SPCX Stock Rally Sends SpaceX Shares Back Toward $135

Shares in SpaceX have experienced a significant rebound and are trading back toward their initial $135 initial public offering price after a period of extreme volatility since the company went public.

The recent rebound brings further attention to the newly public company and its ability to build on momentum following an earlier boom that carried its shares far above their IPO price, before taking a steep dive.

SpaceX priced its IPO at $135 per share, reaching a valuation of almost $1.8 trillion and its offering as one of the biggest ever.

The early trading action for the stock was remarkable.

Its first trades went off above the IPO price and the stock's value quickly climbed as high as about $225 in early after-market trading following the launch. Those levels briefly pushed SpaceX past other large-cap technology stocks, while sparking interest from both institutional and retail investors alike.

The upward trajectory of the stock, however, didn't last.

SpaceX shares suffered a steep decline as many investors locked in their profits while simultaneously growing cautious regarding its valuation, the massive cost of capital requirements associated with growing its AI capabilities.

However, the latest trading surge implies that many investors are again betting on the company's long-term growth prospects.

Supporting this optimism are a few key business segments within the company that are each significant enough to contribute to the investment story individually. Starlink continues to grow, and the company has a strong presence in the commercial space launch business.

In addition, the company's increasing presence in the artificial intelligence sphere is also playing an increasingly important role in its investment story.

SpaceX is increasingly focusing its resources on AI infrastructure, including the build-out of enormous data centers and on expanding its computing power in the hopes that the market value will increase from such ventures, even though the cost of building and operating a massive AI infrastructure will be enormous.

Adding to the extreme volatility is the relatively unusual set of circumstances surrounding SpaceX's debut in the public market. Investors have not had a significant amount of financial data to rely upon from the public market to value the business, and all eyes remain on the company due to Elon Musk's central role.

The situation has also been closely watched by investors due to its share lockup agreements, because an eventual expiration date would unlock billions of dollars in shares and could put downward pressure on the price of the stock. Analysts have previously highlighted potential expiration dates as sources of volatility.

Despite the risks to the investment, the company's enormous addresses able markets may be the primary attraction for many investors.

SpaceX has vast markets in satellite internet, commercial launches, space based communications, and even AI infrastructure which could provide revenue growth sources for many years. The company's vertically integrated business also allows it more control over technology and costs than rivals.

However, even returning to $135 per share still means that the stock is somewhat over-valued. Investors would need tremendous growth to be maintained across all of the company's segments to keep the current valuation afloat, and any faltering in Starlink's growth or in the launch business could immediately bring the stock back down with significant speed.

The recent surge is both an indicator of renewed investor confidence in SpaceX and a test of that conviction. The company has come back all the way to its IPO price after suffering a remarkable sell-off, and whether it can continue its upward trajectory from here remains to be seen.