Key Takeaways
- Elon Musk dismissed a Wall Street Journal article regarding a SpaceX AI smartphone as “utterly false” via his X platform
- Shares of SPCX declined 7.8% Wednesday in response to Musk’s statement
- The original WSJ article described a device featuring proprietary software, xAI integration, and Qualcomm Snapdragon processors
- SPCX shares have relinquished nearly all post-IPO momentum, now trading 2.1% below listing price
- Wall Street maintains a Moderate Buy consensus on SPCX with a $216.83 price target, suggesting 37.6% potential upside
Shares of SpaceX (SPCX) tumbled 7.8% during Wednesday’s trading session after CEO Elon Musk categorically rejected a Wall Street Journal article that claimed the aerospace company had been demonstrating an AI-enabled smartphone prototype to potential investors prior to going public.
Space Exploration Technologies Corp., SPCX
Musk’s rebuttal on X was terse: “Utterly false.” He offered no additional context or clarification.
According to the WSJ article, which cited anonymous sources with knowledge of the situation, the alleged prototype featured custom-built operating system software, incorporated artificial intelligence capabilities from xAI, and utilized Qualcomm’s Snapdragon processor technology. The initial report temporarily boosted QCOM shares before Musk’s denial sent them retreating 1.55%.
The publication characterized the purported device as having a more refined design than Apple’s iPhone. The WSJ further indicated that the initiative remained in preliminary development phases and might ultimately be abandoned.
This isn’t the inaugural instance that speculation about a SpaceX smartphone has circulated in media outlets. Reuters published a story in February suggesting SpaceX was investigating a mobile device that would connect to its Starlink satellite infrastructure. Musk refuted those claims as well.
Previously in January, Musk had expressed cautious openness to the concept, stating a Starlink-connected phone wasn’t “out of the question at some point” — though he emphasized such a device would differ substantially from conventional smartphones.
SpaceX’s Expanding Artificial Intelligence Ambitions
The smartphone speculation exists within a broader strategic context. SpaceX has been investing substantial capital to diversify significantly beyond its core rocket launch services and Starlink internet offerings. The company is developing AI infrastructure, incorporating xAI’s Grok artificial intelligence model throughout its operational framework, and investigating orbital data center concepts.
The apparent objective is establishing SpaceX as a formidable competitor in the artificial intelligence sector — transcending its identity as merely a space exploration enterprise.
Reuters has also recently disclosed that SpaceX is examining opportunities to launch its proprietary mobile telecommunications network, and is conducting discussions with Charter Communications regarding utilization of its terrestrial infrastructure for cellular traffic. The company has already established a direct-to-cellular agreement with T-Mobile through its Starlink platform.
Current Market Position
SPCX has experienced challenging trading conditions recently. The stock currently sits 2.1% beneath its initial public offering price, having surrendered the majority of its early post-listing appreciation.
According to TipRanks, SPCX carries a Moderate Buy consensus recommendation derived from four Buy ratings, three Hold ratings, and one Sell rating. The consensus price target stands at $216.83, implying 37.6% appreciation potential from present trading levels.
Qualcomm declined 1.55% following the controversy. Both SpaceX and Qualcomm refused to provide statements to Reuters.
Microsoft introduced its proprietary AI-powered badge device for enterprise users last month, which also incorporates Qualcomm wearable processor technology — highlighting the increasingly competitive landscape emerging in AI-enabled hardware products.
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