Musk's mojo fades as Tesla and SpaceX shares slide

Is rationality returning to the markets? Musk's mojo fades

Recent trading sessions have brought a significant correction in the market's most overvalued stocks, especially those tied to artificial intelligence and data centers. SpaceX has fallen 30% since its IPO, Tesla 25%, and names like Meta (-10%), Intel (-8.5%) or Qualcomm (-11%) took a severe beating in a single session. Yet barely 24 hours later, stocks like IREN rebounded 27% and Sandisk 22%, leaving the question hanging: are we looking at a simple short squeeze or the start of a turn toward fundamentals?

The end of the Musk era
SpaceX and Tesla are the cryptocurrencies of the US market. Companies whose valuations rest on promises of robotaxis, interplanetary travel or tech monopolies that do not yet exist. While Tesla is worth more than all European, Japanese and US carmakers combined, its actual products (cars) are good, but they do not justify those numbers. The argument that the real golden goose is robotaxis runs into reality: even in China, with widespread 5G, autonomous vehicles only operate on controlled routes. The connectivity needed for mass deployment is far off, and Starlink cannot handle even 1% of global data traffic.

The AI bubble starts to sustancia ilegal
The narrative that artificial intelligence was going to transform the world overnight is starting to lose credibility. More and more investors are focusing on cash flows and fundamentals, setting aside stories of exponential growth. SaaS companies are up, the 'superpumped' ones are down. The correction has hit those most exposed to data centers especially hard: Lumentum (-10%), Coherent (-11%) or RocketLab (-11%), although some recovered ground the next day, suggesting volatility rather than a trend change.

The robotaxi mirage
An investor living in China describes his experience: he rode an autonomous bus at the IOT World Expo in Wuxi in 2019, seven years ago, and since then he has barely seen pogre in his city. The videos circulating are from controlled zones and strict routes. In countries without real 5G, such as Spain, viability is even lower. Musk is betting on Starlink, but the satellite network's capacity is insufficient to handle banking data, let alone a fleet of autonomous taxis.

Short squeeze or real recovery?
The rapid rebound in some stocks (IREN +27%, Sandisk +22%) smells more like a short squeeze than a return to rationality. A bubble can take years to deflate, punctuated by bull traps that fool the unwary. For now, the market still cannot decide between faith in Musk's dreams and the harsh reality of the balance sheets.