Echelon Wealth Partners co-founder Peter Schiff has declared that the artificial intelligence-induced stock market bubble reached its zenith with the initial public offering of Space Exploration Technologies Corp. (NASDAQ:SPCX), warning that substantial overvaluation persists in the sector. In a post on X on July 28, 2026, Schiff highlighted that SpaceX shares have declined more than 20% since going public and have fallen over 52% from their all-time high of $225 per share, signaling that "a lot more air" remains to be released from overhyped AI-related equities.

The economist’s commentary underscores a broader shift in market sentiment toward AI-driven valuations. Schiff previously cautioned investors against buying into hype, noting that SpaceX was "coming back down to earth" following its post-IPO rally. This downward trajectory has erased a valuation amount equivalent to Tesla Inc.’s (NASDAQ:TSLA) market capitalization, reflecting severe pressure on high-growth tech assets. The decline also contributed to Elon Musk losing approximately $100 billion in net worth within a week, reducing his total wealth to around $724 billion according to the Bloomberg Billionaires Index, thereby ending his status as a trillionaire.

Market Sentiment and Short Interest

Market data supports the bearish outlook expressed by Schiff. Research firm S3 Partners reported that SpaceX has emerged as the second-most profitable company for short sellers, who have generated profits exceeding $7 billion by betting against the commercial spaceflight giant. The total value of short positions against SpaceX has reportedly surpassed $26 billion, indicating strong institutional skepticism regarding the company’s near-term valuation prospects.

Technical Outlook

Technical indicators further reflect the negative momentum surrounding the stock. Benzinga Edge Rankings indicate that SpaceX fails to exhibit favorable price trends across short, medium, and long-term horizons. During overnight trading on Tuesday, SpaceX shares decreased by 1.33% to close at $114.86. This continued depreciation aligns with Schiff’s assertion that the AI trade is actively unwinding, suggesting that investors may face further downside risk if broader market corrections in the technology sector materialize.

Short sellers have cleared approximately $7.3 billion betting against Space Exploration Technologies Corp. (NASDAQ:SPCX) since its initial public offering in June, defying broader market trends and executive warnings. According to a report by the New York Times citing market research firm S3 Partners, the commercial space flight giant has become the second most profitable company to short in 2026, contrasting sharply with other artificial intelligence-related shorts that resulted in $200 billion in losses for investors this year.

The profitability of these positions comes despite aggressive pushback from company leadership and prominent investors. Elon Musk previously warned that the survival probability for firms maintaining significant short positions in SpaceX was very low. Additionally, Ron Baron of Baron Capital has maintained a bullish stance, describing the company as an "incredible business" and predicting its stake could rise 30-fold. Conversely, investor Ross Gerber of Gerber Kawasaki advised against betting against the firm, citing its long-term goals as rendering recent stock declines irrelevant.

Short Position Dynamics

S3 Partners’ Head of Predictive Analytics, Ihor Dusaniwsky, noted continued short selling activity since the company’s inception. The total value of short positions against SpaceX has crossed $26 billion. This activity persists even as Tesla Inc. (NASDAQ:TSLA), another Musk-led enterprise, remains a favorite among short-sellers. The divergence between the massive size of the short interest and the realized profits highlights the volatility and specific valuation concerns surrounding the space sector compared to the broader AI boom.

Upcoming Catalysts

Market participants are now focused on August 4, when SpaceX is set to report its second-quarter 2026 earnings. This will mark the company’s first-ever public earnings call, providing investors with detailed operational and financial data for the first time. Following the earnings release, the lock-up period stipulated in the IPO will end, allowing insiders to begin selling stock. This potential influx of supply could further influence share price dynamics in the coming weeks.

What the Numbers Show

The data reveals a distinct divergence between investor sentiment on SpaceX and the broader AI sector. While general AI shorts suffered massive losses totaling $200 billion in 2026, indicating a strong rally or resilience in that segment, SpaceX shorts proved highly lucrative. With $7.3 billion in profits generated from a $26 billion short book, the effective return on short capital is substantial. This suggests that despite high-profile bullish endorsements from figures like Ron Baron and Ross Gerber, market pricing mechanisms have rewarded skepticism regarding SpaceX’s valuation post-IPO.