The SpaceX IPO Could Trigger a Massive Rotation Across AI Stocks. Here's Why.

SpaceX’s massive market debut is sucking the oxygen out of the AI market.

Its fate over the next few months could impact the entire sector.

SpaceX (NASDAQ: SPCX) , the aerospace and AI company founded by Elon Musk, went public on June 12 with a valuation of $1.77 trillion, making it the biggest IPO in history. As of this writing, it's worth $2.59 trillion -- making it the world's fourth-most-valuable company.

At that market cap, SpaceX trades at 139 times its 2025 revenue. That valuation is arguably too high for an unprofitable company that grew its revenue by 33% in 2025. SpaceX's Starlink division is profitable, but its space and AI divisions aren't. Its planned investments in those two unprofitable segments will likely keep its bottom line in the red for the foreseeable future.

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I believe it's only a matter of time before that bubble pops and SpaceX's valuations drop to more sustainable levels. But until that happens, the buying frenzy in SpaceX's shares could pull investors away from the market's top-performing AI stocks.

Before SpaceX went public, many AI stocks had already generated multibagger gains. Over the past five years, Nvidia 's (NASDAQ: NVDA) stock skyrocketed about 1,060%, while Broadcom 's (NASDAQ: AVGO) stock surged more than 750%.

Both chipmakers profited from the surging demand for AI chips in data centers. Nvidia dominated the data center GPU market, while Broadcom sold more custom application-specific integrated circuits (ASICs) to hyperscalers. Analysts expect both companies to generate high double-digit revenue and earnings growth for the foreseeable future.