(SeaPRwire) – By: Reginald Vance
The market is finally waking up to the capital bottleneck. SpaceX stock has dropped 27% from its post-IPO high. It trades around $171 now. This is a sharp fall from the $225.64 peak hit on June 16. The company went public on June 12. The pullback reflects a fear of hardware scaling limits. Investors are staring at a $4.9 billion net loss in 2025. That is a massive cash burn. The AI division is driving this loss. Heavy infrastructure spending is required. But the revenue is not there yet. The company is valued at roughly $2.3 trillion. This is absurdly high. It sits at 115 times 2025 revenue. The math is terrifying. Wall Street is nervous. The physical reality of space is expensive. Only 12 analysts cover the stock currently. That number is expected to jump to 50. The incoming scrutiny will be intense. The stock moved up 1.8% in premarket trading. It hit $173.95. But the broader market was pointing lower. The sentiment is fragile.
Dan Ives at Wedbush is betting on the hardware. He launched coverage with a Buy rating. He set a $190 price target. He uses a sum-of-the-parts model. He sees the AI business worth $1.8 trillion. That is the majority of the value. Starlink is valued at $600 billion. It has over 10 million subscribers. It is profitable. The launch business is worth only $66 billion. The real risk is the Starship vehicle. It has only completed 12 test flights. The 13th flight is expected soon. This rocket is critical. It must cut costs by 90% compared to Falcon 9. That reduction is necessary for orbital AI computing. It is needed for the Artemis lunar lander. It is needed for next-gen Starlink satellites. The vehicle is the single largest source of value. It is also the largest risk. If the hardware fails, the AI projections collapse.
The financials show a dangerous path forward. Losses are expected to grow in 2026. Revenue grew 33% last year. Total 2025 revenue was $18.7 billion. This growth is not enough. The AI unit must generate $80 billion in sales by 2028. This target is aggressive. It must be achieved before orbital data centers are operational. The average price target is $240. Seven of the 12 analysts have Buy ratings. They are ignoring the cash flow pain. The AI unit needs massive capital injection. Ives is known for big calls on Tesla. He has a Street-high price target there too. But SpaceX is a different beast. The hardware must deliver first. If Starship fails, the $2.5 trillion valuation is in trouble. The bet is entirely on physical execution. The supply chain cannot tolerate a single delay. The endgame is a monopoly on orbital compute. But the path is paved with red ink.
Author bio: Reginald Vance, a venture partner specializing in semiconductor valuation and advanced materials.