SpaceX Stock Plunges After Nasdaq 100 Entry as Analysts Maintain Bullish Forecasts

Key Insights

• SpaceX stock dropped after the company entered the blue-chip Nasdaq 100 Index.
• Most analysts tracking the company have a bullish outlook.
• It is slowly forming a double-bottom pattern, pointing to a rebound.

SpaceX stock continued its recent downtrend and neared its record low, even as the company entered the blue-chip Nasdaq 100 Index. SPCX dropped to $150.85, its lowest level since June 26. It has dropped by 33% from its highest point since its IPO.

SpaceX Stock Drops as It Enters the Nasdaq 100 Index

SpaceX has made some major developments since going public in the biggest initial public offering (IPO) on record. One of the most important developments is that the company has now moved into the blue-chip Nasdaq 100 Index, which tracks the biggest technology companies.

This entry is important because it will become one of the largest companies in the index. As a result, all ETFs tracking the index will be forced to buy it. Analysts predict that the purchases can top over $5 billion.

SpaceX is also expected to enter other indices, especially those run by companies like FTSE Russell and MSCI. That development will also lead to more institutional purchases.

Still, SpaceX stock dropped after the new entry because this was not breaking news and was highly anticipated by investors. This situation is known as buying the rumors and selling the news. It happens when investors buy an asset before a major development and then sell it when it happens.

In addition to the Nasdaq Index elevation, the company has made other major announcements. It acquired Cursor AI in a $60 billion deal and quickly raised over $20 billion by selling debt.

SpaceX has also announced more clients for its data center solutions. It secured Google and Reflection AI as customers. Google will now pay it $925 million, while Reflection will pay it $150 million a month for its space.

Analysts are Bullish on the SPCX Stock

Most analysts tracking SpaceX have maintained a bullish outlook for the company. For example, Canaccord Genuity has a buy rating for the company with a target of $246.

Mizuho analysts see it rising to $200, while Goldman Sachs expects it to jump to $205. Wells Fargo, on the other hand, expects the stock to jump to $230, while Morgan Stanley predicts it will jump to $300. As a result, the consensus target for SpaceX shares among analysts is $215, representing a 43% upside from the current level.

Indeed, only one company, MoffettNathanson, has a sell rating on the stock and a target of $131. In a note, the analysts noted that there was no financial model that supported a $2 trillion valuation. Also, they blasted the company’s claim of a $30 trillion total addressable market (TAM) as being absurd.

Morningstar has also been skeptical about SpaceX and its valuation. The company believes that the valuation should be lower than $1 trillion based on its financial statements. SpaceX made $18 billion in annual revenue last year and a net loss of over $5 billion.

Still, judging by history, the company may retain its hefty valuation as Tesla has done. Tesla has maintained a triple-digit PE ratio for years, even though everyone knows that it is grossly overvalued.

SpaceX Stock Price Technical Analysis

The 30-minute chart shows that the SPCX stock has plunged from $225 following its IPO hype to the current $151. Its attempt to recover found substantial resistance at $172.

As a result, the stock has dropped below the 50-period moving average and the 23.6% Fibonacci Retracement level. On the positive side, the stock is slowly forming a double-bottom pattern at $147.23 and a neckline at $172.55. This pattern often leads to a strong rebound over time.

Therefore, there is a likelihood that the stock will drop to $147.23 and then bounce back in the near term.

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