SpaceX Shares Slide Below Debut Price as Analysts Tout Orbital Data Center Opportunity

SpaceX shares closed at $148 on Wednesday, falling below the company's first trading price of $150 for a second consecutive day, even as a wave of analyst initiations pointed to long-term growth prospects anchored in orbital computing and artificial intelligence.

Elon Musk's aerospace and defense contractor was added to the Nasdaq-100 index on Tuesday, less than a month after its stock market debut on June 12. The rapid inclusion stems in part from the exchange's revised rules allowing newer public companies to join the widely tracked benchmark, a change that also required index funds and exchange-traded funds tied to the index to purchase SpaceX shares to match the updated lineup.

The company's record initial public offering raised a total of $85.7 billion after underwriters exercised the "greenshoe" overallotment option, which allows companies to issue additional shares when demand during the offering exceeds expectations. SpaceX initially offered 555.6 million shares at $135 each. The stock reached a closing high of $201.80 on June 16 before the recent pullback.

Analyst sentiment following the Nasdaq-100 inclusion tilted toward bullish. Morgan Stanley initiated coverage with an "overweight" rating and a price target of $300. Bernstein initiated at "outperform" with a target of $239, while RBC set an "outperform" rating and a $225 target. UBS initiated at "buy" with a 12-month price target of $210.

Proponents of the stock pointed to SpaceX's lead in reusable rocket technology, its Starlink satellite internet service, and the potential to expand margins across both business lines.

A more skeptical minority emerged as well. MoffettNathanson initiated coverage with a neutral rating, and CFRA recommended selling shares.

Among the growth avenues analysts highlighted, orbital data centers drew notable attention. Morgan Stanley identified four structural trends underpinning the opportunity: tighter constraints on land-based AI data centers, declining launch costs, advances in optical satellite networking, and a rising volume of data generated in space.

Orbital compute, as described by Morgan Stanley analyst Shawn Kim, functions as a virtual data center with server racks in space supported by solar arrays, cooling radiators, and laser-linked satellite networks. Kim noted that the more realistic near-term application is orbital edge-AI, where satellites process imagery, sensor data, and inference workloads before transmitting results back to Earth, rather than a wholesale replacement of terrestrial hyperscale facilities.

"Investing in space technology and exploration now represents an opportunity to participate at the forefront of frontier technology and defense innovation," said Jonathan Siegmann, research managing director at Stifel Financial. Siegmann added that commercial space profitability is no longer merely science fiction as national security, civil, and commercial programs gain momentum.

Morgan Stanley identified 43 companies with exposure to the orbital compute supply chain, spanning AI and memory semiconductors, optical links, satellite communications hardware, radiation-tolerant chips, and power systems. Roughly a third of those companies — 15 in total — are U.S.-based and include Nvidia, Broadcom, Micron Technology, and Advanced Micro Devices. Smaller names such as Redwire, AXT, and Mercury Systems also appear on the list, though analysts noted these carry greater risk given lower diversification.

International supply chain participants include TSMC and MediaTek in Taiwan, SK Hynix and Samsung Electronics in South Korea, STMicroelectronics and Infineon in Europe, and Murata, TDK, GS Yuasa, and Sharp in Japan.

Whether SpaceX shares recover their post-IPO highs will likely depend on how quickly the orbital compute thesis moves from analyst whiteboards to operational reality — and on whether investor appetite for the stock stabilizes after its volatile opening weeks of public trading.

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