Like its founder, SpaceX is the most hyped—and the most controversial—unicorn of the moment.

Nothing has been business as usual when it comes to the satellite/rocket/AI company’s impending IPO: First, its pricing strategy is unconventional. Instead of setting a range and amending it after meeting with investors, the company said in a weekend filing that it plans to sell 555,555,555 shares at $135—a bold and definitive move. There are signs that retail investors might propel that price even higher when the company starts trading on the Nasdaq on June 12.

That would mean SpaceX would raise about $75 billion at a valuation of $1.77 trillion. It would be the biggest IPO in history, and would also mean the company doubled its value from just six months ago. And even more out of this world? SpaceX’s proposed valuation is an eye-popping 95x its 2025 revenue of $19 billion.

To bulls, the brash display of confidence is a green flag that Musk sees strong demand from investors. The retail crowd that’s devoted to Musk’s companies is all in. And the banks are mobilizing, too: Jamie Dimon is selling SpaceX to high-net-worth investors himself.

The bears are coming out of hibernation

SpaceX is garnering as many skeptics as fans. After all, the company failed to make a profit last year, losing $4.9 billion. Despite doing all of the things, it hasn’t actually nailed down how to be a lucrative business.

Right now, SpaceX is actually a quite successful satellite company, thanks to Starlink. But in its filing, SpaceX says it wants to, “Build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars.” That certainly sounds like no easy feat.

Concerns about the business model (or lack of one) spurred Morningstar analysts to offer their own valuation of SpaceX, far lower than the private market’s, at $780 billion. Cue the short sellers swarming.

And the doubts don’t stop at the balance sheet. While its acquisition of xAI is part of what’s driving up SpaceX’s astronomical valuation, it’s also its biggest vulnerability: It exposes shareholders to an expensive, highly competitive industry that’s largely speculative.

“In the ‘catalyst’ scenario, these companies [SpaceX, Anthropic, and OpenAI] go public and perform well,” explained Pitchbook analyst Emily Zheng in an interview last week. “The ‘distraction’ scenario, or the unfavorable scenario, would be if they don’t perform well. That could trigger a broader market reset around whether AI companies are overvalued.”

How can investors gauge whether SpaceX will be able to meet its lofty valuation? Zheng says watch revenue: “They’ve been able to get a lot of private money, but at a certain level, they need much more. So in a way, the defining question will be: How quickly can they get costs down and revenue up?”

Only time will tell: Either the bulls will drop back down to earth, or the bears will be left earthbound as SpaceX rockets toward the stars. —LB

🟢 What’s up

• Alnylam Pharmaceuticals surged 3.78% after announcing a $2 billion AI drug discovery partnership with Inceptive Nucleics.
• Blackstone rose 7.50% as investors looked past withdrawal limits at one of its private credit funds, lifting peers Ares Management and KKR, which gained 5.94% and 5.45%, respectively.
• UnitedHealth climbed 19.47% on a Bank of America upgrade, with analysts pointing to improving medical-cost trends ahead of earnings.
• Redwire jumped 15.09% after securing another space contract, this time with regenerative agriculture startup Astrobiome Space.
• Biotech stocks Zoetis and Elanco Animal Health popped 2.49% and 0.51%, respectively, after a flesh-eating livestock parasite was detected in Texas.

What’s down

• Broadcom tumbled 12.59% after reporting weaker-than-expected revenue in its fiscal second-quarter earnings report.
• Five Below dropped 13.78% as investors questioned the assumptions behind management’s forward guidance, despite strong earnings.
• Petco slid 6.07% after issuing a softer-than-expected quarterly forecast and reporting a wider net loss compared to a year ago.
• Ciena declined 13.66% as investors looked for stronger full-year guidance despite solid quarterly results.
• Tommy Hilfiger and Calvin Klein parent PVH plunged t% after cutting its full-year outlook and warning that the Iran conflict would weigh on sales.

