Investing isn't just for Wall Street's biggest financial institutions anymore. According to an analysis by the University of Missouri-Kansas City School of Law, retail investors accounted for 25% of total equities trading volume in 2021, which was nearly double the reported percentage from the previous decade.
As retail investors make their presence felt, it pays to know which stocks they're buying. Based on data aggregated by Vanda Research, as of July 17, one stock was the runaway winner in terms of net flows by individual investors in July -- and neither Nvidia nor Apple even made the list of top buys. The trillion-dollar stock that retail investors are piling into is none other than Elon Musk's Space Exploration Technologies (SpaceX) (SPCX +2.56%).
Image source: Getty Images.
The buzziest IPO in history combines Wall Street's two hottest trends Data from Vanda shows that retail investors spent $320 million through the first 2.5 weeks of July purchasing shares of SpaceX. To put this figure into perspective, retail investors poured four times as much into SpaceX as they did into Alphabet, Amazon, and Tesla, combined!
Some of this buzz certainly ties into SpaceX's record-breaking initial public offering (IPO). SpaceX raised $85.7 billion from its debut, including the underwriters' overallotment option.
Retail investors have poured $320 million into SpaceX $SPCX this month--by far the most of any individual stock 🚀 pic.twitter.com/DiTCixpPal
-- Barchart (@Barchart) July 20, 2026 It's also tackling two of the hottest trillion-dollar addressable opportunities on the planet: artificial intelligence (AI) and space. SpaceX's prospectus laid out a $28.5 trillion addressable market, $26.5 trillion of which is tied to AI start-up xAI.
Furthermore, Musk has generated otherworldly returns as Tesla's CEO, and retail investors are hoping for an encore performance as CEO of SpaceX.
But while the catalysts are evident, so is the laundry list of risk factors.
Image source: Getty Images.
SpaceX may represent the biggest fleecing of retail investors in Wall Street's storied history Retail investors who purchased SpaceX stock in July have little to be thankful for, with shares down 28% since the month began (through the closing bell on July 21). Despite the early buzz that lifted SpaceX to a nearly $3 trillion valuation, reality is setting in.
While SpaceX is tackling two trillion-dollar addressable opportunities, the company isn't profitable and hasn't yet established that its capital-intensive operations are even sustainable over the long term. The extensive funding needs for xAI and the company's space infrastructure are likely to result in dilutive equity and/or debt offerings.
Retail investors are also on the verge of being fleeced by insiders.
Great look at the SpaceX shares unlock schedule as well as the potential passive buying schedule from @JSeyff @FrancisSharoon Depending on the early post-IPO returns, this could really play with and disperse the returns of "passive" funds (which is why there's arguably no such... pic.twitter.com/KOuEkJlngF
-- Eric Balchunas (@EricBalchunas) May 28, 2026 Whereas most newly public companies prohibit insiders from selling their shares for 180 days after debut, SpaceX is using an accelerated and staggered unlock schedule for select insiders. Beginning as early as two days after the company's first quarterly report on Aug. 4, insiders can start cashing out at retail investors' expense. This wealth transfer from retail investors to insiders should continue through mid-December.
Additionally, Elon Musk doesn't have the best track record of delivering on his outlandish guarantees. Although these promises are baked into Tesla's share price, the overwhelming majority of innovative promises made by Tesla's and SpaceX's boss have failed to come to fruition.
Retail investors piling into SpaceX in July are likely to regret their decision.
Sean Williams has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
SpaceX (SPCX +2.56%) is one of the most unique businesses to ever hit public markets.
Many in the general public think of the company as a rocket stock. And this is true. SpaceX is arguably the leading rocket company in the world right now, with technology and capabilities greater than any competitor.
But SpaceX is far more than a rocket company. More than 90% of the company's claimed total addressable market, for example, deals exclusively with artificial intelligence (AI). In many ways, SpaceX should be thought of as an AI company, not a rocket company.
Further still, SpaceX has dreams of making the human species interplanetary. The company's initial public offering (IPO) prospectus mentions dozens of times its intention to form colonies on planetary bodies other than Earth. According to filings, SpaceX intends to begin this process by first establishing a human base on the moon.
"Our mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars," SpaceX's IPO prospectus declares. "To do this, we have formed the most ambitious, vertically integrated innovation engine on (and off) Earth with unmatched capabilities to rapidly manufacture and launch space-based communications that connect the world, to harness the Sun to power a truth-seeking artificial intelligence that advances scientific discovery, and ultimately to build a base on the Moon and cities on other planets."
These are bold claims. And investors would be wise to note that building a base on the Moon -- not to mention building cities on other planets -- is mentioned last in SpaceX's mission statement.
Still, the claims do raise the question: When exactly might SpaceX return humans to the moon? Statistics from betting market Kalshi give us some indication of what some people think, although these markets need to be viewed critically. Betting markets are opaque and lightly regulated, and investors shouldn't rely on them for making decisions.
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Betting markets are bullish on SpaceX's moon ambitions SpaceX's own website claims that it will conduct "cargo flights to the lunar surface for research, development, and exploratory missions ... no earlier than 2028." NASA, meanwhile, recently announced a $20 billion initiative aiming to establish a permanent nuclear-powered base on the Moon's south pole by 2032. Put together, investors should expect significant movement in SpaceX's moon base efforts in the coming years.
Image source: Getty Images.
Although we don't have betting market information for SpaceX's upcoming moon landings, we do have some interesting statistics related to SpaceX's efforts to land humans on the surface of Mars. Presumably, these efforts would come after a moon base is established, giving investors some insight into the timing of both.
According to Kalshi, SpaceX "plans to send a million people to Mars using a thousand Starships sent during a Mars launch window, which occurs approximately every 26 months. Proposed journeys would require 80 to 150 days of transit time, averaging approximately 100 days."
