Shares of Space Exploration Technologies Corp. (NASDAQ: SPCX) slid more than 11% below their IPO price, closing under $120 amid ongoing market turmoil. This sharp decline has caught the attention of Peter Schiff, chief economist and global strategist at Europac, who suggests it signals the likely bursting of the AI stocks bubble.

Dissecting the AI Stocks Bubble

Schiff draws a key distinction: Artificial Intelligence as a technology is not a bubble, but the AI stocks trading on public markets have likely already popped. The selloff in SpaceX shares serves as a bellwether for broader market sentiment turning sour on speculative AI-related equities. This downturn reflects investors’ increasing skepticism and the growing pressure from international competition, especially from cost-efficient Chinese AI models like Moonshot AI’s Kimi K3 and DeepSeek Chat. Unlike the technology itself, these market-valuations have been inflated beyond sustainable levels, leading to heightened volatility.

Analyzing Investment Opportunities Amid the Selloff

Despite the negative sentiment surrounding many AI stocks, Schiff highlights the potential in companies aligned with enterprise adoption and fundamental technology spending rather than hype-driven speculation. For example:

  • Micron Technology (Nasdaq: MU) saw a 28% drop over 30 days but holds an average 12-month price target of $1,569.29 from 30 Wall Street analysts, implying an upside of over 81% from its recent $865.46 price.
  • Nvidia (NASDAQ: NVDA) shares fell 2.57% recently but have an average target price of $309.94, suggesting a 52.47% gain from the current $203.28.
  • Sandisk Corp. (NASDAQ: SNDK) dropped more than 39% in the past month, yet 17 analysts estimate a 12-month price target of $2,041.88 compared to the current $1,390.

This divergence between price movements and analyst predictions indicates that while the AI hype bubble may have deflated, select players with solid fundamentals could see substantial gains if mainstream AI adoption continues to accelerate. Schiff’s bubble forecast hinges on whether these targets materialize over the next year.

The SpaceX selloff also mirrors broader concerns visible in the technology sector, emphasizing that investors must differentiate between transient market reactions and structural shifts. As AI evolves, companies with tangible enterprise value and innovation stand a better chance of weathering speculative storms.

material is informational and not financial advice