RIP to the PDT. That’s right, the 25-year-old “pattern day trader” rule, a relic of the dot-com crash that’s long frustrated investors, is officially dead. Under the rule, brokerages had to ID their most active traders (folks with four or more day trades within five business days), and those investors were required to hold at least $25,000 in their account.

In April of this year, regulators at the SEC agreed to scrap the rule, and the repeal goes into effect today. Robinhood and Webull are dropping the limits right away; Charles Schwab and others follow soon, per the Wall Street Journal.

As for what this means for markets, well, you can obviously expect more trading, especially from small investors using borrowed money. But there’s a catch: The repeal is happening just as AI stocks stir up bubble talk—an echo of the very crash that inspired the rule in the first place.

We spoke with Robinhood Chief Brokerage Officer Steve Quirk back in April about what retail investors should expect. See what he said here.—AC

The biggest threat facing cybersecurity stocks this week wasn’t hackers. It was investors.

First up was Netskope, which beat on both revenue and earnings for the quarter. Revenue rose 28% year over year, while annual recurring revenue grew 29%. But with investors hoping for an even bigger upside surprise, and with CFO Drew Del Matto announcing his departure, shares tumbled tk%.

CrowdStrike got a similar reaction. The cybersecurity giant narrowly beat expectations, with revenue increasing 26% from a year ago. Management even announced a four-for-one stock split, but shares still fell tk%.

Palo Alto Networks also saw its revenue rise 31% year over year. Its backlog—the value of signed contracts that have yet to be recognized as revenue—grew 36%. Even so, shares slipped tk% this afternoon.

The AI alliance

Part of the selloff may simply be a case of investors taking profits. Cybersecurity stocks have been among the market’s best performers this year, with CrowdStrike and Palo Alto both up around tk% year to date. After a run like that, investors expected them not just to beat estimates, but to smash them.

The sector’s performance has proven more resilient to AI disruption than many investors once feared. Rather than competing, AI and cybersecurity companies are increasingly working together: Both CrowdStrike and Palo Alto are early participants in Anthropic’s Project Glasswing, an initiative to find and patch vulnerabilities in critical software.

Cybersecurity firms are also racing to embed AI into their own platforms through acquisitions. CrowdStrike recently acquired identity security startup SGNL and AI security company Pangea, while Palo Alto has closed five AI-related acquisitions over the past year.

Survival of the biggest

Analysts were quick to jump in after the selloff. Oppenheimer and BTIG both lowered their price targets on Netskope while maintaining bullish ratings, noting that the company’s updated fiscal 2027 outlook sets a high bar for future performance. Meanwhile, sentiment around Palo Alto and CrowdStrike remained more constructive, with analysts continuing to view both companies as key beneficiaries of AI.

Morgan Stanley Managing Director Meta Marshall raised an interesting point: Companies now worry about new risks, like employees using AI unsafely, AI-generated cyberattacks, and AI agents accessing sensitive data. That complexity benefits large cybersecurity platforms as customers increasingly want one system that can handle many security functions at once.

For smaller firms like Netskope, even strong earnings means the bar is getting higher. At the end of the day, in cybersecurity’s AI era, the biggest winners could simply be the biggest platforms.—SY

• US jobless claims rose to a four-month high last week, but economists say it doesn’t mean layoffs are rising.
• For the first time in the US by public vote, a city voted to ban datacenters.
• Quantum computing company Quantinuum went public today at $60 per share, debuting on the Nasdaq.
• Kalshi is reportedly creating a “Bloomberg terminal” for highly active prediction-market traders.
• Be careful who you connect with on LinkedIn. They could be a spy.

Earnings announcements: No earnings of note tomorrow, and the announcement season really begins to wind down in the coming days.

Economic reports: The spotlight will likely be stolen by the US jobs report for the month of May.

The fun stuff: It’s Game 2 of the NBA Finals, and the Spurs are looking to even things up after losing Game 1 to the Knicks.