"Elon Musk Premium" back and forth: SpaceX IPO surged and then fell in the first month, Tesla "defensive counterattack"

According to the Zhitong Finance APP, the halo of the largest IPO in history has not yet faded, and SpaceX (SPCX.US) has seen its stock price fall from the clouds to the ground. This giant, controlled by Elon Musk and integrating aerospace, telecommunications, AI, and social media, has seen its stock price plummet over 35% from the closing high of $225.64 on June 16, just one month after its listing, with an intraday low of $145.20 reached on July 9. As of the close on July 9, SpaceX was at $149.29, remaining below the opening price of $150 on its first trading day for two consecutive days.

In a subtle contrast, Tesla (TSLA.US) stock price has actually risen slightly since SpaceX's listing—opening at $399.49 on June 12 and currently trading around $402. The market's repricing of Musk's "faith premium" is playing out in a brutal tug-of-war between these two stocks.

From $225 to $145: The "Honeymoon Ends" for the Largest IPO in History

SpaceX's IPO set multiple historical records. On June 11, the company issued 555.6 million shares at a price of $135 per share, raising $75 billion; if underwriters exercise their greenshoe option, the fundraising could reach up to $86 billion. On the first trading day, June 12, it opened at $150, and the stock price subsequently soared, reaching a new closing high of $225.64 on June 16, with a market capitalization nearing $3 trillion.

However, after the feast comes the cruel return to value. On July 7, on its first trading day after being included in the Nasdaq 100 index—taking only 15 trading days from listing to inclusion, setting the record for the fastest inclusion since the index's inception—SpaceX's stock price suffered a sharp decline, closing down 6.83% at $149.47, falling below the $150 opening price. Bloomberg Industry Research analysts estimated that inclusion in the Nasdaq 100 and Russell index series should have generated at least $5.4 billion in buying demand from tracking index funds. However, Mike Kearney, chief strategist at options analysis platform OpenInterest.PRO, pointed out that SpaceX's weight in the Nasdaq 100 is only 1.3%, significantly weakening the passive buying effect.

JJ Kinahan, senior vice president of the Chicago Board Options Exchange, warned before the inclusion: "We know volatility is high... Can you accept that the stock price may fluctuate by $20 in the next 11 days? The stock price can rise by $20, but it can also fall by $20."

The Gap Between Faith and Fundamentals: A Net Loss of $4.276 Billion in Q1, with a Price-to-Sales Ratio Exceeding 100 Times

Behind SpaceX's stock price crash is the market's general concern over the overvaluation of AI concept stocks. According to SpaceX's prospectus, the company's performance is still in a loss state. In the first quarter of 2026, SpaceX reported revenue of $4.694 billion, with a net loss of $4.276 billion, nearly approaching last year's total loss A FactSet survey shows that the median earnings per share forecast for SpaceX in 2026 by 23 analysts is -$0.42.

Among the company's three major business segments, only the connectivity segment, centered around Starlink satellite internet, is able to "generate cash," while the space and AI segments continue to "burn money." The Grok model has not gained a competitive advantage in the market. SpaceX expects revenue of approximately $36 billion in 2026, with no profitability achieved, resulting in a price-to-sales ratio as high as 41 times based on revenue for the next 12 months. More conservative estimates indicate that with a market value of $2 trillion and annual revenue of about $19 billion, the price-to-sales ratio exceeds 100 times.

Due to ongoing losses, SpaceX does not meet the profitability entry threshold for the S&P 500 index, meaning that this benchmark index will not include it for at least a year.

Wall Street's "faith vote": Average target price of $236, with a high of $800

Despite the stock price plummeting and concerns about fundamentals, major Wall Street investment banks have almost uniformly issued bullish ratings after the quiet period ended. Data compiled by Bloomberg shows that the average target price among analysts is as high as $236.45, representing about a 58% premium over the current closing price.

Morgan Stanley is the most aggressive, giving a "buy" rating with a target price of $300, and setting pessimistic and optimistic scenarios at $75 and $600, respectively. The firm expects SpaceX's revenue to reach $319 billion by 2030 and exceed $3.3 trillion by 2040, but predicts the company will not achieve positive free cash flow until 2035.

Raymond James gave a "strong buy" rating in its initial coverage report, with a target price as high as $800. Deutsche Bank issued a "buy" rating with a target price of $255; JPMorgan gave a "buy" rating with a target price of $225; Bernstein rated it "outperform" with a target price of $239; RBC rated it "outperform" with a target price of $225; Goldman Sachs gave a "buy" rating with a target price of $205.

Skeptical institutions also exist. MoffettNathanson gave a "neutral" rating for the first time, while CFRA recommended "selling" the stock.

