SpaceX slid 6% to $159.81 midday Wednesday despite a bullish Dan Ives initiation, while Rocket Lab climbed 4% on its $8 billion Iridium deal and Virgin Galactic rose 3%.
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SpaceX falls 6% as space stocks diverge on sector rotation
SpaceX slid 6% to $159.81 by midday Wednesday even as Wedbush's Dan Ives initiated coverage at Outperform with a $190 price target, while smaller rivals rallied on their own catalysts.
"The selloff in SpaceX looks technical rather than fundamental — the stock is being rotated out of as traders take profits and move into other space names that have near-term catalysts," said Sarah Lin, equity analyst at Edgen. "The Polymarket contract for SPCX finishing lower today is trading at a 93 percent implied probability, which tells you where the momentum is."
Rocket Lab climbed 4 percent to $105.64 after CEO Peter Beck announced an $8 billion acquisition of Iridium Communications, a deal that targets direct-to-device satellite service using Iridium's low-Earth-orbit constellation. Virgin Galactic rose 3 percent to $2.99, extending a recent bounce. The broader Nasdaq-100, tracked by the Invesco QQQ Trust, fell 1 percent intraday.
The divergence comes as SpaceX prepares to join the Nasdaq-100 on July 7 under a fast-track rule that allows certain IPOs to qualify after 15 trading days. JPMorgan estimates the addition could trigger roughly $4.3 billion in mechanical index-fund buying. Ives' bull case frames SpaceX as a three-way bet on launch, connectivity and AI compute, with Starlink generating recurring revenue from about 12 million subscribers at an average revenue per user near $66, and the Colossus compute cluster carrying roughly $28 billion in annualized deals with customers including Anthropic and Alphabet's Google.
The rotation into smaller space names suggests near-term skepticism about SpaceX's valuation — the stock still trades at more than 100 times sales less than a month after its record $85.7 billion IPO. With insider lockups set to expire in the coming months and no quarterly earnings report yet released, the next catalyst for SpaceX will be its first earnings call, expected later this quarter.
This article is for informational purposes only and does not constitute investment advice.
[1] SpaceX Falls 6% Despite a Bullish Dan Ives Rating as Rocket Lab Climbs 5%, Virgin Galactic Rises 3%[2] SpaceX Stock Is Back Near Its IPO Price After a 24% Drop. Here's How to Decide Whether to Buy, Hold, or Sell[3] SpaceX Has Tumbled 27% From Its Recent Peak. Time to Buy the Dip?[4] SpaceX Falls 6% Despite a Bullish Dan Ives Rating as Rocket Lab Climbs 5%,...[5] SpaceX Joins the Nasdaq-100 on July 7. What It Means for Index Fund Investors
