SpaceX Slide, Kimi K3 Demand Raise Questions on AI Valuations

SpaceX shares closed below $120 after a seventh consecutive decline, trading more than 11% under the $135 IPO price and roughly 47% below a post-listing high of $225.64. The drop removed over $1 trillion from the company’s peak market value, and the stock finished near session lows.

Investors cited a postponed Starship test and a scrubbed Falcon 9 launch as factors that increased concern about execution risks. Starship is a key element in SpaceX’s satellite deployment plans and longer-term space infrastructure efforts.

Moonshot AI paused new subscriptions to its Kimi K3 model after strong demand, according to reports. The model is described as a low-cost, open-weight system developed by a Chinese team.

The Kimi K3 subscription pause highlighted comparisons of performance per dollar between lower-cost models and higher-priced offerings from U.S. companies. Market participants noted the pause occurred during initial rollout activity.

Some institutional investors traded during the decline. ARK Invest purchased more than $18 million of SpaceX shares while the stock was falling.

Chipmakers tied to AI demand posted gains during the same session. Shares of Nvidia, Broadcom and AMD rebounded, and the iShares Semiconductor ETF rose about 1.3%.

An academic analysis published in June found that parts of the AI sector are supported by revenue growth and adoption, while rapid capital spending and concentrated private valuations create localized risks.

Upcoming events include an expected SpaceX earnings report, another Starship test attempt and the expiration of post-IPO lockups that may increase the public float. Observers are also monitoring whether Kimi K3 achieves wider adoption and whether additional low-cost models appear.

Economist Peter Schiff wrote on social media: “AI isn’t a bubble, but AI stocks are. The bubble has likely already popped.”