Since 2024, investors have been betting on whether SpaceX will launch a manned flight to Mars before the start of 2030. In November of 2024, the predicted odds of this happening peaked at about 25%. Currently, however, the odds of the company launching a human flight to Mars by 2030 have slipped to about 10%.
Notably, Kalshi also has a small market where investors can bet on whether SpaceX will successfully land anything at all on the surface of Mars by 2030. In 2024, the odds were about 40%. Today, they hover just below 30%.
Earlier this year, the BBC reported that China is forging ahead with its own plans to land humans on the Moon by 2030. This news should trigger increased interest in the U.S. completing its own moon mission by that time. With best-in-class rocket technology, SpaceX should benefit from the renewed space race.
Although AI remains critical to SpaceX's growth trajectory, investors should expect plenty of investment in its moon project. Public and private interests seem to be aligning behind these efforts.
Technology may prove the biggest limiting factor to returning to the moon by 2030. I'm also keeping a close eye on SpaceX's funding capacities. Following a successful IPO, SpaceX's stock price is now below its offering price for the first time. And while plenty of financing options remain on the table, SpaceX may be forced to allocate its capital more tightly should markets fall or investor enthusiasm wane.
This is the biggest factor long term for SpaceX's growth ambitions: access to capital. That's especially true given the company remains unprofitable, with heavy capital expenditures resulting in mounting losses so far this year. The company's ability to scale its AI business, establish a base on the moon, and launch humans toward Mars will rely just as much on finances as it will on ambition.
Space Exploration Technologies (SPCX +2.56%) had its initial public offering (IPO) on June 12 and was fast-tracked into the Nasdaq-100 on July 7. But SpaceX won't be added to the S&P 500 (^GSPC -1.21%) or to index funds and exchange-traded funds (ETFs) that track the S&P 500 until at least a year after its IPO. That means that SpaceX is still not a holding in Vanguard's largest ETF by net assets: the Vanguard S&P 500 ETF (VOO -1.21%).
However, there are plenty of major Vanguard ETFs that don't use the S&P 500 as a benchmark. Here's how much SpaceX stock they are buying and what investors should expect their SpaceX positions to look like in the coming months.
Image source: Getty Images.
$6.1 billion in SpaceX stock The wait is over. Vanguard finally updated its ETF holdings as of June 30. Even though that period marks less than three weeks after SpaceX's IPO, several of Vanguard's largest ETFs were already gobbling up SpaceX.
After digging through Vanguard's 48 passively managed equity ETFs, these are the ones that bought SpaceX stock as of June 30 (to the best of my knowledge):
Vanguard ETF
Current % of Funds
SpaceX Ranking
Shares
Market Value1
Hypothetical Eventual Percentage of Funds2
Vanguard Communication Services ETF (VOX -3.52%)
2.37%
13
632,077
$142 million
20.3%
Vanguard Extended Market ETF (VXF -0.45%)
1.14%
1
6,775,494
$1.158 billion
0%
Vanguard Mega Cap Growth ETF (MGK -2.38%)
0.48%
41
942,362
$161 million
4.1%
Vanguard Growth ETF (VUG -2.22%)
0.29%
49
6,480,297
$1.107 billion
3.4%
Vanguard Russell 1000 Growth ETF (VONG -1.86%)
0.24%
51
757,638
$129 million
3%
Vanguard Large-Cap ETF (VV -1.24%)
0.16%
110
689,533
$118 million
2%
Vanguard Total Stock Market ETF (VTI -1.13%)
0.14%
110
18,738,438
$3.202 billion
1.7%
Vanguard Russell 1000 ETF (VONE -1.22%)
0.13%
120
87,520
$15 million
1.8%
Vanguard World Stock ETF (VT -1.10%)
0.08%
196
441,613
$75 million
1.1%
Data source: Vanguard. 1. Market value as of June 30, 2026. 2. Hypothetical eventual percentage of funds based on Meta Platforms' weighting in each fund.
Investors can expect SpaceX's weighting in these ETFs to increase in line with the SpaceX shares available for trading on the Nasdaq -- known as the float. For the time being, SpaceX isn't weighted in these ETFs based on its market cap but rather on a float-adjusted weighting to account for the vast majority of SpaceX shares that are held by insiders and restricted from trading.
However, 20% of Early Release Eligible Shares will be unlocked on Aug. 6. A total of 55% of Early Release Eligible Shares could be unlocked before the end of October.
Investors can expect ETFs to gradually increase their SpaceX holdings as its float increases. Eventually, SpaceX will be weighted by its market cap rather than its float. With a market cap of $1.5 trillion at the time of this writing, SpaceX currently has roughly the same market cap as Meta Platforms.
The table's Hypothetical Eventual Percentage of Funds column uses Meta as a proxy for weighting SpaceX in each fund. It shows Meta's current weighting in each fund and, therefore, roughly what SpaceX would be weighted once it is based on market cap rather than float.
On a percentage basis, the Vanguard Communication Services ETF has the largest SpaceX position -- making it the ETF's 13th-largest holding. Surprisingly, SpaceX is the No. 1 largest holding in the Vanguard Extended Market ETF. But that ETF tracks the S&P Completion Index, which includes mid- and small-cap equities. SpaceX may temporarily appear in that index due to its float-adjusted market cap, but investors should expect its weighting in the Vanguard Extended Market ETF to be 0% before the end of the year.
As you can see in the table, SpaceX was added to Russell 1000 funds because SpaceX is in that index, which doesn't have the same admission standards as the S&P 500. And it's also on track to be a major holding in the Vanguard Growth ETF, one of Vanguard's largest ETFs by net assets; the Vanguard Mega Cap Growth ETF; and the Vanguard Total Stock Market ETF -- the second-largest Vanguard ETF by net assets, behind the Vanguard S&P 500 ETF. The Vanguard Total Stock Market ETF is so big that even a 0.14% position is worth over $3 billion -- giving the ETF roughly the same number of SpaceX shares as the other eight Vanguard ETFs combined.
