Short sellers have amassed more than $26 billion in bets against SpaceX (NASDAQ: SPCX), equating to roughly 35% of the company’s entire tradable float, according to data from S3 Partners. Despite the company’s $1.5 trillion market capitalization, the intense bearish activity has generated nearly $7.3 billion in mark-to-market profits for traders wagering against the stock since its record-breaking initial public offering last month. This volume of short interest positions SpaceX as the second most profitable short target of 2026, trailing only Tesla Inc., whose shorts are up almost $9.1 billion.

The heavy short interest persists even as SpaceX secured fast-track inclusion on the Nasdaq 100 and other major indexes, a move that required Nasdaq, FTSE Russell and CRSP to adjust their rules ahead of the offering. S3 Partners managing director Ihor Dusaniwsky noted continued short selling since the stock’s inception. The skepticism reflects broader market caution toward AI leaders, with short sellers collectively down more than $200 billion in 2026 yet continuing to pile into trades against high-profile technology firms.

Key Short Interest Metrics

Two key catalysts could influence the stock’s trajectory in the coming weeks. SpaceX is scheduled to report quarterly earnings on Aug. 4, followed two days later by its first lockup expiry, which will allow early pre-IPO shareholders to sell their holdings. The stock has already fallen nearly 15% from its listing price, and the impending unlock of shares could inject fresh volatility into the market.

Elon Musk has pushed back hard against the bearish crowd, warning on social media that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low.” This comment echoes his long-running feud with Tesla shorts, including his 2018 warning that bears had “about three weeks before their short position explodes” and his 2024 claim that short holders “will be obliterated” once Tesla reaches full autonomy at scale.

Broader AI Sector Pressure

SpaceX is not the only AI-adjacent name drawing significant bearish attention. Hyperscalers Alphabet Inc., Amazon.com Inc. and Microsoft Corp., along with chipmakers Broadcom Inc., Micron Technology Inc. and Nvidia Corp., all rank among the year’s ten most shorted stocks, per S3 Partners. The growing bearish bets add another layer of pressure on a sector already facing scrutiny over its massive AI spending, suggesting that investors are increasingly questioning the valuation sustainability of leading technology firms despite their dominant market positions.

Space Exploration Technologies Corp. (NASDAQ: SPCX) has erased approximately $1.2 trillion in market capitalization since reaching its valuation peak on June 16, 2026. The company’s market value has declined by roughly 46% to $1.42 trillion, a drop equivalent to the entire current market capitalization of Tesla Inc. (NASDAQ: TSLA), which stands at $1.2 trillion. This significant correction follows the company’s initial public offering last month, where it debuted with a valuation exceeding $1 trillion.

The stock priced its IPO at $135 per share and opened trading at $150. By mid-June, the valuation surged to $2.64 trillion, briefly making CEO Elon Musk the world’s first trillionaire. However, the subsequent pullback has compressed the premium significantly. Despite the steep decline, SpaceX remains worth more than Tesla, Berkshire Hathaway ($1.10 trillion), Eli Lilly ($1.09 trillion), and Walmart ($919 billion). SpaceX currently ranks 10th among public companies by market capitalization, while Tesla ranks 11th.

Valuation Comparison with Tesla

The contrast between SpaceX and Tesla highlights differing trajectories in reaching trillion-dollar valuations. Tesla took 18 years to hit the $1 trillion milestone, achieving this status 10 years after its 2010 IPO when it was valued at around $1.7 billion. In contrast, SpaceX entered the public markets already valued above $1 trillion. This structural difference means that any post-IPO volatility for SpaceX involves substantially larger absolute dollar values than Tesla experienced during its early growth phase.

Investor Sentiment and Outlook

Investor reaction to the correction remains divided. Some analysts suggest that the decline reflects a necessary re-pricing from an inflated debut, noting that richly priced IPOs often cool off after initial hype. Others point to the long-term potential of the commercial spaceflight sector. While SpaceX IPO investors hope for a rebound, those who remained on the sidelines may view the pullback as a return to more sustainable valuation levels. The company retains a massive base valuation despite the compression of its premium.

What the Numbers Show

The erosion of $1.2 trillion in value — equal to Tesla’s entire current market cap — underscores the extreme sensitivity of SpaceX’s valuation to sentiment shifts. The divergence between the peak valuation of $2.64 trillion and the current $1.42 trillion indicates that the initial listing price was elevated relative to subsequent trading stability. While SpaceX still commands a higher valuation than several legacy giants like Berkshire Hathaway and Walmart, the rapid loss of wealth suggests that the market is recalibrating expectations for high-growth tech IPOs in the near term.