As the frenzy around artificial intelligence intensifies, concerns over market bubbles are growing, creating opportunities for short sellers to bet against the trend. Among these, short positions against Elon Musk's SpaceX have proven particularly lucrative.

Ihor Dusaniwsky, Head of Predictive Analytics at market research firm S3 Partners, stated on Tuesday that short investors have realized approximately $7.3 billion in profits since SpaceX's initial public offering in June. This stands in stark contrast to other AI-related short trades in 2026, which have collectively incurred losses of up to $200 billion.

The report also indicates that total short interest in SpaceX has surpassed $26 billion. While Tesla remains the most favored target for short sellers, S3 Partners notes that SpaceX has become the second most profitable short trade of the year.

"Short selling has been persistent since SpaceX went public," Dusaniwsky wrote in the report.

SpaceX is scheduled to release its second-quarter 2026 earnings on August 4th, marking its first-ever public earnings conference call. Following the earnings release, as the lock-up period required by IPO regulations expires, some company insiders will be permitted to sell their shares.

Ron Baron Continues to Back SpaceX

Amidst this news, investor Ron Baron of Baron Capital remains supportive of SpaceX despite the stock price decline. He stated that the value of his fund's stake in SpaceX could potentially increase by 30 times in the future. The investor also described the commercial space giant as an "extremely outstanding business."

Meanwhile, Musk has previously issued a warning to SpaceX short sellers, stating that "the probability of a large number of investors shorting SpaceX ultimately surviving is extremely low."

Although Musk is firmly optimistic about the company, some investors harbor doubts about SpaceX's valuation. Gary Black of Future Fund is among them. Conversely, Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, is bullish on SpaceX, advising investors against betting on a share price decline. He argues that the recent stock pullback is insignificant when considered alongside the company's long-term objectives.