The Vanguard World Stock ETF holds the smallest SpaceX weighting because it includes more than 10,000 stocks from developed and emerging markets. Even if SpaceX had Meta Platforms' weight in that ETF, it would still be a small position at just 1.1%.
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An excellent ETF to buy and hold There are plenty of ways to get exposure to SpaceX, such as buying the stock directly, selecting an ETF where SpaceX will soon become a top holding, like the Vanguard Communication Services ETF, low-cost growth ETFs, or general total U.S. or world stock market ETFs.
The dirt cheap 0.03% expense ratio and simplicity of the Vanguard Total Stock Market ETF make it my favorite buy of the bunch. The ETF is very similar to the Vanguard S&P 500 ETF, since the S&P 500 accounts for about 80% of the U.S. stock market. But I like the additional diversification that the Total Stock Market ETF provides.
The Total Stock Market ETF added SpaceX faster than an ETF that is tied to a rules-based index like the S&P 500. And it will probably add Anthropic and OpenAI within weeks of their IPOs.
All told, investors who want a smaller position in SpaceX may prefer the Vanguard Total Stock Market ETF over the growth of sector-specific funds.
SpaceX (NASDAQ: SPCX) stock is under significant pressure just over a month after its initial public offering (IPO), with the latest market data showing that a significant portion of the shares have been sold short.
Specifically, short interest stands at 111,298,613 shares, representing 17.43% of the company’s public float, according to the figures Finbold obtained from Fintel on July 24.
In other words, nearly one in every five SpaceX shares available for public trading is currently being wagered against by bearish investors, which further highlights the growing skepticism that surrounds the company, as a short position is created when investors hope to buy shares back later at a lower price.
At press time, SpaceX shares are trading at $118.24, down 23.49% in the last month.
SpaceX stock price. Source: Finbold Traders are turning bearish on SpaceX stock The same data also shows a short interest ratio of 1.60 days to cover, indicating that it would take short sellers approximately 1.6 trading days to repurchase all borrowed shares based on the stock’s average daily trading volume. While the ratio is relatively low, the sheer number of shares sold short underscores the scale of bearish positioning.
Meanwhile, off-exchange short volume reached 24.95 million shares, with an off-exchange short volume ratio of 65.53%. This indicates that a large portion of short-selling activity is occurring in alternative trading venues.
With more than 111 million shares sold short and 17.43% of the public float tied to bearish bets, SpaceX remains one of the more heavily shorted large-cap stocks. This appears consistent with the warnings issued by analysts about the discrepancy between the $1.77 trillion IPO market capitalization and the firm’s revenue and losses in the first quarter (Q1) of 2026.
Looking ahead with all the data in mind, a SPCX stock crash seems likely in the short-term, but the August 4 earnings report could help improve market sentiment.
Featured image via Shutterstock
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All eyes have been on Space Exploration Technologies (SPCX +2.56%) over the past few months -- from the moment the company announced that it would go public at a trillion-dollar valuation to the stock's early and most recent trading. It's been a rollercoaster ride. SpaceX jumped more than 60% from its offer price of $135 to a high on June 16, then in recent days stumbled, even falling well below $135.
Investors have been enthusiastic about SpaceX's big goals and progress to get there, but at the same time, they've worried about the company's capital expenditures, which last year exceeded revenue and drove SpaceX to a net loss. We'll get a close look at the latest here when SpaceX reports earnings on Aug. 4. But Aug. 6 actually may be an even bigger day for the stock. In fact, my prediction is that it may be a decisive day for SpaceX. Let's find out why.
Image source: Getty Images.
SpaceX's growth businesses So, first, let's take a closer look at SpaceX to understand why the general investment community has been so interested in this particular stock. SpaceX operates in three growth areas that are particularly exciting: rocket launches, satellite-based internet services, and artificial intelligence (AI). These businesses each have the potential to change the way many things are done -- and generate tremendous growth for SpaceX and its shareholders.
SpaceX aims to drastically cut the costs of rocket launches and use its reusable rockets to further its businesses -- for example, these SpaceX rockets may transport equipment the AI unit needs to establish data centers in space (that's one of SpaceX's goals). All of this results in great efficiency for the company. SpaceX also has seen its internet service grow in leaps and bounds, with subscribers climbing from 2.3 million three years ago to more than 10 million this year.
But, as I mentioned earlier, to support the technology needed for these high-growth businesses, SpaceX must invest heavily. And so far, that's weighed on earnings. Investors are eagerly awaiting the Aug. 4 earnings report to monitor the spending situation and the pace of revenue growth. The report could trigger movement in the stock, of course, depending on whether investors are pleased or disappointed with SpaceX's progress.
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Early SpaceX investors My prediction, though, is that Aug. 6 actually will be the decisive day for the company, and here's why. It may offer us a clue about early SpaceX investors' thoughts. This is because, as of this day, the second full trading day after the company's earnings report, early SpaceX shareholders may sell as much as 20% of their holdings. This is as the first lockup date expires.
Why do IPO companies set up lockup periods? They're meant to favor stability. Even if an early investor truly believes in a company, that investor still might be tempted to sell a few shares on IPO day to lock in a profit. If every early investor did so, that could create downward pressure on the stock. So companies establish dates that allow these longtime investors to sell farther down the road.
In this case, SpaceX used a tiered approach, with several expiration dates. The first, as mentioned, happens on Aug. 6.
A warning sign? Does this mean that a flurry of selling on Aug. 6 should serve as a warning sign for investors? Not necessarily. Some investors, those who have backed SpaceX for quite some time, may decide to sell a few shares to benefit from their gains so far. They may be interested in reallocating the funds into a new growth opportunity, for example, or further diversifying their portfolios. So the movement isn't necessarily bad news for SpaceX.
Still, it's important to monitor the direction of the stock on Aug. 6 and the days to follow. A significant level of downward pressure could suggest that shareholders -- early as well as new -- are focusing more on SpaceX's risks and that may hurt the stock's performance in the weeks to come. That said, if the stock doesn't fall much around this lockup expiry, we may see this as a sign of confidence among early investors, as it shows they aim to hold onto every SpaceX share.
