A quick market note before the two updates. The Nasdaq has spent the last couple of weeks going sideways-to-lower — off nearly 3% on the week at one point — pulled by two crosscurrents: a heavy U.S. military build-up in the Gulf, and a fresh “is AI overbuilt?” scare after a China model narrowed the gap with the U.S. leaders and knocked the semiconductors.
A word on the first one, because it deserves it: a real conflict in the Gulf would be a human tragedy first and a market event a distant second, and we genuinely hope it doesn’t come to that. But history is also clear — U.S. markets have absorbed every major geopolitical shock of the last century and come out the other side. Markets loathe uncertainty more than they loathe bad news. None of it changes the two stories below — and it has pulled some good names back to more interesting prices. That’s usually where we like to do our shopping.
Compass Pathways (NASDAQ: CMPS) — the thesis is playing out, and Big Pharma just showed its hand
NASDAQ: CMPS
When we flagged CMPS to you back in April around $9.30, the setup was two successful Phase 3 trials, an FDA submission getting underway, and a White House executive order pulling the regulatory runway forward. Since then it’s done what we hoped — running as high as just over $15, which for anyone who acted on the alert was a gain of roughly 60% in about three months, before easing back with the broader tape to around $11.67 (still ~25% above where we flagged it).
Two developments stand out:
1. The 26-week data held (July 7).
Compass reported the six-month durability results from its second Phase 3 trial — the response to COMP360 psilocybin held through 26 weeks, with serious side effects low and similar to placebo. Durability was the single biggest question mark for a one-or-two-dose depression therapy, and it cleared the bar. The rolling FDA submission is still targeted for Q4 2026, and the program carries a Priority Review Voucher that can shorten the FDA’s review to as little as 1–2 months — putting a potential launch in first-half 2027 in view.
2. Eli Lilly just paid up for the space.
In July, Eli Lilly agreed to acquire ATAI for $2.8 billion — up to $9.25 per share — to add late-stage, treatment-resistant-depression psychedelic programs to its neuroscience pipeline. ATAI was, for years, Compass’s largest shareholder. When a $700-billion pharma writes a multi-billion-dollar check for earlier-stage assets in this exact category, it tells you how it values the leader.
We’re not predicting a buyout — but CMPS now screens as a logical takeout candidate, and in a space where Big Pharma just spent $2.8 billion to buy its way in, the clinical leader rarely stays independent forever. That optionality is a free call option on top of the fundamental story.
Our view is unchanged: accumulate on weakness, size it as a clinical-stage biotech. Approval isn’t guaranteed and the shares are volatile — but the science is de-risked, the filing is in motion, and the strategic value of the category just got a $2.8-billion price tag.
SpaceX (NASDAQ: SPCX) — Wall Street has now weighed in, and the stock is on sale
NASDAQ: SPCX
We wrote up SpaceX for you shortly after its record-setting June IPO at $135, calling it a hold-for-years position and telling you plainly to buy in pieces and let the lock-up-driven volatility come to you rather than chase. That’s exactly what’s happened. The stock has pulled back to around $113 — below the IPO price — pressured by the normal post-IPO share-unlock supply and the broader tech wobble.
Meanwhile, the analysts finally showed up — and they showed up bullish. In early July, at least half a dozen major firms initiated coverage, all buy-equivalent, including Morgan Stanley (base case $300), Bank of America ($235), Citi ($200, with a bull path north of $900), and Raymond James (Strong Buy, $800). The consensus target now sits around $244 — roughly double the price.
And here’s the kicker the Street is only starting to price in: SPCX has become the most-shorted new stock on Wall Street — roughly a third of its tradable float (~196 million shares) is sold short, up from ~40 million a month ago, and that’s only what’s disclosed. On a stock that floated barely 4% of itself, that’s a coiled spring. Elon Musk does not suffer short sellers quietly — he warred with Tesla’s bears for years, and he’s already firing back at SPCX’s.
The bigger prize: one ticker for the whole Musk empire. On Tesla’s earnings call this week, Musk reopened talk of a Tesla–SpaceX combination — “more and more overlap,” handled through “an appropriate process” — and Deepwater’s Gene Munster promptly raised his odds of a deal to 90% within a few years. SPCX already absorbed xAI; add Tesla and this becomes the single holding vehicle for the entire Musk empire — rockets, Starlink, AI, and cars — in one ticker.
The near-term catalysts are stacking up: the next Starship flight, and on August 4 the company’s first-ever public earnings. As always with SPCX, mind the lock-up calendar — the first 20% insider unlock lands just after earnings — and keep dry powder. A name we liked at $155 is now in your hands near $113, with the Street targeting far higher.
Bottom line
The market’s nervousness is doing patient investors a favor on both of these. We’re not chasing — we’re accumulating quality on weakness, exactly as we laid out. More soon.
— Dave Jones, Publisher, Wall Street Profit Search