Investors expect SpaceX to slide to $100 per share, suggesting zero AI business value. Is it too late to get rich?

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SpaceX shares have plunged close to 50% from their all-time highs as of late July. They could slide further as investors price in no value to the rocket maker's burgeoning AI business.

SpaceX closed at about $125 per share on Aug. 4 (1) — a drop of roughly $100 per share from its one-time high of $225.64, which came only four days after its record-breaking IPO on June 12.

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The company is grappling with cooling investor enthusiasm on AI infrastructure and development, at least for the moment, given staggering levels of AI-related spending among tech giants and lingering doubts about its profitability. These doubts were not helped after the company's first earnings report since its IPO was released on Aug. 4, prompting its stock to drop around 9% in after-hours trading (2).

Company shares have more room to fall, according to Morgan Stanley. Another bundle of publicly tradable shares from insiders newly allowed to sell will hit financial markets on Aug. 6, which Morgan Stanley says could depress SpaceX stock prices even further to $100 per share, per Bloomberg (3).

At that point, investors will be appraising SpaceX's AI business as zero or negative, according to Morgan Stanley analyst Adam Jonas.

"Most investors we speak with significantly discount Grok & Cursor," Jonas wrote in a client note reported by Bloomberg. "Many ascribe zero or even negative value for AI given the high capex requirements relative to Space & Connectivity, largely uncertain economics, and the high degree of management time devoted to the business."

The steep and rapid descent in SpaceX's stock price prompted its founder Elon Musk to make a self-deprecating quip about briefly becoming the world's first trillionaire last month during the initial IPO bonanza.

"(Former) Trillionaire," Musk wrote in an X post (4).

On July 24, SpaceX successfully proceeded with the 13th test flight (5) of its 400-foot-tall Starship rocket from its Starbase site in Texas, the first since the company's IPO. Starship is still in the developmental stages, with two aborted takeoff attempts leading up to its successful test launch that overcame earlier problems with the rocket's engines.

Musk has placed the reusable rocket program at the crux of the company's ambition to usher in an era of frequent commercial space travel and the accelerated expansion of Starlink internet service. Before the release of its earnings report, its stock price already dropped sharply due to investors newly limiting their exposure to AI.

"SpaceX is suffering the same fate as so many major IPOs before it: a euphoric debut, unrealistic expectations, and a painful reality check," Charlie Bilello, the chief market strategist at wealth management firm Creative Planning, said in an X post (6).

That "painful reality check" looks to be here. Despite posting revenue that was better than expected for the second quarter, the company's earnings report still reported a loss of $541 million (7).

However, what arguably rattled investors more were the company's capital expenditures on its xAI unit, which is the division responsible for its Grok AI service. Those expenditures hit $15.8 billion, exceeding the $13.09 billion that was projected and accounting for a large part of SpaceX's overall spending in the quarter (8).

With investor interest cooling toward spending on AI infrastructure, the company's 9% surge in stock value ahead of the report was effectively wiped out overnight.

Big-name stocks can often generate the biggest buzz — but they also tend to attract the biggest disagreements on Wall Street. While some investors believe SpaceX could rebound from recent lows, others might argue the company remains significantly overvalued.

The growing number of bearish bets reflects that concern. As of early August, it's estimated that short sellers are holding 206 million shares, or about 32.2% of SpaceX's publicly tradable float (9).

"It's among the most aggressive and quickest bearish builds we have seen in a mega-cap name heading into its first earnings report post-IPO," Matthew Unterman, head of research at S3 Partners, wrote in an email reported by CNBC (10).

For this reason, instead of putting all your money behind one headline-grabbing stock, investors might want to consider looking for businesses with solid fundamentals that could still have significant room to grow.

Finding those opportunities isn't easy, though. Professional analysts spend their days combing through earnings reports, studying balance sheets, tracking industry trends and evaluating economic data.

Most everyday investors simply don't have the time to do that level of research.

Just because you can't do the research yourself, it doesn't mean you're stuck guessing. Platforms like Moby can help you identify stocks with strong growth potential, helping investors uncover opportunities they might otherwise overlook.

Their team of former hedge fund analysts and experts spend hundreds of hours each week sifting through financial news and data to provide you with investing reports delivered straight to you.

Moby's success speaks for itself. The platform's stock picks have outperformed the S&P 500 by about 11.9% over the past four years. Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.

Even better, Moby offers a 30-day money-back guarantee, so you can see if the service is right for you.

It's easy to get caught up in the excitement surrounding the market's hottest stocks. But building wealth usually has less to do with chasing headlines and more to do with sticking to a disciplined investment plan.

A more dependable strategy may be to own the market instead of trying to beat it. Low-cost ETFs tracking the S&P 500 can spread your money across hundreds of large American companies, reducing your exposure to any one disappointing stock.

Legendary investor Warren Buffett has long encouraged this approach, recommending that investors "consistently buy an S&P 500 low-cost index fund (11)."

"The trick is not to pick the right company," added Buffett. "The trick is to essentially buy all the big companies through the S&P 500 and to do it consistently and to do it in a very, very low cost way."

The results speak for themselves over the long term.

Historically, the S&P 500 has delivered average annual returns of roughly 10% since 1957, as reported by Fidelity (12). And thanks to the power of compounding, even modest contributions can snowball into substantial wealth over time.

For example, investing just $20 a week can compound to more than $179,000 over 30 years, assuming a 10% annual return (13).

If you're looking for an easy way to start investing today, you might want to consider trying a platform like Acorns, which lets you automatically invest spare change from everyday purchases into a diversified portfolio of ETFs.

That way, you can steadily build wealth without having to think about every market move.

Here's how it works: All you have to do is link your cards, and Acorns will round up each purchase to the nearest dollar, investing the difference — your spare change — into a smart investment portfolio managed by experts at leading investment firms like Vanguard and BlackRock.

Diversifying across different stocks is important, but building a resilient portfolio can mean looking beyond equities altogether.

With inflation still lingering, geopolitical tensions resurfacing and concerns regarding AI-fueled overvaluation growing, investing in assets that can help cushion market volatility is crucial.

Gold has historically served as a hedge against uncertainty. That's because it isn't tied to any single country, currency or economy, and it can't be printed at will, like fiat money.

Investors often flock to it during periods of economic stress or geopolitical uncertainty — pushing prices higher. In fact, gold prices have already more than doubled over the past five years, hitting multiple record highs along the way and outpacing the S&P 500 over the same period.

Today, you can combine the recession-resistant properties of the precious metal with the tax advantages of an IRA by opening a gold IRA with the help of Priority Gold.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainty.

To learn more, you can get a free information guide that includes details on how to get up to $10,000 in free silver on qualifying purchases.

Another way to reduce your dependence on the stock market is by adding real estate to your portfolio.

Real estate has historically been another reliable wealth-building asset because it offers both potential appreciation and the opportunity to earn rental income over time. Since property values don't always move in tandem with stocks, real estate can also offer diversification.

The downside? Buying an investment property requires significant capital, ongoing maintenance expenses and plenty of patience to deal with tenants.

These days, you can now tap into this market by investing in shares of vacation homes or rental properties through Arrived.

Backed by world-class investors, including Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord of your own rental property.

To get started, simply browse through their selection of vetted properties, each picked for their potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100.

The best part? For a limited time, when you open an account and add $1,000 or more, Arrived will credit your account with a 1% match.

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We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

CNBC (1), (9), (10), (11); BBC (2); Bloomberg (3); @elonmusk (4); SpaceX (5); @charliebilello (6); The Guardian (7); NBC (8); Fidelity (12); Acorns (13)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.