects. He notes that speculative capital had flowed into the entire space economy sector leading up to the IPO. While acknowledging the possibility of further short-term price drops as early investors, such as venture capital and hedge funds, potentially divest their holdings after lock-up periods, Pouchoy emphasizes the underlying strength of SpaceX's diverse business operations.

Pouchoy highlights the significant contributions of SpaceX's various divisions. Starlink, the satellite internet service, generated approximately $11.4 billion in revenue in 2025, forming the largest portion of the company's total earnings. The Launch Services segment added another $4.1 billion, while the xAI division, specializing in artificial intelligence, contributed $3.2 billion. The manager sees substantial potential in xAI, particularly with its development of the Grok chatbot and its expanding data center capacity, which is now being leased to major clients.

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Starlink, the segment with satellite connections, generated around $11.4 billion in 2025 and thus the main part of the total revenue.

Lucrative contracts underscore xAI's growing importance. The company has secured agreements with AI firm Anthropic, worth $1.25 billion monthly until at least May 2029, and with Alphabet, which will pay $920 million per month for three years. These two deals alone are projected to generate over $25 billion annually for the xAI business unit. Pouchoy also points to other companies within the space sector, such as Rocket Lab, which manufactures rockets and satellites, and various communication, IT, and defense firms that utilize space technologies, as indicators of a robust and expanding industry.

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With these two contracts alone, the business division now nets more than $25 billion annually.