SpaceX stock continued its strong downward trend, reaching its lowest level since August as the artificial intelligence (AI) trade started to crack and as investors dumped shares after the Democratic sweep in Congress. SPCX has now dropped by 30% from its highest point on October 6 and 45% from its post-IPO high.
SpaceX stock is falling after midterms
SPCX stock has been in a strong sell-off this year, mirroring the performance of other companies, including popular names like Nvidia, AMD, and Arm Holdings.
SpaceX shares declined after Democrats won control of Congress in the Nov. 3 midterm elections. Investors raised concerns about increased scrutiny of Elon Musk’s businesses and federal contracts. According to the Associated Press, Musk spent at least $445 million supporting Republican candidates during the election cycle.
The political setback also raised questions about SpaceX’s operations in Ukraine. On Oct. 22, Senator Richard Blumenthal announced an inquiry into restrictions affecting Starlink and Starshield communications. Ukrainian officials said the disruptions hampered efforts to intercept Russian drones. Democratic lawmakers have also requested records ahead of further investigations expected in January 2027.
However, conflicting accounts remain over who authorized the Starshield restrictions. U.S. lawmakers have questioned the disruptions, which Ukrainian officials said weakened their drone defenses. The Pentagon’s inspector general declined a separate request to investigate, leaving responsibility unresolved.
At the same time, there are concerns about Democrats’ policies on the data center industry, which have become toxic to many Americans. Indeed, many Americans voted in favor of several data center moratoriums.
On Oct. 26, SpaceX announced a $40 billion financing agreement to expand its artificial intelligence infrastructure. The Apollo-led arrangement will fund Nvidia chips and related computing equipment. SpaceX expects equipment deliveries to begin in the first half of 2027.
The rising concerns about Democrats’ policies explain why the stock market has continued falling this week. The Dow Jones dropped by over 1,800 points, while the Nasdaq 100 and S&P 500 fell by 4.5% and 5%, respectively.
A potential merger between SpaceX and Tesla could also attract closer scrutiny from Democratic lawmakers, adding regulatory uncertainty for investors.
The bull case for SpaceX is still there
Despite the ongoing SpaceX stock retreat, there are reasons to believe that it will bounce back over time.
One reason for this is that its revenue growth is intensifying. The most recent results showed that its revenue jumped by 161% in the third quarter to $14.6 billion. It also made a big profit of $ 4.4 billion.
The company’s growth is happening across all its businesses, which include space, connectivity, and Super Intelligence. Its AI revenue soared to $7.5 billion from $2.5 billion in the June quarter and $813 million in the same period last year.
The other potential catalyst for SpaceX is that it is moving to expand its Starlink business. It has recently acquired low-orbital spectrum for over $8 billion, a move that will see it compete further with companies like AT&T and Verizon.
Additionally, Kyro AI data shows that the average estimate is that its annual revenue will jump to $48 billion this year, followed by $180 billion next year. This growth makes it one of the fastest-growing companies, a move that is supported by its profits.
SpaceX stock technical analysis
Technicals point to more downside before an eventual rebound. It has dropped below the 50-day moving average and the 61.8% Fibonacci Retracement level. Also, the stock has dropped below the Supertrend indicator.
The Relative Strength Index (RSI) and other oscillators have continued falling. Therefore, the stock will likely continue falling, potentially to the key support level of $100. In the longer term, the stock will likely rebound, potentially to the key resistance level of $150, followed by the key resistance of $176, its highest point in October.
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