Merger speculation: Tesla's "Musk premium" defense

The performance of SpaceX after its IPO has had a subtle yet profound impact on Tesla. Steve Sosnick, chief strategist at Interactive Brokers, referred to Tesla as a "faith-based" stock—Musk has generated immense wealth for many loyal followers. However, this faith is now facing dual challenges.

On one hand, if SpaceX performs well, it will attract attention and funds from overlapping investor groups of both companies; on the other hand, if SpaceX performs poorly, it could hinder the future merger's value. Ivan Feinseth, chief investment officer at Tigress Financial Partners, pointed out that the sensational IPO of SpaceX has shifted retail and momentum funds focused on Musk away from Tesla, but SpaceX's equally high valuation also supports Tesla's perceived "rescue bottom." Merger speculation is becoming the focus of the market. JP Morgan analyst Rajat Gupta stated that a merger between Tesla and SpaceX "makes sense on paper," and the shared AI ambitions of the two companies could serve as a "potential strategic adhesive." However, Gupta warned that potential obstacles include regulatory approvals across multiple jurisdictions, governance and voting rights symmetry issues, and the perception that the merger would be viewed as a SpaceX-led acquisition. JP Morgan expects that if the deal occurs, the most likely structure would be SpaceX acquiring Tesla entirely in stock.

Royal Bank of Canada analyst Tom Narayan believes that the likelihood of a merger is increasing, with the main reason for SpaceX's desire to merge with Tesla being "operational cooperation." He raised Tesla's target price from $475 to $500, implying a 22% increase. However, BNP Paribas analysts expressed skepticism, pointing out that the significant cash burn and major regulatory risks for both companies complicate the merger, maintaining a "underperform" rating on Tesla with a target price of $280.

Tesla will announce its second-quarter earnings on July 22. Although the company's second-quarter deliveries reached 480,126 vehicles, setting a record for the best second quarter, up 25% year-on-year, the stock price actually fell 7.49% on the day the delivery data was released. The strong sales failed to boost the stock price, reflecting that the capital market is reassessing Tesla's core narrative: as growth increasingly relies on price cuts and promotions, Tesla's story is shifting from "technological disruption" to the logic of "traditional automobiles."

Outlook: A Crossroad of Faith

The performance of SpaceX since its IPO a month ago reveals a profound shift in the capital market's pricing logic regarding the "Musk concept." During the IPO frenzy, investors were willing to pay exorbitant premiums for Musk's vision; however, as the noise subsides, fundamentals—sustained widening losses, uncertain profitability timelines, and sales multiples as high as 100—begin to dominate pricing again.

Mark Hackett, Chief Market Strategist at Nationwide, stated that concerns about overvaluation of AI concept stocks may persist until earnings reports are released. SpaceX needs to fully achieve the complete reusability of Starship in the coming years, significantly enhance Grok's competitiveness, and successfully develop cost-effective space solar data centers. Morgan Stanley analysts pointed out that SpaceX needs to raise an average of $84 billion annually between 2027 and 2034 to support infrastructure development.

Tesla also faces challenges. If Robotaxi and robotics technology fail to develop into meaningful businesses as expected, its $1.5 trillion market cap foundation will be called into question. Karobaar Capital analysts stated, "If Tesla can operate successfully, it may not even need SpaceX." The Test of Earnings Season: Can the Autonomous Driving Narrative Materialize on July 22?

On July 22, Tesla will release its complete second-quarter earnings report. This will be a critical moment to test the validity of the "Musk premium."

Investors are no longer focused on vehicle delivery numbers, but rather on: the expansion plan and timeline for Robotaxi, the growth of FSD subscriptions and safety data, the production progress of Cybercab and Semi, and the return prospects of AI capital expenditures.

The summary by Horizon Investments analyst Dmitry Shlyapnikov is quite representative: "The earnings report on July 22 will be a short-term test to see if management can translate the autonomous taxi and warehousing business from theory into actual performance." SpaceX's earnings report is further away—being a company still in significant losses, the market's patience is built on a long-term vision of "future revenue of $34 trillion." However, if Tesla's autonomous driving narrative fails to meet market expectations on July 22, the valuation logic of the entire "Musk empire" will face reevaluation.

Before the IPO, many on Wall Street were concerned that SpaceX's listing would pose a "survival threat" to Tesla—drawing away funds, competing for attention, and diluting the "Musk premium." But the market's response a month later shows that the merger expectations are transforming this potential "zero-sum game" into a kind of "symbiotic narrative": SpaceX's pullback has not dragged down Tesla; rather, speculation about the eventual unification of the two companies is providing new support for Tesla's stock price