Space X shares tumbled for a third consecutive day, erasing $600 billion in market value after the company announced its first investment-grade bond offering to fund artificial-intelligence ambitions. The stock plunged 16% Monday to $154.60, with its market capitalization now sitting just above $2 trillion. This dramatic sell-off follows intense retail-driven volatility typical of low-float IPOs.

Retail investors poured $405 million into Space X during its first five trading sessions, outpacing purchases across all Magnificent Seven stocks combined. Despite Monday's decline, retail traders remained net buyers, though at reduced levels from the previous week. The company's $75 billion IPO initially attracted fervent attention given only 4.2% of shares were available to trade on day one.

Analysts at Key Banc Capital Markets initiated coverage with a sector-weight rating, the first hold-equivalent assessment. Michael Leshock's team noted Space X will likely maintain its space-launch leadership, but believes long-term value is already reflected in the current stock price. The firm is pursuing at least $20 billion through its inaugural bond sale while expanding AI operations via its xAI acquisition.

Space X also secured a multibillion-dollar computing deal with Reflection AI, intensifying investor focus on its AI strategy. Competitors Anthropic PBC and OpenAI reportedly eye IPOs this year with $1 trillion valuations, setting up a heated battle for AI market dominance that could reshape the entire industry landscape.