SpaceX Stock Drops Below IPO Price; Morgan Stanley Bullish
SpaceX stock slipped below its IPO on lockup supply and retail net selling while Morgan Stanley tied upside to Cursor and AI, splitting near-term risk and long-term re-rating paths
KEY TAKEAWAYS
- Morgan Stanley framed upside on AI and Cursor with $300 base and $600 bull scenarios.
- Post-IPO selling included net $4.5 million retail selling and 911 million shares unlocking.
- The contrast implies continued volatility as lockup supply and retail flows compete with Morgan Stanley's software re-rating thesis.
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SpaceX stock slipped below its IPO price amid post-IPO volatility and retail net selling on Aug. 7, pressured by share unlocks and post-earnings concerns, even as Morgan Stanley outlined a bullish AI-software growth thesis on Aug. 11.
Post-IPO Selling and Lockup Supply
SpaceX (ticker SPCX) debuted on Nasdaq on June 12 at $135 per share. The stock closed below that level starting July 16 and at one point in August traded more than 22% below the debut price. Retail investors sold a net $4.5 million of shares on Aug. 7, marking the first net selling day since the IPO.
More than 911 million shares, roughly 7% of shares outstanding, became eligible for trading when the first post-lockup period expired. The post-IPO selloff reflected investor concern about steep operating losses and planned heavy spending on AI infrastructure after the company’s quarterly report, which coincided with a roughly 14% stock decline.
Morgan Stanley’s AI Upside Thesis
Morgan Stanley’s recent note framed SpaceX’s upside around AI and software optionality, particularly the Cursor acquisition, arguing the shares could more than double. The firm’s base-case target is $300 per share, with a bull case at $600, based on assumptions that Cursor could generate about $8 billion in annual recurring revenue (ARR) by year-end 2026 and roughly $33 billion by 2030. Cursor’s contribution to SpaceX revenue is projected at about $2.5 billion in 2026 and $13 billion in 2027.
This contrast between near-term market pressure from share unlocks and retail selling and the sell-side re-rating based on large software-driven revenue trajectories highlights sharply different valuation frameworks. Volatility is likely to continue as short-term supply and sentiment dynamics compete with the longer-term AI-software optionality thesis, which depends on Cursor’s execution and successful software monetization.
