'The cult of Elon': SpaceX investors grapple with volatility amid big swings

This report is from this week's The Tech Download newsletter. Like what you see? You can subscribe here. Rollercoaster. That's probably the most accurate word to describe SpaceX's opening two weeks as a public company. The stock surged for several successive days following a record-breaking IPO, briefly overtaking both Amazon and Microsoft in terms of market cap and rising more than 60% on the initial share offering price of $135. But the good times weren't set to last. Daily drops of 5% and 4% were followed by a 16% slump as jitters crept into the market. Steadier days followed, with single point moves in either direction. The volatility underscores the whipsaw nature of a story-driven stock. Lofty sci-fi ambitions, huge coverage in the *ahem* media and a founder with a cult-like following whipped up a frenzy of excitement around the company. "Most stocks trade based on how their multiple of earnings compares to other comparable stocks," Gil Luria, head of technology research at D.A. Davidson, told me. "Elon Musk companies don't really do that." Musk's ventures instead trade on expectations, he added. "Tesla trades more on [autonomous driving service] Robotaxi and [humanoid robot] Optimus than they do on selling cars, and SpaceX trades more on the promise of Mars exploration, or at least data centers in space," said Luria. Retail investors bought into that forward-looking narrative in droves. SpaceX "embodies many of the qualities that have historically resonated with retail investors: a transformational technology story, a bold vision of the future, a celebrity founder and unparalleled media attention," Viraj Patel, global macro strategist at Vanda, said. In the first five trading sessions, retail investors bought a net $405 million of SpaceX shares, comfortably the strongest retail IPO debut in recent history, said research firm Vanda. "For SpaceX, the 'cult of Elon' pulls in more retail investors and adds extra hype that can add a lot to volatility as we saw with Tesla share prices," Mike Coop, chief investment officer, EMEA at Morningstar Wealth, told me. Morningstar analysts caused a stir in the run-up to SpaceX's IPO, writing that the stock was worth less than half of its $1.75 trillion target. After a bullish initial few days on the public markets, fundamentals became a bigger driver of the price causing a "hangover," said Kyle Rodda, senior market analyst at Capital.com. Musk has been, in a somewhat predictable fashion, touting sky-high revenue growth in years to come. He said on June 14 that the company "might be able to reach approximately" $1 trillion revenue in 2030. That would mark a huge jump from the $18.7 billion in revenue SpaceX made in 2025. The company posted a $4.9 billion net loss in 2025, and it lost $4.28 billion in the first quarter of this year. Long term SpaceX faces two big challenges on the markets, said Coop. "Firstly, the supply of shares will go up as early investors lighten up exposures and monetise gains," he said. "Secondly, the current price is too high given the massive uncertainty around the company's prospects and its starting point of being heavily loss making and requiring huge capital investment." Despite that, so far few have been willing to bet against the stock. Michael Burry of "The Big Short" fame said on June 16 that he has no position in SpaceX, and argued that options used to wager against the stock remain too expensive even as he questioned the company's nearly $3 trillion market value. And while SpaceX is seeing some interest from short sellers, many are still reluctant to bet against Musk. Time will tell how far narrative takes SpaceX stock. In any case, expect more twists and turns on the rollercoaster. Latest updates Anthropic is racing to increase its AI compute capacity in the Asia-Pacific region, as the company scrambles to keep up with soaring demand for its products. OpenAI and Broadcom on Wednesday unveiled their debut custom chip, called Jalapeño, marking the ChatGPT maker's first entry into artificial intelligence silicon. A second worker has died at the construction site of BYD's electric vehicle factory in Szeged, Hungary, CNBC has learned. Apple on Thursday announced price hikes on MacBooks and iPads, its first formal move to pass higher memory and storage costs on to consumers after CEO Tim Cook said increases had become unavoidable. ON Semiconductor has agreed to buy Synaptics in a nearly $7 billion all-stock deal to bolster its push into physical artificial intelligence technology. Stock of the week Memory chipmaker Micron had a good week as its third-quarter results topped analysts' estimates. The U.S. company has been one of the main beneficiaries of the AI boom, with its stock price up more than 800% over the past year, lifting the company's market cap past $1 trillion.