Elon Musk on Wednesday forcefully denied a report that SpaceX had shown investors a prototype of an AI-focused handheld device, dismissing the story as “utterly false” in a post on X.

Musk’s denial came hours after The Wall Street Journal reported, citing people familiar with the matter, that the recently public aerospace and technology giant had privately showcased a sleek, handset-like AI prototype to key stakeholders ahead of its record-breaking initial public offering. The report described the device as thinner than an iPhone, running on a proprietary operating system, integrating artificial intelligence technology from Musk’s xAI division, and powered by Qualcomm’s Snapdragon chips.

The Journal’s account suggested the project remained in its early stages, with SpaceX telling some investors the design was still evolving and that the company had not yet committed to building the device commercially. The report framed the prototype as part of Musk’s broader ambition to create a consumer hardware platform that could unite his sprawling business empire—spanning satellite internet, rocket launches, and artificial intelligence—while reducing dependence on Apple and Google for distribution of services like the X social media platform and xAI’s Grok chatbot.

Following the report, Qualcomm (QCOM) shares gained as much as 3.4% before paring some of the advance, as investors reacted to the prospect of the chipmaker powering a new AI device from one of the world’s most valuable companies. Apple (AAPL) dipped slightly before recovering, closing up 1.8%.

SpaceX itself traded lower on the day, falling 7.9% to a fresh session low after the report circulated. The stock has been volatile since its historic IPO, which valued the company at well over $2 trillion. SpaceX and Qualcomm did not respond to requests for comment.

Musk has sent mixed signals about building a phone for years. In January, he said a Starlink-connected phone was “not out of the question at some point,” while adding that such a device would be very different from current smartphones. Reuters reported in February that SpaceX was developing a mobile device capable of connecting directly to its Starlink satellite constellation, a report Musk denied at the time, stating on X that “we are not developing a phone.”

Last October, Musk addressed the prospect in characteristically blunt terms, saying the idea of building a phone made him “want to die,” but adding: “if we must do it, then we will do it.”

The AI Hardware Race

The Journal’s report arrives amid intensifying competition in AI hardware. OpenAI is working with former Apple design chief Jony Ive on a dedicated AI device, while Microsoft recently unveiled a prototype AI-powered badge for workers featuring Qualcomm wearable chips. Apple itself is reportedly developing multiple AI wearable devices.

SpaceX has invested billions to expand beyond its core launch and satellite internet businesses, pouring capital into AI infrastructure, xAI’s Grok large language model, and plans for space-based computing. The company absorbed xAI earlier this year, along with the X social media platform, consolidating Musk’s technology holdings under one roof.

Wall Street Weighs In

The device speculation surfaced the same day Wedbush analyst Dan Ives initiated coverage of SpaceX (SPCX) with an Outperform rating and a $190 price target, implying roughly 12% upside from Tuesday’s close. Ives framed SpaceX as a three-way bet on launch, connectivity, and artificial intelligence.

In a note to clients, Ives described SpaceX as “one of the most differentiated assets within the tech market” and argued it is “well-positioned to become a major hyperscaler with its vertically integrated platform across connectivity, launch, and AI infrastructure.”

Ives highlighted Starlink as the company’s profit engine, with approximately 12 million subscribers and average revenue per user near $66, while noting the unit holds less than 1% of the global telecom and broadband market. He characterized the launch business—which flew about 170 missions in 2025 and delivered more than 2,200 metric tons to orbit—less as a profit center than as an internal capability that enables everything else.

The analyst reserved his richest valuation multiple for AI and compute, which he said anchors the sum-of-the-parts valuation. SpaceX recently booked large compute deals worth roughly $28 billion annually, led by agreements with Anthropic and Google (GOOGL) to supply computing power for AI models like Claude and Gemini through SpaceX’s Colossus data centers.

Ives also flagged Starship, the next-generation rocket, as “the single largest source of value in the franchise as much as its largest risk.” Starship has flown 12 test flights but has yet to demonstrate in-orbit propellant transfer, a critical capability for deep-space missions. Regulatory pressure could delay payload deliveries slated for the second half of 2026.

Despite the bullish initiation, SpaceX shares have experienced significant swings since going public. The stock is set to join the Nasdaq-100 index on July 7, an unusually fast inclusion that JPMorgan estimates could draw approximately $4.3 billion in buying from index-tracking funds.

For now, the AI device remains firmly in the realm of speculation. Musk’s categorical denial leaves investors to weigh competing narratives: a detailed Journal report citing multiple sources versus the CEO’s unambiguous public rejection of the story.