SpaceX Stock in Focus as JPMorgan Warns AI Stocks Face Tough Rebound After October Selloff

SpaceX (NASDAQ: SPCX) stock price is down by 13% in five trading days to trade at $152 at the time of writing. The drop mirrors a massive sell-off across AI stocks, with Nvidia and Micron Technology also dropping by 7% and 15%, respectively.

JPMorgan now warns that these AI stocks might not rebound as swiftly as they did in July after a similar sell-off occurred, because the current market conditions are different.

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JPMorgan Warns AI Stocks May Struggle to Rebound After October

According to JPMorgan strategist Nikolaos Panigirtzoglou, it might be harder for AI stocks to rebound after the October selloff because buying pressure from traders who usually enter the market during dips has weakened.

Panigirtzoglou added that there are also very few short positions that traders have opened on AI stocks. This suggests that even if the prices were to rebound, there is very little short covering that traders can do to sustain an upward trend.

The JPMorgan analyst also attributes the lack of a strong rebound to reduced buybacks by corporates and increased leverage exposure to ETFs that could cause an increase in volatility.

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Barclays Forecasts SpaceX-Tesla Merger Announcement by December

Despite the bearish outlook that is engulfing AI stocks, sentiment towards SpaceX remains bullish, especially now that Barclays forecasts that the company may announce a potential merger with Tesla this year.

Barclays notes that it is likely that SpaceX will announce the merger ahead of Tesla’s 2026 annual meeting. The firm also adds that SpaceX will likely be the one to acquire Tesla in an all-stock deal, as Elon Musk forecasts SpaceX could hit a $100 trillion valuation by 2030.

Amid this highly anticipated merger, Morgan Stanley forecasts that SpaceX may rally to $100 because of major drivers like AI infrastructure and robotics.

SpaceX Stock Price Drops Below Key Support Level

SpaceX stock price was down by 5.71% at the time of writing after a hot US PPI inflation report triggered a selloff across risk assets.

The drop has now pushed the stock below a crucial support zone, and if it closes below it, SPCX might move lower to the next zone between $130 and $135.

The MACD line is tipping south, albeit remaining above the signal line. This drop suggests that the bulls are losing control.

However, if SPCX stock can bounce from the current support zone between $145 and $148, it may record a brief uptrend like it did in mid and late September.

SpaceX will confirm a strong trend reversal if the price can move above the 50-day SMA support at $145, with a swing above this level set to confirm the return of a bullish short-term trend.