SpaceX falls 36% in a month as space stocks slide together

SpaceX shares fell 36% in a month, with Rocket Lab and AST SpaceMobile dropping similar amounts as investors rotated out of speculative space names after the company's blockbuster IPO.

"A Tesla-SpaceX combination carries an 80% to 90% probability in 2027 after SpaceX completes its IPO process," Dan Ives, an analyst, said. Oppenheimer called a deal plausible but not near-term.

Rocket Lab fell 36% and AST SpaceMobile 34% over the same window, while Planet Labs dropped 38% and Intuitive Machines 43%. Virgin Galactic held up better, down 13%. The Procure Space ETF declined 14% in a month to $43.79, and the Tema Space Innovators ETF fell 28.8% to $21.62.

None of the major space stocks trade at positive trailing 12-month earnings, leaving valuations reliant on growth narratives rather than current profitability. Investors face a sector reset with no margin of safety from swapping one speculative name for another.

The selloff traces to the IPO

SpaceX began trading on the Nasdaq under the ticker SPCX on June 13 after a $75 billion IPO, the largest of the year. The debut sent rival space company stocks lower as investors consolidated exposure into the category leader, and the pullback has since spread across the group.

The correlation is not accidental. These companies operate in a capital-intensive, pre-profitability phase where funding conditions drive price action more than near-term earnings. Planet Labs and Intuitive Machines both posted strong revenue growth in recent quarters, yet both stocks are down more than 35% in a month. The selloff has unfolded while the S&P 500 held near 7,483 and the Nasdaq 100 at 28,191, showing the move is sector-specific rather than a broad market decline.

All the major names share similar execution risks: launch reliability, customer concentration, regulatory hurdles, and the need to scale operations while burning cash. Planet Labs and Intuitive Machines carry additional exposure to government contracts, which can provide stability but also introduce budget and timing risks.

The Tesla-SpaceX wild card

Some investors see a potential Tesla-SpaceX merger as a value unlock for SpaceX shareholders. Prediction markets have assigned odds ranging from 33% to 74% for a deal before May 2027, depending on the survey. But a merger is not guaranteed, and even if it happens, the terms and timing remain uncertain, so investors should not count on it as a hedge against near-term volatility.

The Procure Space ETF, with a beta of 1.81, offers a basket of space-related names including SpaceX, Rocket Lab, and other satellite and launch providers. But the fund is concentrated and carries similar risks to the individual stocks, as its 14% one-month decline shows.

For investors, the takeaway is to keep position sizes modest in space stocks and watch for signs of consistent profitability or positive free cash flow, which would provide a firmer foundation for valuations. Until then, the sector remains highly speculative, and a cautious approach is justified even for those who believe in the long-term opportunity.

This article is for informational purposes only and does not constitute investment advice.