Why is SpaceX rallying today?

SpaceX (SPCX) got a lift Monday after investors digested its first earnings report as a listed company and Wall Street stayed bullish on the numbers.

The SPCX briefly returned to the $135 IPO level, coming right after last week’s second-quarter results, where revenue came in above expectations, as Cryptopolitan reported live.

Analysts kept their upside calls after the report. Citi analyst John Godyn maintained a buy rating and a $200 price target, which leaves close to 50% upside from the listing level. Deutsche Bank Research analyst Edison Yu also stayed at buy and kept his target at $235.

Edison said SpaceX has a “fast path” to an annual revenue pace of $100 billion. His forecast includes expected growth from the company’s neocloud operation and Cursor business.

Wall Street is also factoring in SpaceX’s ability to launch more rockets and build a larger network of infrastructure in orbit. The bullish targets arrived after shares had recently fallen to $108.27, making Monday’s bounce part of a very volatile first two months on the market.

Retail traders start selling SpaceX as more shares enter public trading

Retail investors changed course on Friday after spending most of the post-IPO period buying SpaceX. Vanda Research data showed small traders sold a net $4.5 million of SpaceX shares on August 7. It was their first day as net sellers since the company began trading on June 12.

That selling was still small beside the buying seen earlier in the summer. Retail purchases reached a one-day record of $144.6 million on June 16, only four days after the listing.

The change came shortly after another heavy retail buying session. SpaceX dropped 13.6% on August 5 as investors reacted to the earnings report. Small traders piled into the decline, making that day their fourth-largest net buying session since the company became public.

AI spending was one of the biggest issues hanging over the stock after earnings. SpaceX told investors it was seeing quicker returns from money spent on artificial intelligence. The bigger question was how long Starlink’s profitable satellite internet operation could keep funding the company’s expensive AI projects.

SpaceX has already gone through a wild price cycle. During June, the stock traded as high as 67% above its IPO valuation. Those gains disappeared over the following weeks, and by August shares had fallen more than 22% below the debut level. The stock has also ended every session below its IPO price since July 16.

Retail traders have had an unusually large role in SpaceX’s public-market story. At least 30% of the stock offered during the IPO was reserved for individual investors. Over the past week, SpaceX was the second-most-discussed ticker.

There is also much more stock available for investors to buy and sell now. The amount of SpaceX equity available on public exchanges more than doubled last week after the first lockup period expired. More lockup expirations are still ahead, which means additional shares can become tradable over time.

Weak tech stocks and higher oil prices pressure the wider market Monday

The rest of Wall Street was having a tougher Monday. The S&P 500 (.SPX) was down about 0.1% as investors grew less confident that the U.S. and Iran would reach a lasting settlement to their conflict anytime soon. The Nasdaq Composite (.IXIC) fell 0.4%, while the Dow Jones Industrial Average (.DJI) lost 136 points, or 0.3%.

Several large technology names were under pressure. Intel (INTC) dropped 3% after the chipmaker said it plans to sell $15 billion worth of common stock. Nvidia (NVDA) fell 2%, and Apple (AAPL) was also down 2%.

Monday’s weakness came right after a strong week for U.S. stocks. The S&P 500, Nasdaq Composite, and Dow had each recorded their best weekly performance since April. The S&P 500 also finished Friday at a new record closing high.

The jobs data played a big role in Friday’s trading. U.S. nonfarm payrolls unexpectedly contracted in July, which reduced expectations for another Federal Reserve rate increase. Futures tied to the federal funds rate were pricing an almost 50% chance of a September hike, based on CME FedWatch figures. Traders had placed those odds at 67% one week earlier.

Oil was going the other way Monday. West Texas Intermediate crude jumped around 4% to roughly $81 a barrel as uncertainty around the U.S.-Iran conflict kept energy markets tense. U.S. crude holdings inside the Strategic Petroleum Reserve fell to their lowest point since January 1983. Brent crude, the main international benchmark, also gained about 4% and traded near $87 a barrel.