SpaceX stock falls 9% to $144.75 as AI capex bill and Tesla merger talk weigh

SpaceX (SPCX) shares fell 9.1% on Thursday, October 22, closing at $144.75 and giving back most of the surge that followed its upbeat third quarter report, as investors weighed a rising capital spending bill and fresh uncertainty around a possible Tesla (TSLA) combination. The stock had jumped 7.8% on Wednesday, October 21, after SpaceX posted strong results and said more compute capacity is coming online.

The drop came as the broader tech trade sold off. The S&P 500 fell 1.2% and the Nasdaq Composite lost 2.6% on Thursday, dragged by Meta Platforms (META), down 7.0%, after the social media company reported its own heavy AI spending and a negative free cash flow quarter. Breadth underlined the split: declining stocks outnumbered advancers on the Nasdaq by a 1.37-to-1 ratio, and the Cboe Volatility Index rose about 14% to 19.03 on Thursday, per Cboe. For SpaceX, the financing math is the heart of the concern. Management guided Q4 capital expenditures to $35 billion to $40 billion, up from $19.6 billion in the third quarter, according to the earnings call, and the company ended the quarter with $36.1 billion in debt.

Related reading: Tesla Stock Jumps 3.8% on Merger Speculation: Q3 Earnings Loom Wednesday.

MoffettNathanson analyst Julie Zhu wrote in a client note that the earnings call amplified the enormous calls on capital that loom over the next few years. SpaceX Chief Financial Officer Bret Johnsen pushed back on the funding worry on the call, saying the company is investment grade, has a very strong balance sheet, and sees a number of available pools of debt capital.

Alongside capital spending, the Tesla merger question has returned to the foreground. Musk said this week that SpaceX and Tesla have each formed special committees of independent directors to study a tie-up, and that he is recused as a conflicted party. Asked whether it would be a good idea, he said yes on the call, according to Yahoo Finance. The public endorsement created a mess for the process, one person with direct knowledge of the talks told Reuters, with insiders worried that shareholder scrutiny could delay talks by several weeks. Bloomberg separately reported the companies are aiming to announce a deal in the first half of 2027, and Barclays analyst Dan Levy flagged Tesla's annual meeting, which must be held by December 6, as the likely venue for any shareholder vote.

Related reading: Tesla Stock Falls About 1.5% After Q3 Earnings: Net Income Drops 42.7%.

Wall Street has turned more bullish on the stock even as the shares fell. JPMorgan's Doug Anmuth more than doubled his price target to $500 from $240, citing AI infrastructure growth, and BofA raised its target to $275 from $235, per Yahoo Finance. The split tells the story: analysts like the long-run AI demand, but the market is now pricing in the cost of funding it and the complexity of a merger.

For a stock that trades in a 52 week range of $104.83 to $225.64 with a market capitalization near $1.94 trillion, the Thursday move is a reminder that SpaceX is now a mega cap whose valuation swings with both its own capex program and the wider AI trade. The near term watch list is straightforward: how the company funds the $35 billion to $40 billion fourth quarter buildout, whether the special committees reach any terms, and how the tech complex handles Meta's free cash flow signal. The next investor clue on the merger could come as early as the December 6 Tesla annual meeting.

Related reading: Meta Earnings Preview: A $130-145B Capex Guide Frames Q4.

Related reading: SpaceX Stock Price Slips to $147 as Q3 Earnings Due After Tuesday Close.

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