Economist Peter Schiff has reaffirmed his view that the U.S. stock market is in the midst of an artificial intelligence-induced bubble, as Elon Musk-led Space Exploration Technologies Corp. (NASDAQ:SPCX) continues its downward trend.
SpaceX IPO Marked AI Bubble’s Peak
In a post on X on Tuesday, Schiff underlined that the AI trade was unwinding and said that SpaceX was “down over 20% since its IPO.” He then said that it was down 52% from its all-time high of $225 per share.
“It looks like the SpaceX IPO marked the peak of the AI bubble,” the Echelon Wealth Partners co-founder said. He then added that while AI was real, there was a “lot more air left to come out of overhyped AI-related stocks.”
Schiff had previously warned against investing in stocks based on hype, saying that SpaceX was “coming back down to earth” after its post-IPO rally. Notably, SpaceX’s decline has resulted in the company’s valuation losing a Tesla Inc.-sized (NASDAQ:TSLA) figure.
The economist had also said that the rally had caused Musk to lose $100 billion in a week as both Tesla and SpaceX recorded sharp declines. Following the slide, Musk no longer retains the trillionaire title, with his net worth being around $724 billion, according to the Bloomberg Billionaires Index.
Shorting SpaceX and AI?
Meanwhile, market research firm S3 Partners said that SpaceX had become the second-most profitable company to short, with short-sellers clearing upwards of $7 billion betting against the commercial space flight giant. Shorts against SpaceX have also reportedly crossed $26 billion.
Benzinga Edge Rankings show SpaceX fails to provide a favorable price trend in the Short, Medium and Long term.
Price Action: SpaceX shares were down 1.33% to $114.86 during overnight trading on Tuesday.
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