SpaceX (SPCX) Stock Drops 8% After Musk Shoots Down AI Phone Story

TLDR

• Elon Musk called a Wall Street Journal report about a SpaceX AI-powered handset “utterly false” in a post on X
• SPCX stock fell 7.8% on Wednesday following Musk’s denial
• The WSJ report claimed the device ran on a custom OS, used xAI technology and Qualcomm Snapdragon chips
• SpaceX stock has now given up most of its post-IPO gains and is down 2.1% since listing
• Analysts give SPCX a Moderate Buy rating with an average price target of $216.83, implying 37.6% upside

SpaceX (SPCX) stock dropped 7.8% on Wednesday after Elon Musk flatly denied a Wall Street Journal report claiming the company had been showing investors a prototype AI-powered handset ahead of its IPO.

Space Exploration Technologies Corp., SPCX

Musk’s response on X was two words: “Utterly false.” No further explanation was given.

The WSJ had reported, citing people familiar with the matter, that the prototype device ran on a proprietary operating system, integrated AI technology from xAI, and used Qualcomm’s Snapdragon chips. The report briefly sent QCOM stock higher before Musk’s denial pulled it back down 1.55%.

The device was described as sleeker than Apple’s iPhone. The WSJ also noted the project was in early stages and could be dropped entirely.

This is not the first time a SpaceX phone has made headlines. Reuters reported in February that SpaceX was exploring a mobile device connected to its Starlink satellite network. Musk dismissed those reports too.

Back in January, Musk had left the door slightly open, saying a Starlink phone was “not out of the question at some point” — but added it would look very different from today’s smartphones.

SpaceX’s Broader Push Into AI

The phone story sits inside a larger picture. SpaceX has been pouring billions into expanding well beyond rocket launches and Starlink internet. The company is building out AI infrastructure, integrating xAI’s Grok model across its ecosystem, and exploring space-based data centers.

The goal, by most accounts, is to position SpaceX as a serious player in the AI industry — not just a space company.

Reuters also recently reported that SpaceX is exploring plans to offer its own mobile network, and is in talks with Charter Communications to use its ground infrastructure for phone traffic. The company already has a direct-to-cell deal with T-Mobile through Starlink.

Where the Stock Stands

SPCX has had a rough few days. The stock is now down 2.1% from its IPO listing price, having given up most of its early post-IPO gains.

On TipRanks, SPCX currently holds a Moderate Buy consensus rating based on four Buy ratings, three Holds, and one Sell. The average price target sits at $216.83, which would represent 37.6% upside from current levels.

Qualcomm fell 1.55% on the back of the story. SpaceX and Qualcomm both declined to comment to Reuters.

Microsoft unveiled its own AI-powered badge device for workers last month, also featuring Qualcomm wearable chips — a reminder of just how crowded the AI hardware space is becoming.

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