Shares of Space Exploration Technologies Corp. (SpaceX) showed signs of stabilising in pre-market trading on Tuesday after suffering a steep sell-off that wiped out more than 16 percent of the company's market value in the previous session.
As of 17:05 IST, SpaceX shares were indicated at $156.23 in pre-market trading, up 1.05 percent, after closing at $154.60 on Monday, down 16.43 percent or $30.40. While the modest rebound suggests some bargain hunting by investors, overall sentiment remains cautious amid concerns over the company's funding plans and broader weakness across global technology stocks.
The sharp decline pushed SpaceX shares to their lowest level since the company's first day of trading. The sell-off came after reports that Elon Musk's rocket and space technology company is marketing investment-grade bonds, a move widely seen as the first step in what could become a substantial borrowing programme (of about $20 billion) to support its expanding artificial intelligence initiatives.
Investor concerns over rising capital requirements and the cost of funding ambitious AI projects added pressure on the stock, triggering heavy selling throughout the session.
The weakness in SpaceX also reflects a broader reassessment of AI-related valuations across global markets. US technology stocks may come under pressure after a sell-off in South Korean chipmakers reignited concerns about the sustainability of the artificial intelligence-led rally that has driven markets higher over the past year.
Semiconductor companies have been among the biggest beneficiaries of the AI boom, and any signs of slowing demand or stretched valuations are being closely watched by investors.
What Indian investors must know
For Indian investors, the sharp move in SpaceX comes at a time when interest in overseas equities continues to rise. The development has also sparked a wider discussion about investment opportunities across emerging sectors such as space technology, artificial intelligence and advanced manufacturing, with investors increasingly looking beyond a handful of well-known global technology names to gain exposure to long-term innovation themes.
Viram Shah, Founder and CEO of Vested Finance, said, "What happened with SpaceX this week is a useful reminder, not a reason to panic. A stock that ran up almost 70 percent from its IPO price and then gave most of it back in three sessions and that's just what a crowded single name can do, especially one trading at triple-digit multiples."
"The interesting part for Indian investors isn't SpaceX specifically. It is that a lot of people building US portfolios end up concentrated in the same handful of names — the big tech leaders, and now newly listed stories like this one. When you are that concentrated, your outcomes are tied to a few companies and, increasingly, to a single theme, which right now is AI spending," said Shah.
Also, diversification beyond the popular tech names doesn't have to be complicated. "It can mean spreading across sectors that don't all move together, such as healthcare, financials, industrials, consumer staples, so a bad week in tech isn't a bad week for your entire portfolio. It can mean spreading across geographies," said Shah.
Experts say India accounts for roughly 2 percent of the global market cap; the US accounts for the bulk of it, but there's plenty in between. And it can mean simply watching position sizes, that is, how much of your portfolio sits in any one name or one theme.
"The honest tension is that the US market itself has become fairly concentrated, so even a plain index fund now carries heavy exposure to a few large tech companies. That's worth knowing rather than assuming an index automatically diversifies you. None of this is about avoiding tech or avoiding US stocks, it's about not letting a few exciting names quietly become your whole portfolio," explained Shah.