SpaceX shares rebounded about 2% on Tuesday after briefly slipping below $150, the price of its first trade when it debuted nearly two weeks ago. The decline had also pushed the company’s market valuation below the $2 trillion mark.
SpaceX shares were up 1.7% at $157 just after 10:40 a.m. ET (1440 GMT), after falling as low as $147.11, its first slip below its opening-day price of $150.
Apart from SpaceX, other tech heavyweights were mixed, with Alphabet off 0.4%, Apple up 0.8%, and Microsoft up more than 2%. Software stocks like Workday and Salesforce were also higher; those shares sold off heavily earlier this year on AI-linked fears.
SpaceX crashed 16% on Monday
The company, after a record $75 billion IPO on June 12, briefly surpassing Amazon and Microsoft in market capitalization. However, after the initial rally in the stock, investor sentiment has started to weaken.
In total, SpaceX has shed more than $600 billion in value after falling for three straight sessions. Monday’s 16% plunge in the stock erased about $400 billion, marking the second-largest one-day loss on record. Only Nvidia Corp.’s roughly $590 billion plunge that happened last year is bigger.
Is it a opprtunity to buy SpaceX?
“I’d be cautious about seeing this as a second-chance buying opportunity. The drop looks dramatic in scale, but these swings aren’t unusual for a stock with such a small public float,” said Nic Puckrin, cross-asset analyst and founder of Coin Bureau told Reuters.
The company’s shares are still more than 10% above their IPO price of $135. SpaceX also announced a bond offering earlier this week.
Nvidia plunges 2.6%
Tech has endured its first major selloff in weeks over the last several days, with the Nasdaq off by nearly 5% from its peak close from early June. The world’s most valuable company Nvidia saw its market cap slip below $5 trillion with a 2.6% decline. It and Tesla were among the biggest drags on the Nasdaq.
Chipmakers, which have been among the biggest winners of the AI trade this year, clocked heavy losses, with the Philadelphia SE Semiconductor Index down 6.3%. Micron, one of the biggest gainers in recent months, was down 9%. It will report earnings after the markets close on Wednesday.
“The trade has been highly concentrated and flow-driven, which makes it vulnerable to relatively small shifts in sentiment,” said Ross Mayfield, investment strategy analyst at Baird.
“It doesn’t appear to be closely tied to the fundamentals of the AI story, but rather to the heavy concentration and strong inflows into global tech over the past few months now starting to unwind.”
Memory chipmakers — the best-performing stocks on the S&P 500 so far this year — lagged on Tuesday, with SanDisk falling 12% and Western Digital losing 11%. Memory chipmakers in South Korea also recorded steep declines.
(With reports from Reuters and Bloomberg)
