For SPCX, around $170 could be a good entry point for a short position.
After rebounding from a previous low of $105 to around $170, a 70% gain is no small move.
This strong rally was fueled by positive news about its AI business, Starlink’s progress, and institutions raising their price targets. But sentiment can fade, and another Starship launch remains an unknown.
The rise is an opportunity to sell into strength.
A few reasons to be bearish:
1. The positive catalysts that drove the earlier rally have largely been priced in. For the stock to keep climbing, it will need even bigger upside surprises.
2. A large amount of stock could potentially be unlocked over the next two months. After such a big rally, I doubt all those holders will have no desire to cash out.
3. SpaceX is reportedly planning to raise another $40 billion, while other AI giants are also taking on debt on a massive scale. This is a sign that companies’ own cash flows can’t support their AI capital expenditures.
4. OpenAI’s previously disclosed annualized revenue was about $20 billion below the $70 billion figure circulating in the market. Although the gap is mainly due to differences in accounting methodology, it is still worth watching. As one of the companies at the forefront of AI commercialization, its actual revenue may not be as high as some investors imagine.
The biggest question is: With so much money being invested in AI each year, how much real profit will the industry ultimately generate?
If capital expenditures keep ballooning while commercial returns fail to keep pace, the market will sooner or later reassess these companies’ valuations.
So, for SPCX, the risk-reward balance is beginning to tilt in favor of the bears.
#SpaceX
After rebounding from a previous low of $105 to around $170, a 70% gain is no small move.
This strong rally was fueled by positive news about its AI business, Starlink’s progress, and institutions raising their price targets. But sentiment can fade, and another Starship launch remains an unknown.
The rise is an opportunity to sell into strength.
A few reasons to be bearish:
1. The positive catalysts that drove the earlier rally have largely been priced in. For the stock to keep climbing, it will need even bigger upside surprises.
2. A large amount of stock could potentially be unlocked over the next two months. After such a big rally, I doubt all those holders will have no desire to cash out.
3. SpaceX is reportedly planning to raise another $40 billion, while other AI giants are also taking on debt on a massive scale. This is a sign that companies’ own cash flows can’t support their AI capital expenditures.
4. OpenAI’s previously disclosed annualized revenue was about $20 billion below the $70 billion figure circulating in the market. Although the gap is mainly due to differences in accounting methodology, it is still worth watching. As one of the companies at the forefront of AI commercialization, its actual revenue may not be as high as some investors imagine.
The biggest question is: With so much money being invested in AI each year, how much real profit will the industry ultimately generate?
If capital expenditures keep ballooning while commercial returns fail to keep pace, the market will sooner or later reassess these companies’ valuations.
So, for SPCX, the risk-reward balance is beginning to tilt in favor of the bears.
#SpaceX