SpaceX shares jumped 11% following an upgrade from investment research firm Argus, which argued that the company’s aggressive spending on artificial intelligence would ultimately reward shareholders and cautioned investors against betting against founder Elon Musk.
The rally marks a sharp reversal of sentiment for a stock that had fallen in recent sessions amid unease over rising costs and the expiration of an insider lockup that freed millions of shares to trade.
Argus said the company’s AI initiatives are poised to translate into meaningful returns as they mature, framing the recent pullback as an overreaction rather than a signal of deteriorating fundamentals. “Don’t bet against Musk,” the firm noted in its upgrade, pointing to his record of turning heavy upfront investment into long-term value.
The endorsement directly addresses the concern that had rattled the market. In earlier sessions, investors reacted sharply to the scale of the company’s AI spending plans, sending the stock lower as some questioned whether the outlays would pay off.
Analysts monitoring the move also pointed to the possibility of a short squeeze contributing to the double-digit gain. Short sellers had built positions against the stock ahead of its first earnings report and the lockup expiration, and a rapid upward move can force those bearish traders to buy back shares to cover losses, accelerating the rally.
The lockup expiry had initially pressured the stock as newly tradable shares hit the market, compounding the anxiety over spending. The latest bounce suggests buyers have stepped in following that selloff.
The upgrade reframes SpaceX’s capital-intensive strategy as a calculated bet rather than a red flag. Heavy investment in AI infrastructure has been a recurring theme in the company’s messaging, and the debate among investors has centered on the timeline for those investments to generate returns.
This development comes as the stock has experienced heightened volatility around its transition to a more scrutinized phase as a widely traded company, with each earnings signal and analyst call drawing outsized market reactions.
Whether the rebound holds will likely depend on future guidance and evidence that the AI spending is beginning to convert into revenue. For now, the Argus call has offered a counterweight to the caution that dominated the prior week’s trading.