SpaceX stock dips below IPO price amid AI investment concerns

SpaceX's stock has fallen below its initial public offering (IPO) price on Wall Street, marking the first time since its June 8 debut. The stock reached a low of $132.56 on Wednesday, down from its IPO price of $135. Investors are reportedly growing more cautious about stocks and trends associated with artificial intelligence. Concerns surrounding SpaceX appear linked to its substantial capital expenditures in AI, which amounted to $7.7 billion in the first quarter, representing about 75% of the company's total investment budget. SpaceX acquired Elon Musk's AI startup xAI in February through an all-stock deal. Forbes estimates Musk's net worth at $856.8 billion as of Wednesday. He became the first centibillionaire after SpaceX's IPO, holding a 38% stake, though his wealth has decreased from a peak of $1.45 trillion shortly after the offering. Analysts, however, largely maintain a positive outlook. According to Axios, citing FactSet data, the average analyst price target for SpaceX stock is $247, with 80% of 21 analysts holding a "buy" or "overweight" recommendation. Optimistic investors point to the long-term, significant investments required to realize Musk's vision. SpaceX, which previously focused on aerospace, has redirected considerable resources toward AI development. The company estimates its total addressable market at $28.5 trillion, with $26.5 trillion related to AI applications. Musk envisions SpaceX pioneering space-based data centers to address energy constraints from AI infrastructure growth, with initial facilities potentially operational by 2028. The company has also secured multi-billion dollar AI-related deals with Google, Anthropic, and Nvidia.