How Low Can SpaceX Stock Go?

Space Exploration Technologies (NASDAQ: SPCX) went public on June 12. Its stock promptly soared to a peak of $225, giving the company a whopping $2.9 trillion market capitalization, but it has since plummeted by 35% to close at $145 on Friday, July 10.

SpaceX has a unique business that spans space transportation, satellite internet connectivity, and artificial intelligence (AI) infrastructure, and its revenue is forecast to grow rapidly over the next couple of years. However, its stock remains extremely expensive even after its recent decline, which could open the door to more losses for investors.

How low can SpaceX stock go?

Image source: The Motley Fool.

SpaceX has a significant opportunity ahead

Before we dive into SpaceX's hefty valuation and the math behind a potential decline in its stock, let's examine the company's business, which does have significant growth potential. It's divided into three core segments:

1. Space: SpaceX developed the world's first reusable rockets, which it uses to launch commercial payloads into orbit on behalf of businesses and governments.
2. Connectivity: SpaceX has launched over 9,600 of its own Starlink satellites into orbit, which provide internet access to more than 10 million paying customers here on Earth.
3. Artificial intelligence: SpaceX acquired Elon Musk's xAI start-up earlier this year. The joint companies operate large data centers that they use to train AI models like Grok, but they also rent spare computing capacity to other AI developers like Anthropic, Reflection AI, and Alphabet.

SpaceX already accounts for over 80% of the world's mass to orbit, so it's launching more commercial payloads than any other company or organization on the planet. Its market share will only grow once its Starship rocket enters regular service, because its 100-ton payload capacity is four times that of the Falcon 9 rocket, which completes most trips today.

The connectivity business is also set to receive a massive boost, as SpaceX will start launching its V3 satellites later this year, which offer a whopping 10 times the bandwidth of the current V2 satellites. Moreover, Starship will launch 60 V3 satellites into orbit per trip, whereas Falcon 9 is only capable of sending 27 at a time.

Moving on to the AI segment, most of its revenue comes from Grok subscriptions and renting data center capacity to other companies. When SpaceX bought xAI, it took ownership of data centers like Colossus and Colossus II, which are fitted with hundreds of thousands of specialized AI chips from suppliers like Nvidia and Advanced Micro Devices.

SpaceX eventually wants to send AI computing clusters into space, where they will run on solar power and won't need complex cooling systems. This infrastructure would send data back to Earth via Starlink satellites, giving SpaceX a huge advantage over any potential competitors entering this industry.

Although Elon Musk founded SpaceX to focus on space exploration and transportation, the company values its opportunity in this segment at just $370 billion. That pales in comparison to the potential $1.6 trillion addressable market in the connectivity business, and the staggering $26.5 trillion opportunity in the AI infrastructure business.

SpaceX stock is trading at a sky-high premium to the broader market

SpaceX generated $18.7 billion in total revenue during 2025, which was up 33% from the prior year. This was the composition:

Data source: SpaceX.

While connectivity was the largest and fastest-growing segment last year, that looks set to change. SpaceX recently agreed to rent up to $1.25 billion in AI computing capacity per month to Anthropic, in addition to another $920 million per month to Alphabet, and $150 million per month to Reflection AI. These deals could amount to tens of billions of dollars in annual revenue over the next few years.

In fact, Wall Street's average forecast (provided by Yahoo! Finance) suggests SpaceX could more than double its revenue to $38.8 billion in 2026 and then generate $72.4 billion in revenue in 2027. That brings me to its valuation.

Based on SpaceX's trailing 12-month revenue and its $1.91 trillion market capitalization, its stock is trading at a price-to-sales (P/S) ratio of 98.9, making it 15 times as expensive as the Nasdaq-100 index, which has a P/S ratio of just 6.4. In other words, SpaceX is wildly overvalued relative to its big-tech peers.

Even if we value SpaceX stock using Wall Street's 2027 revenue forecast, its forward P/S ratio is still a hefty 26.3. I'm not predicting this will happen, but the stock would have to plummet by 76% over the next 18 months just to trade in line with the current P/S ratio of the Nasdaq-100 index.

In my opinion, the math suggests SpaceX stock will have a tough time generating upside for the foreseeable future, and I won't be surprised to see a decline of 50% (or more), particularly if the company fails to meet Wall Street's revenue expectations.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, and Nvidia. The Motley Fool has a disclosure policy.