SpaceX Stock Just Crashed — Here’s Why

**Ed Elson** (0:00)
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**SPEAKER_2** (0:38)
When I got a new car, I thought my insurance premium would increase and empty my bank account, like if Fetween won the lottery.

**SPEAKER_3** (0:44)
I've invested most of my winnings in chicken tenders because they're bomb. But bro, I bought a house and it's sick, bro. I'm thinking the floor is going to be all trampoline, bro.
With the helipad on the roof, the contractor said it's structurally unsound, but they're just being babies.

**SPEAKER_2** (0:59)
But switching to Geico saved me hundreds, so my bank account is safe.

**SPEAKER_4** (1:03)
It feels good to save some hard-earned cash.

**Gil Luria** (1:05)
It feels good to Geico.

**SPEAKER_6** (1:08)
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**Gil Luria** (1:48)
If money is evil, then that building is hell.

**Ed Elson** (1:57)
Welcome to Prof G Markets. I'm Ed Elson. It is June 24th. Let's check in on yesterday's market vitals. The major indices declined as tech stocks dropped around the world. More on that in a moment. Meanwhile, oil continued its decline, and finally the dollar hit its highest level since November. On growing expectations for rate hikes this year.
Okay, what's happening? Tech stocks are selling off, and the pain is hard to ignore. So far this week, the NASDAQ 100 is down roughly 4%, meaning that the index has shed over a trillion dollars in the last two days alone. Chipmakers are among the hardest hit, with an index of semiconductor companies dropping 8% yesterday. The route has gone global too, with Asian stocks taking a steeper dive. South Korea's KOSPI is down 10% from near-record highs. But the biggest drop we've seen was SpaceX. The company issued a $25 billion bond offering to finance its AI operations, and over the past three days, the stock has fallen around 20%. So for more on this latest drawdown in the tech market, we're speaking with Gil Luria, head of technology research at DA. Davidson. Gil, good to see you. A lot of pain in the tech sector, the chip stocks especially. AMD is down 5% this week. Nvidia is down 5.5%. TSMC and Broadcom down 8%.
What is going on here? Why are investors so concerned right now?

**Gil Luria** (3:35)
I'd characterize it as a lot of volatility. The dispersion in outcomes for next year is bigger than it's been in a while. If you think about it, if AI goes well, GDP in the US may grow 5% next year. If AI rolls over and the cycle is over, GDP may only increase by 1% or 2% next year. Usually, we're trying to figure out if GDP is going to grow 2.8% or 3.2%.
Right now, the range of outcomes is really big. So anytime something happens in AI that makes people more optimistic, these semi-stocks continue to run. And anytime there's a sense in the market of maybe we're close to the top, then we get these big corrections. So most of what we're seeing right now is just tremendous volatility.

**Ed Elson** (4:19)
What do you make of what's happened with SpaceX here? I mean, we talked about it last time. I think we talked before it went public, or at least maybe in the first few days. And it's been kind of a stunning drawdown.
I'm not personally that surprised by it, because, I mean, I kind of thought this had to happen eventually. But what do you mean?

**Gil Luria** (4:40)
You were very vocal about that. You were very vocable. And I think that was very helpful to investors going in, that you spent a few days preparing investors, that there's going to be a first APOP, which happened, and then the stock may come down from there.