SpaceX outlook: Where the stock price for this $1.5 trillion giant could land in 2027

Space Exploration Technology (NASDAQ: SPCX) stock closed below $120 on July 20, representing a decline of 25.5% since its first day of trading to the public on June 12. No single issue sent the price lower; it's likely a mix of factors that contributed to the stock price drop.

That said, the sell-off could create a favorable risk-to-reward setup, depending on where analysts see SpaceX stock trading over the next 12 months. But first, let's do a quick dive into that collection of potential reasons why the SpaceX stock price has fallen recently.

The SpaceX decline

There are several possible reasons investors have sold their SpaceX stock. One simple explanation is that the initial public offering hype cooled. For investors who bought on hype alone, they may have been inclined to sell after SpaceX hit a 52-week high of $225.64 but then started to trade lower.

Another reason could be concern that an upcoming lockup period was expiring. The next one occurs just before SpaceX reports its 2026 second-quarter earnings in August. The overall lockup period structure for SpaceX is staggered to prevent additional shares from flooding the market at once. But some investors may anticipate that insider selling could still lead to a larger stock price decline.

SpaceX also delayed the launch of its Starship rocket on July 16, which initially sent the stock lower in extended trading. And more broadly, some investors may just be worried about the recent sell-off around companies with ties to artificial intelligence (AI). Again, there's not one particular issue that explains all the selling pressure. 

The next 12 months could look better for SpaceX

SpaceX faces many challenges as it builds out AI infrastructure in space. It's not a profitable company, and its capital expenditures keep climbing. With that in mind, if SpaceX does become a leader in AI and builds what becomes the new normal of AI infrastructure through space-based data centers, the rewards could be meaningful.

While the stock struggles, analysts remain relatively bullish on SpaceX over the next year. Of the 36 analysts tracked by CNN, the median price target is $225 a share. From the July 20 closing price of $119.85, that would be a return of more than 87% in a year.

That said, there's no guarantee that the median price target will be reached. But what that does offer is a chance for investors to judge whether they think the potential to reach $225 is worth the risk and whether they'd be comfortable holding shares for longer if it takes more than a year to reach that median price target.

Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.