SpaceX stock has rebounded in the past few weeks, moving from the year-to-date low of $104 to the current $142. This rebound, however, is losing momentum, and the stock faces some major risks that may affect its performance in the coming months.
SpaceX stock technicals points to a retreat
One of the top risks facing SPCX stock is its technicals. The four-hour chart shows that it has lost momentum in the past few days, with the Average Directional Index (ADX) dropping to 14.5 from the August high of 30.7. In most cases, a falling ADX is a sign that an asset is losing momentum.
At the same time, there are signs that the stock has formed a rising wedge pattern, which is made up of two ascending and converging trendlines. This pattern often leads to a bearish breakout.
The Percentage Price Oscillator (PPO) has formed a bearish divergence pattern, which happens when an oscillator is falling as an asset is in an uptrend. Therefore, there is a risk that the stock will have a bearish breakout, potentially to the year-to-date low of $104.
SPCX stock chart | Source: TradingView
SpaceX unlock is set to continue
Another big risk facing SpaceX stock is that millions of shares are expected to come online in the coming months. 319 million shares will unlock on September 9 followed by 59 million a day later. In total, over 2.62 billion shares will unlock this year, and many more will come next year.
A lockup expiration often weighs on a company’s stock because it increases the number of shares available for trading. It also tends to trigger insider selling, which can add further pressure on the price.
READ MORE: SpaceX stock gains as Bernstein maintains bullish outlook
Free cash flow to remain under pressure
SpaceX stock is also facing substantial risk as its free cash flow comes under pressure because of its spending. Its recent results showed that its space business had over $1.17 billion in capital expenditure, up slightly from the $1.05 billion it spent in the second quarter of last year.
The AI segment spent over $15.8 billion in capital expenditure, up from $7.7 billion in the same quarter last year. It spent $23 billion in the first six months of the year as it continued its data center rollout.
This spending will likely continue as the company seeks to compete with companies like CoreWeave, Nebius, and Meta Platforms. Also, the segment is seeing some substantial delays that are affecting its business, which has pushed it to replace some of its leaders.
On the positive side, this business is seeing strong demand from companies like Anthropic and Google.
Another risk is that Grok, its AI chatbot is losing market share to companies like OpenAI and Anthropic. A recent report showed that the two models have the biggest share in the United States. Grok and other models are also facing substantial competition from Chinese platforms like Kimi and DeepSeek.
Additionally, there are signs that the company is highly overvalued, with its market capitalization approaching $1.95 trillion.
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