If SpaceX Stock Falls Below $100, One Analyst Shares This Warning

Introduction

As the landscape of space exploration evolves, so too do the fortunes of its leading companies, most notably SpaceX. Founded by Elon Musk in 2002, SpaceX has turned the aerospace sector on its head with innovative technologies and ambitious missions. However, recent fluctuations in its stock price have garnered attention from analysts and investors alike. With the stock trading below $110 for the first time since its public debut in June 2026, the question on many minds is: what happens if SpaceX's stock falls below the critical threshold of $100?

Current Stock Performance

Trading on the NASDAQ under the ticker SPCX, SpaceX's stock opened at $150 during its initial public offering (IPO) but has since experienced a decline, leading to questions about market sentiment and the company's underlying value. With earnings reports scheduled for August 4, the timing raises concerns about potential insider selling, which could exert further downward pressure on the stock.

Morgan Stanley analyst Adam Jonas has highlighted a disconnect between investor sentiment and SpaceX's fundamentals. In his analysis, Jonas points out that if the stock price were to dip below $100, it could signal a significant undervaluation of the company's future prospects, particularly in the realm of artificial intelligence (AI).

The AI Factor: Grok and Cursor

At the heart of Jonas's analysis lies SpaceX's strategic investments in AI technologies. Specifically, two acquisitions stand out: Grok and Cursor.

• Grok: Originally developed as part of Elon Musk's xAI initiative, Grok is an AI chatbot that SpaceX acquired in February 2026. Analysts suggest that many investors currently ascribe little to no value to Grok, largely due to misunderstandings about the capital expenditures necessary for AI compared to traditional space and connectivity projects.

• Cursor: In a bold move to further enhance its AI capabilities, SpaceX has also entered into a definitive agreement to acquire Cursor, a software platform specializing in AI coding. The all-stock transaction is valued at an impressive $60 billion and is expected to close in the third quarter of 2026. This acquisition is poised to bolster SpaceX's AI infrastructure and capabilities, allowing it to compete effectively in the rapidly evolving tech landscape.

Jonas's note to clients suggests that the market may be overlooking the potential of these acquisitions, leading to a valuation that does not fully reflect their future contributions to SpaceX's growth.

The Upside Potential

Despite the current volatility, the outlook for SpaceX remains optimistic among many analysts. According to Bloomberg data, approximately 80% of analysts covering the company recommend buying shares, with an average price target of $232. This indicates that many believe SpaceX is currently undervalued, particularly given the potential revenue streams from its AI initiatives.

SpaceX is not merely investing in AI for the sake of technology; it is also developing infrastructure assets that could generate significant revenue. Notable clients like Anthropic and Alphabet are already renting compute capacity from SpaceX. These agreements could yield a combined annual revenue of approximately $26 billion, a substantial figure that underscores the importance of AI in SpaceX's business model.

Looking further ahead, SpaceX has ambitious plans to launch data centers in space, an endeavor that could position it as a leader in AI infrastructure. However, these initiatives are not without their challenges.

Risks and Challenges Ahead

While the potential upside is enticing, it's essential to consider the significant risks involved. For instance, SpaceX's orbital data centers are not expected to launch until 2028. The company faces high capital expenditures to commercialize its AI infrastructure in space, which is currently its most capital-intensive segment.

In 2025, SpaceX allocated $12.7 billion toward its AI initiatives, compared to $3.8 billion for its space segment and $4.1 billion for connectivity. These numbers indicate the level of commitment and financial resources SpaceX is investing in AI, but they also highlight the potential for losses if these investments do not yield the expected returns.

As of the first quarter of 2026, the capital expenditures for the AI segment were already at $7.7 billion, raising questions about the sustainability of this spending in light of the stock's performance. Additionally, the upcoming earnings report could provide a clearer picture of the company's financial health and investor sentiment.

The Case for Caution

For potential investors, the question remains: Should one buy SpaceX stock at this juncture? While the allure of investing in a pioneering company like SpaceX is strong, it’s crucial to approach with caution.

• Volatility: SpaceX's stock has already demonstrated significant volatility. Those interested in investing should be prepared for potential dips and the reality that the stock is likely suited for more aggressive investors willing to accept a higher risk profile.

• Market Sentiment: The broader market sentiment around technology stocks, particularly in AI, can be unpredictable. Investors should consider how macroeconomic factors, such as interest rates and geopolitical developments, may impact the tech sector.

• Investment Alternatives: Analysts at The Motley Fool have suggested that there are currently better opportunities elsewhere in the market. The Stock Advisor team has identified ten stocks that they believe are primed for long-term growth, and SpaceX was notably absent from this list. This absence speaks volumes about the level of caution that seasoned investors may exercise regarding SpaceX at this time.

Conclusion

As SpaceX approaches a potential pivotal moment in its stock valuation, the implications of its performance cannot be understated. A decline below $100 per share might not only reflect investor sentiment but could also caution against undervaluing the company's future prospects in AI and infrastructure.

For those considering investing in SpaceX, the stakes are high. While the possible rewards are significant, the risks are equally daunting. In the end, it will take a blend of strategic insight and market awareness to navigate the complexities surrounding SpaceX as it embarks on its next phase of growth. The coming weeks will be critical, not only for SpaceX but for the broader investment landscape in technology and aerospace.