In any case, my prediction is that Aug. 6 will be decisive for SpaceX, setting the tone for the stock in the weeks to follow.
Since its initial public offering in June, Space Exploration Technologies (SPCX +2.56%) has arguably been the most widely discussed stock in the market.
The company saw its stock soar out of the gate but has since given back much of those gains, despite joining several prominent market indexes sooner than most post-IPO stocks. While there is seemingly never a dull moment at the company, investors should definitely mark their calendars for Aug. 4.
Here's why.
Image source: The Motley Fool.
Second-quarter earnings will be announced Aug. 4 SpaceX recently announced that it will release its second-quarter 2026 financial results on Aug. 4 after the market closes. Management, including SpaceX founder Elon Musk, will host a live conference call at 4:30 p.m. ET to discuss the results with Wall Street analysts. Earnings allow investors to review financial results over three months.
While SpaceX filed its registration statement earlier this year, providing a lot of information about the company, second-quarter results will present investors with new information that will better inform their view of the company and their opinion of the stock and its valuation.
It's also possible, although certainly not guaranteed, that SpaceX provides financial guidance, which would better inform analysts' financial models.
But for a company like SpaceX, which is a long-term bet on the space economy and artificial intelligence, insights from Musk on the conference call are likely to be just as, if not more important than, second-quarter financials.
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Investors will have many questions about initiatives like Starship, the company's fully reusable, heavy-lift rocket on which much of the SpaceX business model hinges.
I'm sure investors will also be curious about the company's data center deals announced earlier this year, its planned future Terafab facility to be run in partnership with Intel and Tesla, and how Grok Intelligence is advancing.
Starlink, the company's low earth orbit satellite internet service, which has thus far been its most profitable business, will also be top of mind.
Consensus estimates project revenue of around $6.87 billion for the quarter and a loss of $0.28 per share, according to Yahoo! Finance (as of July 22). In the first quarter of 2026, SpaceX generated revenue of nearly $4.7 billion and a loss of $1.27 per share.
During SpaceX's IPO roadshow, the Financial Times reported that investment bankers suggested total revenue at the company could surge from about $19 billion in 2025 to $474 billion by 2030.
So while investors aren't focused on one quarter, they will be looking for clues about medium-term growth.
A big tranche of the lock-up shares expires SpaceX's second-quarter earnings report will also trigger the release of a big tranche of shares subject to the company's lock-up policy.
Following most IPOs, company insiders and employees are prevented from selling their shares for a certain period to maintain stability in the stock when it first hits the market. SpaceX has a staggered lock-up policy, under which a certain number of insider shares are gradually made available for sale over the first six months following the IPO.
On the second full trading day following the release of the company's second-quarter earnings results, a fifth of insider shares will be eligible for sale. Interestingly, if the stock price is at least 30% above SpaceX's IPO price of $135, an additional 10% of insider shares will be eligible for sale.
As of July 21, SpaceX stock traded at roughly $123.50, so there's some ground to make up for insiders to unlock that additional 10%. This policy does not apply to Musk, who holds an extraordinary amount of the company's shares and can't sell any stock until at least one year after the IPO.
If insiders sell a large number of their shares, that could flood the market with supply and hurt the stock, even if earnings are perceived positively.
Ultimately, SpaceX's second-quarter earnings report has both mechanical and fundamental implications for the stock. It could very well be the biggest day for the company and stock since the IPO.
Space Exploration Technologies (SPCX +2.56%), or SpaceX, launched its IPO in June with high hopes. While it benefited from an initial bump, its fortunes quickly reversed, and shares now sell below its original IPO price.
A likely reason for the pullback was the valuation of the communication stock, which remains extremely elevated. This overvaluation is so extreme that Planet Labs (PL -1.06%), which SpaceX has so far outperformed, is likely to earn higher returns (or at least lower losses) for 2026. Here's why.
Image source: The Motley Fool.
The state of SpaceX and Planet Labs Aside from their involvement in space and satellites, SpaceX and Planet Labs are different companies. Planet Labs uses satellites to create high-resolution maps of the planet daily. In contrast, SpaceX launches rockets and operates a satellite-based internet service.
Admittedly, Planet Labs would likely not be possible without SpaceX, and its infrastructure makes it a larger company. Its $1.6 trillion market cap is far above Planet Labs' $8 billion.
PL data by YCharts
Valuations explain a surprising amount of that difference. As of the time of this writing, SpaceX trades at a price-to-sales (P/S) ratio of 84, far above Planet Labs's 22 sales multiple.
Both exceed the average P/S ratio of 3.7 for the S&P 500 (^GSPC -1.21%). However, analysts estimate that Planet Labs's revenue will grow at 42% in fiscal 2027, well above the 26% increase in fiscal 2026 (ended Jan. 31). Amid those increases, a sales multiple in the low 20s is not unusual.
In contrast, investors rarely encounter an 84 sales multiple, and one has to wonder whether Elon Musk's track record can justify that valuation. In 2025, SpaceX's revenue grew by 33% year over year, and the forecast of 109% revenue growth in 2026 is a significant increase that makes its valuation more understandable. Still, that also leaves enough potential downside that any hint of bad news could spark a huge sell-off in SpaceX stock.
Planet Labs is not immune to the effects of bad news. Nonetheless, it is in a stronger position to handle it, and that valuation leaves room for a higher multiple if the company exceeds expectations.
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SpaceX probably has further to fall Of the two stocks, SpaceX is the one most likely to suffer more over the course of the year.
Admittedly, Planet Labs' stock has kept going down and has declined more than SpaceX's since the SpaceX IPO. Moreover, neither stock is inexpensive, and it is quite possible that both finish 2026 in the red.
However, one has to question whether any company is worth buying at 84 times sales, a valuation where even an implication of bad news could lead to more selling.
