SpaceX shares plunged 26.2% in the days after its record-breaking initial public offering, reflecting a broader rout in technology stocks that has erased hundreds of billions from the sector. The stock, which listed on the Nasdaq under the ticker SPCX on June 12, 2026, at $135 a share, soared to an intraday high of $225.64 on June 16, pushing the company’s valuation above $2 trillion. By June 23, it had fallen more than 30% from that peak, wiping out roughly $400 billion in market capitalisation and closing below the level at which it finished its first day of trading.
The wider tech sell-off has been equally punishing. The Nasdaq 100, a US index dominated by technology stocks, fell 2.1% in the week to June 23, while the S&P 500 dropped 1.9%. Major names including Alphabet, Amazon, Meta Platforms and Microsoft have all lost ground, and chipmakers such as Nvidia, Intel and AMD have suffered particularly sharp declines. The tech-heavy Nasdaq Composite index closed down 2.21% on June 23 alone. The pain has spread beyond the US: South Korea’s KOSPI index plunged 10% the same day, with Samsung Electronics and SK Hynix each shedding more than 12%, and Japan’s Nikkei index closed nearly 4% lower.
SpaceX’s sharp descent
SpaceX’s slide has been especially dramatic given the scale of its debut. The June 12 initial public offering was the largest in history, raising approximately $75 billion. Shares opened at $150, surged 19% on the first day to close at $160.95, and continued climbing until they hit that $225.64 peak five days later. But the momentum reversed sharply after the company announced a massive debt issuance.
On June 22, SpaceX said it was seeking to raise $20 billion in debt, a figure that rose to $25 billion the following day. Shares tumbled 16.4% on June 22, recovering only slightly on June 23. The bond offering, described as one of the largest AI-linked debt sales of the year, attracted up to $89 billion in orders and drew investment-grade ratings from S&P, Moody’s and Fitch. Yet the sheer size of the issuance has raised questions about the company’s financial health.
“Issuing debt at such a heady valuation raises questions about cash flow for this hugely capital-intensive venture,” said Susannah Streeter, chief investment strategist at wealth manager Wealth Club. “SpaceX has come down to earth with a bump, burning off most of its post-launch steam.”
The concerns are rooted in SpaceX’s balance sheet. The company’s IPO prospectus reported a net loss of $4.3 billion in the first quarter of 2026 alone, following a net loss of nearly $5 billion in 2025. It posted negative free cash flow of $14 billion last year. The debt issuance comes just months after SpaceX acquired the artificial intelligence firm xAI in February 2026, integrating AI operations as a core business segment. That move has added further capital demands to an already expensive business — building rockets, launching satellites and developing Starship-class vehicles require enormous upfront spending.
Despite the brutal sell-off, SpaceX shares closed on June 23 at a level 15.6% above their $135 IPO price and 4.1% above the $150 opening price on listing day. Some early investors who bought at the IPO have paper gains, but those who piled in near the peak face heavy losses.
Broader tech turmoil
“Investors remain super-cautious, nervous that high valuations could be chipped away at again,” said Streeter. “Even a fresh easing of the energy crunch, with oil prices dipping further, isn’t lifting sentiment much.”
Several overlapping factors are driving the general mood. One is the fragility of the peace agreement between the US and Iran, announced on June 15. While the deal initially pushed oil prices lower and reduced geopolitical risk premiums, renewed fighting between Israel and the Hizbollah militia it supports in Lebanon has raised fears that Iran could re-close the Strait of Hormuz. “Talks continue in Switzerland with the US to turn a memorandum of understanding and a ceasefire extension into something more like a permanent solution,” said Tom Stevenson, investment director at Fidelity International. Markets remain on edge.
Another major concern is the direction of interest rates. Central banks in the European Union and Japan each raised their benchmark rates by a quarter of a percentage point in June, while the Bank of England held. The US Federal Reserve also paused but its accompanying statement was described as a “hawkish pause”, with futures markets now pricing in a higher probability of rate hikes before the end of 2026. That prospect dampens the appeal of high-growth tech stocks, which are more sensitive to changes in the cost of capital.
Underpinning much of the negativity is a growing doubt about whether the artificial intelligence boom can pay for itself. While AI adoption continues to accelerate, investors are questioning whether the hundreds of billions of dollars poured into data centres and infrastructure will generate sufficient returns. “With doubts about the returns that can be achieved on investments worth hundreds of billions of dollars, together with a rising challenge to equity investors from rising bond yields, more equity issuance and fewer share buybacks, the boom feels fragile,” said Stevenson, calling it a “reality-check moment” for the AI buildout.
Investment options
For those considering buying into the sector after the pullback, analysts point out that tech stocks remain highly valued and prone to further volatility. Several investment trusts and exchange-traded funds offer exposure to the area.
Allianz Technology Trust (LON:ATT) has top holdings including Nvidia, Alphabet, Micron Technology and Apple, which together account for 30% of its portfolio as of May 31. The trust traded at a 7.3% discount to net asset value as of June 23, according to data from the Association of Investment Companies. Polar Capital Technology (LON:PCT) holds a similarly concentrated portfolio, with more than 96% of its holdings having a market capitalisation above $10 billion as of May 29, and trades at a 9.2% discount to NAV.
For investors who want direct exposure to SpaceX, the WisdomTree Space Economy ETF (LON:WSPG) will add the company to its holdings from June 29 with an initial weighting of 5.5%. As of June 23, its top positions included Rocket Lab, the space launch provider, and Mitsubishi Heavy Industries.
