Gali Russell knows that his big bet on SpaceX might sound crazy. In recent weeks, the stock has shed $1 trillion in value.
"But how exciting is the idea that I could go to Mars? That my grandkids could be living in space?" said Russell, adding that shares of Elon Musk's rocket, internet and AI company make up some 75% of his portfolio. "The vision is priceless."
A longtime devotee of Musk's ventures, Russell recently described SpaceX's extended selloff as an "insane opportunity" to buy, in a post on X. The chief executive himself piped up later that morning in Russell's replies: "I think so."
Many Wall Street pros are selling. SpaceX's 43% plunge from highs after its record debut included a 14% decline Wednesday following its first earnings report. On Thursday, the stock rose 6.1% despite the release of up to 912 million shares into the market at the end of a lockup period -- a potential flood of equities that investors believe could spark more volatility ahead.
The move has set up a three-way collision among SpaceX's stratospheric ambitions, the increasingly difficult math of returns on massive AI spending, and a small army of retail stock pickers prepared to follow Musk to another planet.
When SpaceX started trading in June, marking the largest initial public offering of all time, individual investors put in orders for some $100 billion worth of stock and poured in millions more during the first few minutes of trading.
Now comes the reality check.
Speculators roughly doubled their collective short positions between the end of June and the firm's first quarterly report, according to analytics firm S3 Partners. Those bets on SpaceX stock declining covered roughly one-third of all shares outstanding.
None of that is dissuading retail traders. SpaceX is the fourth-most popular investment on Robinhood, trailing only Nvidia, Tesla and Apple. Shares have yet to see a day of net selling by individual investors since their listing, according to Vanda Research. During SpaceX's post-earnings plunge Wednesday, the firm said retail traders snapped up almost $23 million worth of stock in the first hour after the opening bell.
The company has followed previous Musk ventures in sharing ambitions that border on the surreal, including spacebound data centers and Mars-based manufacturing. It also houses the social-media platform X, while some investors have speculated that a merger with Tesla is next.
Parsing the earnings from SpaceX's earth-based AI play, reusable rockets and internet business this week, MoffettNathanson analysts were left with a question of identity: "What, exactly, is SpaceX?"
Even seasoned investment analysts struggle to value the long-term potential of asteroid mining. In the shorter run, the company's growth prospects rest largely on its ability to compete in a globe-spanning data center build-out led by hyperscalers including Amazon and Microsoft. And the borrowing needed to finance that spending spree is growing more expensive.
"There's a big question about how they're going to fund it," said Julie Zhu, a MoffettNathanson analyst. "With those fundamentals as a backdrop, it's tough to get excited about the stock."
For now, at least, many of Wall Street's big banks are aligned with retail traders in their otherworldly optimism, in no small part because of Musk's prowess for engineering and marketing.
Describing the company as a "haloscaler," Deutsche Bank analysts told clients before earnings that SpaceX "represents in our view the apex of civilizational ambition." Goldman Sachs and JPMorgan this week boosted their share-price targets despite SpaceX's first-half capital expenditures quadrupling from a year earlier.
"If it's more capital to enable better SpaceX outcomes, that's an easy trade for us," said Colin Canfield, an analyst at Cantor Fitzgerald. Pointing to the company's lofty goals, he added, "SpaceX can outscale relative to AI hyperscalers because historically they can take a best-in-class engineer and make them work harder for less."
Now, traders big and small alike will face a technical challenge to Musk's cultlike status in markets.
The 912 million SpaceX shares that unlocked Thursday -- holdings worth more than $100 billion -- far exceed the previous supply of tradable stock. Yet SpaceX's gains contrasted with an otherwise down day on Wall Street. The Dow Jones Industrial Average fell 0.9%, or 464 points, while the S&P 500 ticked 0.2% lower. The Nasdaq composite slipped 0.1%.
Even so, the end of the lockup has left individual investors like Tamar June bracing for more volatility should company insiders decide to cash in.
After buying into SpaceX twice when it was private, June landed 600 additional shares on IPO day. "You have to put the noise aside," the software executive and longtime investor said.
Remember when Microsoft shares took 16 years to recover their dot-com-era highs? June held on. When Apple nearly went bankrupt? She saw that through, too. June hopes her SpaceX shares will eventually turn out to be like the Apple stock certificate hanging over her desk -- worth much more than she ever could have imagined two decades ago.
"If you get in early on tech," she said, "you're going to do really well down the road." As for Musk? "You can't bet against the guy."
SpaceX would have to accrue many trillions more in value to replicate the returns of other tech giants that went public far sooner. Like June, however, many of the do-it-yourself traders snapping up shares of SpaceX said they're focused on what the company can accomplish in 10, 20 or even 30 years from now.
"You don't have to file reports on your quarterly performance," said Tannor Manson, an investor and content creator who focuses on tech stocks.
He's holding off on buying SpaceX at these prices, he said, but understands why many others are looking through its recent declines and back toward Musk.
"If you can hitch your wagon to his horse," Manson said, "who cares how long it takes?"
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