Since a perfect performance is unlikely, investors should expect SpaceX stock to fall further in the near term. Conversely, with Planet Labs facing less pressure, it should either recover or keep its downside in check going forward.
Space Exploration Technologies (SPCX +2.56%) has been on quite a ride since its debut in the public markets in early June. Shares were originally priced at $135, then quickly rose to $225 before tumbling to around $123 as of July 22. For a long-term, fundamentals-focused investor, it's not the volatility that's keeping other investors and me away; it's still the inflated valuation.
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Even after more than $1 trillion was wiped from SpaceX's market cap, the company is still inflated at a $1.6 trillion valuation. With less than $19 billion in revenue, that's still close to 85 times sales. A nearly triple-digit multiple doesn't make sense given last year's 33% growth rate. Elon Musk's company is also spending a tremendous amount on capital expenditures, expected to reach $40 billion this year. SpaceX is nowhere near profitable.
Image source: The Motley Fool.
What the company could achieve with its Starlink and rocket business is truly inspiring and exciting. SpaceX acquired Anysphere, the parent company of Cursor, which should add significant revenue. That's a positive for investors, but I'd still like to see more organic growth than purchased growth over the next several quarters.
If SpaceX can show consistent growth and a path to profitability, eventually I'd be more ready to climb on board. However, I still don't feel comfortable buying a company that is years away from its revenue justifying its price.
Right now, the upside for retail investors looks farther away than a colony on Mars.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Space Exploration Technologies (SPCX +2.56%) has grand ambitions, including sending humans to Mars. This may require breakthroughs in space travel even more impressive than those the company has already achieved. It's not surprising, then, that Ark Investment Management -- a firm led by the famous investor Cathie Wood, a staunch believer in the power of innovation -- is doubling down on SpaceX stock. The space company is the fourth-largest holding across Ark Investment Management's combined portfolio, with the firm buying more shares as recently as July 22. However, I wouldn't follow in Wood's footsteps on this one. Here's why I am not ready to buy SpaceX stock yet.
Image source: Getty Images.
The price is not right First, let's give credit where credit is due. SpaceX has already revolutionized space travel and is currently a leader in providing orbital launch services to U.S. government agencies. The company is still making progress. SpaceX is developing a next-gen rocket, Starship, that could significantly reduce launch costs. SpaceX will make progress elsewhere thanks to Starship, including in its Starlink segment, where it provides internet services through a constellation of Low Earth Orbit satellites. Starship will help SpaceX launch substantially more satellites into orbit, thereby improving its services and expanding its addressable market.
SpaceX's artificial intelligence (AI) business also seems to be slowly taking off. The company has a deal in place to provide Alphabet (GOOG -6.89%) (GOOGL -7.12%) with compute capacity. SpaceX is also reportedly in talks to provide computing power to the U.S. Department of Defense in a potential multi-billion-dollar deal. Over the next few years, SpaceX could record growing revenue thanks to Starlink, which already boasts 10.3 million subscribers, a number that should keep growing at a good clip. We could also see revenue growth in its space and AI units ramping up.
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However, SpaceX likely won't be consistently profitable anytime soon. The company is investing heavily to tap into what it sees as transformational opportunities. That's especially true in its AI business, where it is spending more on capex than in its two other segments combined. Whether or not that's the right move, time will tell. But for a company worth $1.6 trillion, it's hard to justify a revenue of just $4.7 billion in the first quarter of 2026, which increased by just 15% year over year.
At its current valuation, SpaceX's revenue should either be much higher or should be growing much faster (or both). Note that the company's price-to-sales ratio is an incredible 78.09 as of this writing. That's far too high by any standard, particularly since the reasonably valued range typically starts below "2." All of this suggests the market is already factoring in SpaceX's success across its connectivity and, especially, its AI businesses, and the stock could decline over the next few years as it faces increased competition. That's why the company's shares aren't attractive right now. They'd have to drop significantly from current levels before becoming so.
Alphabet's Google (GOOG) said its investment portfolio now includes $94.1 billion in shares of SpaceX (SPCX), a space-and-AI company, following SpaceX's blockbu
In two weeks, on Aug. 4, Space Exploration Technologies (SPCX +2.56%) is scheduled to release its first quarterly earnings report after going public through an initial public offering (IPO) in June. Better known as SpaceX, the technology company that raised the most capital in an IPO in history, is now settling into the routine of a publicly traded company.
Here's my prediction for what happens to SpaceX after this quarterly earnings report, and why it will have little to no bearing on the stock over the next 10 years.
Image source: Getty Images.
SpaceX saw fast revenue growth, but more losses SpaceX is the leading private spaceflight company that is also trying to expand into an artificial intelligence (AI) giant. Heading into the IPO, its Starlink connectivity business was seeing the most growth, posting 50% year-over-year revenue growth in 2025. Investors should expect more of this stellar growth to continue in Q2 of 2026.
The company is working on massive new projects, including the Starship rocket, AI data centers, and orbital AI compute. Spending on these projects will likely keep the company in the red in the second quarter, just as it was in 2025, with operating earnings of negative $2.5 billion. SpaceX spent $21 billion on capital expenditures in 2025 while generating $18.7 billion in revenue, mainly from Starlink. This makes it one of the most aggressive spenders in the AI infrastructure boom.
Revenue will begin to show up from AI compute contracts with the likes of Alphabet, Anthropic, and others, but it will likely be many years -- if ever -- before these deals turn a profit for SpaceX.
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What matters over the next few quarters is different than what matters over the next decade Regardless of what SpaceX reports financially this quarter, there is only one thing that will drive the share price for the rest of 2026: the end of various lockup periods for insider shareholders. Of the 13 billion total shares outstanding in SpaceX, 4.6 billion are currently in a lockup period and cannot be traded. Twenty percent of these shares get unlocked two days after Q2 earnings, with many long-term investors likely looking to sell and return capital to investors who put money into SpaceX in its early days.
