SpaceX Stock (SPCX) Price Faces Bearish Pressure Amid AI Spending Woes

Key Insights:

• SpaceX stock (SPCX) price risks downside after it was revealed that AI spending has been rapidly burning through cash.
• SpaceX quarterly earnings surpass expectations.
• A major investment firm lowers its SpaceX stock price target due to valuation concerns.

The SpaceX stock price has kicked off this week on a bullish leg, fueled by positive quarterly earnings. It is the stock’s biggest bounce back after its bearish performance in July, but some analysts are not convinced about the recovery due to the company’s AI spending.

The SpaceX stock price had quite a bearish month in July, during which it shaved off about 36% from its value. This performance had investors panicking, considering that it was the second month after the company went public.

The SPCX stock exchanged hands at $125.33 at press time after a 15% plus bounce back, Yahoo Finance data showed. It traded as low as $114 on Monday, indicating a strong demand resurgence.

AI Spending Concerns Weigh On SpaceX Stock Price

At first glance, the SPCX stock price recovery appears to be just starting. This is because the company’s bounce was linked to a positive quarterly earnings report for its first quarter as a publicly traded company.

SpaceX reportedly earned $7.8 billion in Q2 revenue, which was significantly higher than the $4.7 billion Q1 revenue. Moreover, its latest quarterly revenue figure also outperformed analysts’ consensus estimate of $6.81 billion.

While the better-than-anticipated quarterly performance boosted market confidence, investors remained on edge. This is because the quarterly earnings report also revealed that the company’s spending remained elevated.

AI spending amounted to $15.8 billion in Q2, making it one of SpaceX’s biggest expenditures, the earnings release showed. The company also revealed that it does not intend to slow down its investment in AI.

In other words, AI spending could continue to eat into the company’s profitability. These concerns could shift investor mood, therefore potentially suppressing the SpaceX price.

This was not the only concern that may add bearish pressure to the stock. Elon Musk’s idea of building data centers in space has been a key driver of investor excitement. However, the viability of space-based data centers has been called into question, especially due to cooling issues. AI concerns may also be affecting the stock in other ways.

Piper Sandler Revises Their SpaceX (SPCX) Stock Price Target

Aside from the capital expenditure concerns, some uncertainty has also been brewing around the AI cloud contracts. This suggests that investors may not be convinced about whether the company can guarantee returns from the AI pursuits within the horizon.

The impact of these concerns is already starting to be evident. For example, Piper Sandler, one of the top investment companies in the US, has reportedly conducted a downward revision of its SpaceX price target.

Piper Sandler had provided a $156 price target previously, with a neutral rating. However, the company has lowered its target to $140, while maintaining the neutral rating due to the same aforementioned factors, market commentator Walter Bloomberg reported on X.

The ratings downgrade suggests that corporate investors may also be adjusting to the recent woes around the stock. Piper Sandler says that the risks may suppress the SpaceX stock price up until summer of 2027. This is because the stock’s lockup will expire at around the same time.

However, this report is based on publicly released corporate information and is published for informational purposes only. Investment decisions should be made independently and, where appropriate, with the guidance of a qualified financial advisor.

But what exactly does this mean for the stock in the short term? The recent concerns suggest that investors remain on edge over its value.  This could continue to dilute demand in the short term.

However, the SpaceX stock (SPCX) was still at a significant discount at press time, which may still attract buyers. Data center deployment and AI remain key areas to watch.

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