A $40 Billion Reason Why SPCX Stock Is Down Today

SpaceX (SPCX) stock opened in the red this morning following reports that the space and artificial intelligence (AI) giant plans to issue about $40 billion in new debt. The company plans on using the fresh capital to acquire AI compute hardware, specifically Nvidia (NVDA) GPUs for its expanding data center footprint, the reports added. 

While SpaceX shares have staged an exciting comeback in recent months, they’re still down about 15% versus their year-to-date high. 

Why SpaceX Is Tapping the Debt Markets

SpaceX’s potential capital raise is expected to be led by Apollo Global Management and feature top lenders like Pimco. The proposed package reportedly calls for $10 billion in bank loans alongside $30 billion in investment-grade debt, targeted to close by 2027.

While the move signals aggressive expansion into AI infrastructure — aiming to surpass 2 gigawatts of compute capacity — investors are taking a cautious view.

Why? Because the prospect of adding $40 billion in leverage sparks near-term dilution and balance sheet concerns, creating immediate selling pressure despite the long-term growth opportunities.

Despite today’s selloff, SPCX stock’s relative strength index (RSI) sits in the mid-60s, indicating it continues to hover around overbought conditions. 

What Else Is Hurting SPCX Shares Today?

Adding to pressure on SpaceX stock is a bearish disclosure from high-profile investor Cathie Wood.

Recent regulatory filings confirm that her firm ARK Invest unloaded roughly $9.4 million worth of SPCX, signaling a fresh wave of institutional caution.

While Wood recently made a bold forecast of SpaceX hitting $10 trillion in annual revenue by the end of this decade, ARK’s recent adjustment likely reflects near-term valuation concerns. 

SPCX is currently trading at a price-to-sales (P/S) ratio of about 120x, which makes it an expensive name to own by any stretch of the imagination. 

Wall Street’s Consensus View on SpaceX Stock

Investors should note, however, that Wall Street analysts remain bullish as ever on billionaire Elon Musk’s space and AI infrastructure company. 

The consensus rating on SPCX shares sits at “Moderate Buy” currently, with the mean price objective of about $222 indicating potential upside of more than 30% from here. 

On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.