The rest of the float gets unlocked over the rest of 2026, excluding Elon Musk's shares. With a flood of selling pressure on the horizon, it is likely that SpaceX's stock price will fall over the rest of 2026. This does not change the fundamentals of the business, which depend on the commercial viability of Starship and AI data centers in orbit over the next decade, but it does mean a volatile post-IPO share price is more likely.
YieldMax has launched another single-stock option-income fund, this time built around one of the market’s most-watched newcomers: SpaceX. The YieldMax® SPCX Option Income Strategy ETF (NYSEARCA:YSPC) began trading on NYSE Arca in mid-July 2026, with a prospectus dated July 12, 2026. It is issued through Tidal Trust II, with Tidal Investments LLC serving as adviser, and joins YieldMax’s growing lineup of income ETFs tied to a single underlying stock.
The fund carries an expense ratio of 1.01%, gross and net, which works out to about $101 a year on a $10,000 investment. That fee is in line with other YieldMax single-stock income funds and well above what a plain index ETF charges. According to the prospectus, YSPC’s primary objective is current income, and its secondary objective is exposure to Space Exploration Technologies Corporation Class A common stock (SPCX), subject to a limit on the fund’s participation in gains.
What the Fund Does YSPC is an actively managed ETF, meaning a portfolio team picks and adjusts the holdings rather than tracking an index. The strategy itself is an options overlay. Rather than owning SpaceX shares outright, the fund uses options contracts on SPCX to generate income while getting synthetic exposure to the stock’s price. Under its prospectus, the fund commits to investing at least 80% of net assets, plus borrowings, in securities and financial instruments that provide indirect exposure to SPCX, with the notional value of options contracts counting toward that test.
Notional value is worth pausing on. It refers to the full face value of a position rather than the capital actually committed. That is how a fund can reference a large amount of stock exposure while posting only a fraction of that amount as collateral. In practice, YieldMax funds typically sell call options against their synthetic long positions. The premiums collected become the income the fund distributes. The trade-off: if SpaceX shares rally hard, the fund’s upside is capped by those sold calls, while the downside if SpaceX falls is largely intact.
Why It Exists and How It Stacks Up YieldMax built its brand on funds tied to Tesla, NVIDIA, MicroStrategy, and Coinbase, all of which apply the same synthetic-covered-call template to a volatile single stock. SpaceX, freshly public with a market capitalization of roughly $928.7 billion and a business spanning launch, Starlink satellite broadband, and (after the early-2026 xAI acquisition) artificial intelligence, is a natural fit for that playbook.
YSPC is the first ETF built specifically to sell options on SPCX for income. Direct competitors do not yet exist, though the broader category of single-stock covered-call ETFs from issuers such as Kurv and Roundhill charges fees in a similar range. Investors comparing YSPC against simply owning SPCX shares should note that SpaceX itself pays no dividend, so any yield from YSPC comes entirely from the options strategy, not from the underlying company.
Who It Might Suit, and the Risks The fund is designed for investors who want cash distributions tied to a highly volatile stock and are willing to give up part of the upside to get them. The prospectus notes distributions are generally taxable as ordinary income, qualified dividend income, or capital gains, which is worth understanding before holding it in a taxable account.
The risks are meaningful. YSPC has no track record: the fund has not yet paid a distribution, so the actual yield is unknown. In its first five trading days, shares moved from $49.96 on July 15 to $46.16 on July 21, a decline of 7.61%, and closed at $46.06 on July 21. SPCX itself has been rough lately, down 33.22% over the past month from a start price of $185 on June 18 to $123.54 on July 21. Because the option strategy caps gains but not losses, a sustained drawdown in SPCX can erode the fund’s net asset value even while distributions are being paid, meaning yield can effectively come out of principal.
New ETFs also tend to launch with small assets and wider bid-ask spreads, and funds that fail to gather assets sometimes close. The fund’s total net assets were not disclosed in the prospectus.
What to watch from here: the size and frequency of YSPC’s first distributions, how much of its NAV holds up during SpaceX’s volatile early trading life, and whether assets under management build enough to keep the fund viable through its first year.
Contact [email protected] for any questions or corrections.
Space Exploration Technologies (SPCX +2.56%) officially joined the Nasdaq-100 on July 7. The megacap growth stock was fast-tracked into the index less than a month after its June 12 initial public offering.
However, the percentage of shares available for public trading -- known as the float -- is roughly 5% of SpaceX's market cap. That number will increase as shares are gradually unlocked beginning Aug. 6. Until then, SpaceX's Nasdaq-100 weighting is around four or five times its float rather than its market cap.
So instead of being over 4% of the Nasdaq-100 and Nasdaq-100-based exchange-traded funds (ETFs) like the Invesco QQQ Trust (QQQ -1.90%), SpaceX is 1.1% for the time being -- making it the 22nd largest holding in the ETF.
Image source: Getty Images.
Investment management firm Vanguard just updated its holdings across dozens of its ETFs. As of June 30, the data shows that multiple Vanguard ETFs bought SpaceX in June, including the Vanguard Total Stock Market ETF (VTI -1.13%), the Vanguard Growth ETF (VUG -2.19%), the Vanguard Mega Cap Growth ETF (MGK -2.42%), and the Vanguard Communication Services ETF (VOX -3.52%). But only one Vanguard ETF has a higher weighting in SpaceX than the Nasdaq-100.
SpaceX will anchor the Vanguard Communication Services ETF Vanguard has low-cost ETFs for each of the 11 stock market sectors. In June, I correctly predicted that Vanguard would add SpaceX to its communication sector ETF rather than industrials or technology because most of SpaceX's revenue and near-term growth are driven by its Starlink network of low-earth orbit satellites and because SpaceX owns the social media platform X (formerly Twitter).
That prediction came true when Vanguard updated the holdings of its Communication Services ETF, and SpaceX already jumped to the 13th-largest holding at 2.4%. That's significantly higher than the less than 0.5% weighting in the three Vanguard ETFs mentioned earlier.
