SpaceX Stock Drops 7% After Musk Denies AI Handset Prototype Report

SpaceX shares (SPCX) declined roughly 7% on Wednesday after Elon Musk called a Wall Street Journal report about an AI device prototype 'utterly false,' sending the stock from $170.86 to $157.88 before recovering slightly to $158.33 at the time of writing.

The Wall Street Journal reported that SpaceX privately demonstrated a handset-like device to investors ahead of its June public listing. According to the report, the prototype was slimmer than an iPhone, ran a proprietary operating system, and was built on a Qualcomm (QCOM) Snapdragon chipset. The device also incorporated technology from Musk's xAI unit, which has since been folded into SpaceX. Sources cited in the report described the project as early-stage, with a design that remained subject to change.

Musk rejected the claims in a post on X, which has since been deleted. No regulatory filing, product image, or public demonstration has emerged to support the Journal's account, and SpaceX itself has made no official statement. The denial mirrors a similar episode in February, when Musk disputed a Reuters report alleging that SpaceX was developing a Starlink-branded smartphone.

The stock's decline extends a post-IPO retreat that began shortly after SpaceX priced its June offering at $135 per share, raising approximately $75 billion at a valuation of around $2.09 trillion. SPCX is now trading approximately 30% below its June peak of $225.64, and the current price level sits near a support zone that market analysts have flagged as technically significant in recent weeks.

Qualcomm shares moved modestly higher during the same session, as some traders interpreted the original report as signaling a new chip supply partnership. The divergent reactions in SPCX and QCOM reflected broader uncertainty about the credibility and implications of the Journal's reporting.

SpaceX's business spans orbital launch services, the Starlink satellite internet network, and an expanding artificial intelligence infrastructure effort centered on data centers and satellites rather than consumer hardware. The reported AI device would represent a strategic departure from that focus, which may have amplified investor skepticism following Musk's denial.

With no follow-up statement from SpaceX and Musk's original post removed, market participants have little new information to act on. Analysts note that unresolved questions about the company's product roadmap could sustain selling pressure on SPCX in the near term.