Australian retail investors are showing strong demand for Elon Musk’s rocket and artificial intelligence company, SpaceX, even as institutional shareholders have pushed the stock below its initial public offering price. SpaceX is a company focused on advanced rocketry and space exploration, including colonizing Mars and building data centers in space. It also runs xAI, the developer of the Grok AI platform. The company’s share price initially jumped 50 percent to around US$202, before falling below US$111, down 18 percent from its IPO price last week.
This market dichotomy is evident in trading patterns. CommSec, a Commonwealth Bank subsidiary, reported 28,000 customers bidding for SpaceX shares, raising an estimated A$1 billion after a significant increase in international trading accounts. Similarly, data from CMC Invest shows strong retail confidence, with 90 percent of all SpaceX orders being purchased. In contrast, hedge funds have taken advantage of the decline. For example, Minotaur’s Thomas Rice reportedly made a 30 percent paper profit by shorting the stock at US$170.03, even adding to his position last week.
SpaceX is widely considered one of the most undervalued stocks on the market, with expert opinion ranging from Morningstar’s fair value estimate of US$63 to another analyst’s estimate of US$800. Supporters cite Elon Musk’s history of achieving ambitious goals, while skeptics point to his implied valuation despite ongoing losses, comparing it to the dot-com bubble. The upcoming expiration of the shares’ lock-up period on August 6, after its first earnings report, is expected to be a key test. Analysts at Morgan Stanley believe the event could push the stock closer to US$100. Nevertheless, about 80 percent of Wall Street analysts recommend buying, with an average price target of US$232, although some fund managers remain cautious due to the unpredictability of the future.
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