Why SpaceX stock is slipping over 4% on Monday

SpaceX stock SPCX fell for a second consecutive trading session on Monday, moving closer to the company's $135 initial public offering price just days after joining the Nasdaq-100 index.

The stock declined more than 4% to trade around $139 as broader US equity markets also came under pressure.

The S&P 500 fell to session lows after President Donald Trump announced he was reinstating what he described as a blockade on Iranian shipping through the Strait of Hormuz.

The broad-market index lost 0.4%, while the Nasdaq Composite fell 1%. The Dow Jones Industrial Average traded 56 points, or 0.1%, lower.

Bernstein reiterates bullish outlook

Despite the stock's decline, Bernstein analyst Douglas Harned reiterated a Buy rating on SpaceX with a price target of $239, implying upside of more than 70% from current levels.

According to Harned, SpaceX's leadership in reusable rockets and launch services remains intact even after China successfully landed a Long March 10B rocket booster.

Harned said China's successful landing occurred about six months earlier than he had expected and noted that the country is rapidly expanding its space ambitions.

He said China plans to deploy more than 200,000 low-Earth orbit satellites and is also pursuing a research station on the Moon.

Harned also said the Long March 10 can only reuse its first-stage booster, while SpaceX's Starship is designed to be fully reusable.

If successful, he said, Starship could further reduce launch costs and enable the company to increase launch frequency.

Several Wall Street firms have outlined ambitious long-term scenarios for SpaceX, driven largely by expectations for Starlink, its reusable launch business, and potential opportunities in AI infrastructure.

Among the more bullish forecasts, Raymond James has one of the Street's highest published price targets at $800 per share.

Meanwhile, Citigroup has outlined a bull-case scenario that values SpaceX at roughly $12 trillion.

Stock gives back part of early gains

Monday's decline follows a strong start to SpaceX's life as a publicly traded company.

The stock surged more than 30% during its first several trading sessions before reversing course.

The pullback has brought the shares closer to their $135 IPO price after the company made its Nasdaq debut on June 12.

The stock had already fallen below its $150 debut trading price following its initial sessions in the public market.

The company's combination of high valuation expectations, ambitious long-term growth projections, and limited trading history has left the shares particularly sensitive to changes in investor sentiment.

Nasdaq-100 inclusion draws passive investment

SpaceX's recent addition to the Nasdaq-100 prompted a new wave of passive investment, as funds tracking the benchmark adjusted their portfolios to reflect the updated index composition.

The inclusion came after the exchange revised its rules governing newly listed companies, allowing the space and artificial intelligence company to join the benchmark within a month of going public.