SpaceX jumps 26% as 219 million shorted shares fuel squeeze

SpaceX shares rose 26% off their August low, briefly trading above the $135 IPO price before slipping to about $133 at noon, as a crowded short position of 219 million shares amplified the rally in the largest IPO in history.

"It's a potential generational compounder that could nearly triple by mid-2027," Adam Jonas, analyst at Morgan Stanley, said, tying his case to Starlink, AI compute, and launch services.

Q2 revenue hit $7.81 billion, up 92% year over year and ahead of the $6.93 billion analysts had modeled. Net loss narrowed to $541 million from $1.008 billion a year earlier, and adjusted EBITDA nearly tripled to $3.54 billion. Argus Research upgraded the stock to buy with a $160 price target on the back of the report.

Short interest stood at 219.3 million shares as of July 29, according to S3 Partners data cited by Bloomberg — a stake that dwarfs the short position in Tesla, Musk's other public company. Against a float of roughly 640 million shares, days-to-cover hovered around one day, well below the seven-day threshold traders flag as a squeeze risk.

The Squeeze Math

The rally reflects both stories at once: real revenue acceleration meeting a short base that's dangerously exposed. Roughly $100 billion in insider shares became eligible for trading around Aug. 6 under SpaceX's staggered lockup schedule, with as much as $800 billion in unlocking through October. Instead of crashing, the stock has climbed through it, telling you demand from retail buyers and short-covering has absorbed the unlock so far.

The fundamentals aren't clean. SpaceX spent $18.37 billion on capital expenditures in the second quarter — nearly double the $10.1 billion spent in Q1 — with $15.83 billion directed at AI infrastructure. That's 2.4 times the revenue the company generated in the same period. Phillip Capital set a $75 price target with a sell rating, citing that spending pace.

Management has been candid that it isn't optimizing for quarterly results; putting people on Mars is a decade-plus project. The company's market capitalization sits near $1.9 trillion, and its addition to the Nasdaq-100 in July pulled in roughly $27 billion of passive buying.

The move has lifted the broader space complex, with Rocket Lab and AST SpaceMobile each climbing 5% to 9% as traders positioned around SpaceX's debut earnings. Shareholders who buy here are betting on 10-year tailwinds — Starlink, space-based data centers, AI compute — while accepting that capex will stay elevated and losses won't disappear soon. That's a reasonable trade for patient investors. It's a risky one for anyone expecting a straight line from $133 to the moon.

This article is for informational purposes only and does not constitute investment advice.