Investors can expect SpaceX's weighting in the communications sector to grow as more shares are unlocked and traded on the Nasdaq. When SpaceX is eventually weighted by market cap, it will likely rank as the third-largest holding behind Alphabet and Meta Platforms. But it could even be the second-largest holding if it overtakes Meta Platforms in market cap again.
NYSEMKT: VOXVanguard World Fund - Vanguard Communication Services ETF
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Sector ETF concentration is a bonus With a mere 0.09% expense ratio, the Vanguard Communication Services ETF is one of the best ETFs to buy for investors looking for a low-cost option that will make SpaceX a top holding. Whereas funds based on the Nasdaq-100 include stocks from all sectors, sector-based ETFs give added weight to industry leaders because there are fewer components. This structure allows Amazon and Tesla to dominate the consumer discretionary sector, ExxonMobil and Chevron to lead the energy sector, and so on.
SpaceX's entry into the communications sector puts it in the big three alongside Alphabet and Meta Platforms. Once SpaceX's lockup period fully ends in early December, investors can expect close to 60% of the ETF to be invested in these three stocks.
Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Chevron, Meta Platforms, Tesla, and Vanguard Growth ETF. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
When Space Exploration Technologies (SPCX +1.73%), also known as SpaceX, went public on June 12, only about 4.9% of its 13.2 billion shares were put up for sale, an unusually small public float.
But that percentage is set to more than double in August as many owners of pre-IPO shares will be partially released from the standard lock-up agreements.
This week, the space exploration, satellite, and artificial intelligence firm headed by Elon Musk announced that it will deliver its first earnings report as a public company on Aug. 4. As per the rules set out in the company's prospectus, two trading days later, pre-IPO shareholders will be able to sell some 911 million of their locked-up shares, bringing the float to about 12%. Even more shares will be released if the stock trades at 30% above its IPO price on five of the 10 trading days prior to the earnings release.
Image source: Getty Images.
Essentially, the 180-day lock-up agreement expires in tranches, with more shares set to be released in September, November, and December. Elon Musk and some other significant investors are subject to a one-year lock-up. Musk owns around 40% of SpaceX shares, though he controls more than 80% of the company's voting power through a dual-class share structure.
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And as SpaceX employees begin to liquidate their holdings to diversify out of the company's stock -- a normal occurrence after companies go public -- that selling could put downward pressure on the share price.
So, should you pick up a few SpaceX shares?
Well, that's a tricky question. After an initial bump in the first few days after the IPO, when investors bid the stock above $225, it has since retreated and now trades at around $121 a share, well below the $135 IPO price. Such price movement in an IPO stock is not unusual, but given that SpaceX is not yet profitable, it may take investors a while to regain their initial enthusiasm.
Matthew Benjamin has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
HomeIndustriesTech StocksTech StocksEarnings quadrupled on paper, but an analyst calls that an ‘illusory’ performance propped up by unrealized gains from equity investmentsJuly 23, 2026, 10:28 a.m. ET
Alphabet was once a cash-flow machine, but it’s seeing a fall from grace.
The company just reported its first-ever quarter of negative free cash flow on the heels of an unrelenting artificial-intelligence spending spree. It’s become the subject of fierce debate on Wall Street, especially since Alphabet GOOG GOOGL also lifted its capital-expenditure forecast for the year, leaving room for that spending to surpass $200 billion.
SpaceX SPCX shares fell more than 3% on Thursday as investors awaited the company's delayed Starship test flight, a mission widely viewed as a key catalyst for the newly public space and artificial intelligence company.
The stock traded around $111.35 in early trading after tumbling 6.7% on Wednesday, extending a volatile stretch following its record-setting initial public offering.
Broader markets were also weaker, with futures tied to the S&P 500 and Dow Jones Industrial Average down 1.2% and 1.1%, respectively.
Investor attention is centered on SpaceX's 13th Starship test flight, scheduled to lift off from Texas later today.
The launch was originally planned for July 16 but was postponed for a week because of an engine issue.
The mission is expected to be closely watched by investors looking for evidence that the company can continue advancing its launch capabilities as it seeks to justify its premium valuation.
Shares have struggled since their initial surge following the IPO, with valuation concerns weighing on sentiment.
According to the information provided, SpaceX trades at roughly 40 times estimated 2026 sales, a multiple that investors have questioned given the company's size and current financial profile.
Bearish investors have continued to add to their positions as the stock declined below its IPO price.
According to Reuters, citing Ortex Technologies data through Tuesday, short sellers are sitting on an estimated $15.5 billion in paper profits since SpaceX's mid-June listing.
The stock has fallen below its $135 IPO price after reaching a post-listing high of $225.64 and dropped to a record low of $115.26 on Wednesday.
"There is no sign of short sellers taking profits on SpaceX," Ortex co-founder Peter Hillerberg told Reuters.
"If anything they are leaning in harder," Hillerberg added.
According to Ortex, approximately 360 million SpaceX shares, representing about 56% of the free float, were on loan through Tuesday, indicating sustained bearish positioning.
Chief Executive Elon Musk responded earlier this week with a warning aimed at investors betting against the company.
“Survival probability of firms who maintain significant short position in SPCX over time is very low,” Musk wrote in a post on X.
Analysts remain constructiveDespite the recent share price weakness, Wall Street analysts continue to maintain a largely positive outlook on SpaceX.
According to LSEG data, 27 of the 32 analysts covering the stock recommend buying it, while four have Hold-equivalent ratings and one recommends selling.
Supportive analysts argue that the company's Starlink satellite internet business, government launch operations, and Musk's history of attracting investor interest justify a valuation premium despite SpaceX reporting a net loss of nearly $5 billion last year.
Analysts have also identified Thursday's Starship test flight as a potential catalyst, with investors expected to assess the company's execution in its launch business ahead of its upcoming earnings report and the continued expansion of its public float.
