Elon Musk’s SpaceX has witnessed a sharp reversal in fortunes, losing more than $600 billion in market value over three trading sessions after a spectacular debut on the stock market. The company’s shares fell 16 per cent on Monday, extending losses over three days to 23 per cent.

Despite the steep decline, SpaceX remains one of the world’s most valuable companies, with a market capitalisation of just over $2 trillion. The stock closed at $154.60, its lowest level since listing, though it remains above its IPO price of $135.

Post-IPO Rally Gives Way to Correction

The selloff comes only days after SpaceX completed a record-breaking initial public offering that raised $75 billion and triggered a surge in investor enthusiasm.

The company rapidly climbed the ranks of the world’s most valuable firms as investors sought exposure to Musk’s businesses spanning space launches, satellite communications and artificial intelligence.

However, analysts say the rapid rally left the stock vulnerable to profit-taking.

“Sellers are back in control. Anyone in the world who wanted to buy this has bought it already,” Michael O’Rourke, chief market strategist at JonesTrading, told Bloomberg.

The comments reflect growing concerns among investors that SpaceX’s valuation may have outpaced its underlying fundamentals.

AI Expansion Raises Questions Among Investors

Market sentiment has also been affected by the company’s aggressive expansion into artificial intelligence.

Bloomberg reported last week that SpaceX plans to raise at least $20 billion through its first investment-grade bond issue to support its AI ambitions.

The company has also announced a multibillion-dollar agreement to provide computing resources to Reflection AI, an artificial intelligence startup.

While some investors view AI as a major growth opportunity, others are concerned that the company may be expanding too rapidly at a time when expectations are already elevated.

Retail Investors Played Major Role in Rally

According to data from Vanda Research cited by Bloomberg, retail investors purchased a net $405 million worth of SpaceX shares during the first five trading sessions following the IPO.

During that period, SpaceX attracted more retail investment than the combined inflows into the Magnificent Seven technology stocks.

Strong participation from individual investors helped drive the stock sharply higher after listing.

However, Bloomberg reported that while retail investors continued buying on Monday, the pace of purchases slowed considerably compared with the previous week.

Analysts note that stocks heavily influenced by retail enthusiasm can experience large swings when investor sentiment changes.

Analysts Highlight Valuation Concerns

The recent decline has coincided with the start of formal analyst coverage of the company.

KeyBanc Capital Markets initiated coverage with a hold-equivalent rating, stating that although SpaceX remains the dominant player in space-launch services, much of its anticipated growth may already be reflected in the share price.

Analyst Michael Leshock said the company still had substantial long-term growth opportunities but suggested that the balance between risk and reward had become more even.

Investors continue to view SpaceX’s acquisition of Musk’s xAI earlier this year as a major strategic development.

The transaction transformed the company from a pure space and satellite business into a broader technology and artificial intelligence play.

Supporters argue that the combination could support premium valuations over the long term, while critics believe the market may have become overly optimistic.

Even after shedding more than $600 billion in value, SpaceX remains worth over $2 trillion and ranks among the world’s most valuable companies.

However, after three consecutive days of losses, investors are increasingly questioning whether the company’s long-term ambitions can justify the lofty valuation it briefly commanded on Wall Street.

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