SPCX stock is moving. See the chart and price action here. Alphabet’s AI Spend WarningStill, Alphabet shares dropped after AI capex overwhelmed the company’s operating cash flow.
Alphabet spent $44.9 billion on capital projects during the quarter. Operating cash flow reached $39.1 billion, leaving the company with negative free cash flow of $5.9 billion. It marked Alphabet’s first negative free-cash-flow quarter since its 2004 initial public offering.
Microsoft Corp. (NASDAQ:MSFT) is tracking toward roughly $190 billion in calendar-year AI spending, and combined hyperscaler capex could approach $725 billion this year.
SpaceX’s Capex ChallengeThose figures illustrate the scale of SpaceX’s challenge.
SpaceX inherited an expensive AI operation through its combination with xAI. Training advanced models requires chips, data centers, networking equipment and enormous amounts of electricity. The costs arrive before AI contracts produce dependable returns.
SpaceX has begun monetizing its AI infrastructure. Reflection AI agreed to purchase computing capacity from SpaceXAI, and Google also signed a multiyear computing agreement with the company.
Yet Alphabet’s quarter shows why revenue growth may not settle the debate. Investors increasingly want proof that AI spending can produce cash, margins and sustainable returns.
Rocket development offers visible milestones while AI infrastructure provides fewer clear checkpoints.
For SpaceX stock, Starship’s progress remains important, but the larger valuation test may be whether SpaceX can avoid the cash-flow pressure now hitting the world’s richest tech companies.
SPCX Stock Price Activity: SpaceX shares were down 0.75% at $114.40 at the time of publication Thursday, according to Benzinga Pro data.
Photo: JRdes / Shutterstock
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The SpaceX logo in this illustration taken June 11, 2026. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights, opens new tab
NEW YORK, July 23 (Reuters) - Short sellers targeting SpaceX (SPCX.O), opens new tab shares are sitting on an estimated $15.5 billion in paper profit since the rockets-to-AI firm's mid-June initial public offering, as its stock slipped below the IPO price, according to data through Tuesday from analytics firm Ortex Technologies.
Short sellers aim to sell borrowed shares to buy them back at a profit.
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Reporting by Saqib Iqbal Ahmed, Editing by Louise Heavens
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After its initial strong rally that took the equity to its all-time high of $225.64, SpaceX (NASDAQ: SPCX) stock entered a downturn that saw it crash below the initial public offering (IPO) price of $135 and to $115.26 at the latest close.
SpaceX stock price chart. Source: Google Overall, SPCX shares’ performance ensured that the company lost $250 billion from its IPO valuation, with the rising downward momentum apparently threatening a fall below $100.
Notably, the move appears in line with an assessment published by Morningstar shortly before SpaceX stock trading started and which foresaw the equity’s fair value at approximately $70.
How SpaceX stock compares to other trillion-dollar companies Additionally, the recent downturn appears consistent with the warning issued by multiple analysts and commentators that noted the severe discrepancy between the $1.77 trillion IPO market capitalization – comparable to Broadcom (NASDAQ: AVGO) and Saudi Aramco – and the firm’s revenue and losses in the first quarter (Q1) of 2026.
Specifically, the semiconductor company reported revenue of over $19 billion in Q1, while SpaceX was below $5 billion.
Similarly, the international oil giant’s net income for the three months stood above $33 billion, while Elon Musk’s newer public company recorded an operating loss of nearly $2 billion.
What is next for SpaceX stock price? Looking ahead, there appears to be relatively little to stop SPCX stock’s crash in the short-term.
Specifically, the equity’s float remains exceptionally low relative to a standard IPO, all insiders remain barred from selling, and the July 7 inclusion into the Nasdaq-100 benchmark index seemingly failed to generate significant buying pressure.
The final point might be a particularly strong signal that shares of SPCX are indeed headed below $100, considering the fast-track addition was widely expected to lead to widespread automatic purchasing by index funds.
Overall, Palantir (NASDAQ: PLTR) stock serves as a strong example of an equity’s trajectory after joining a benchmark, as it soared roughly 30% in its first month within the S&P500 and about 400% in its first year.
Still, one possible opportunity for a reversal could come with the August 4 earnings report, provided it beats analyst forecasts sufficiently – a plausible outcome given the company’s recent business transformation and compute agreements with Google (NASDAQ: GOOGL) and Anthropic.
Simultaneously, investors should be wary of the filing as, despite the $1.25 billion monthly deal with the world’s other most recognizable artificial intelligence company, revenue will be constrained by a discount for the initial quarter disclosed at the same time as the partnership.
SpaceX stock long-term price analysis Looking further into the future, the performance of SpaceX stock does not become easier to forecast. On the one hand, the balance between revenue, profitability, and valuation remains a major concern and appears to largely back Morningstar’s comparatively bearish forecast.
On the other hand, much of SPCX’s initial share price and market capitalization was backed by projections for future revenue, which, in some estimates, amount to more than $1 trillion by 2030 – for more than a two-hundredfold increase from Q1, 2026 – and an overall total addressable market greater than $20 trillion disclosed in the S-1.
Wall Street certainly appears convinced in the growth story, given that SpaceX equity retains an overall ‘Strong Buy’ rating and an average 12-month price target of $243.81 for a 111.53% rally from the latest close.
Wall Street sets SpaceX stock price for the next 12 months. Source: TipRanks Furthermore, the strength of the bullish consensus is further demonstrated by the fact that, despite the severe correction, SPCX shares boast 23 positive, 5 ‘Neutral,’ and only a single ‘Sell’ recommendation on the stock analysis platform TipRanks, per the data Finbold retrieved on July 23.
Item 1 of 2 The silhouette of Elon Musk and SpaceX logo are seen in this illustration created on June 11, 2026. REUTERS/Dado Ruvic/Illustration/File Photo
[1/2]The silhouette of Elon Musk and SpaceX logo are seen in this illustration created on June 11, 2026. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights, opens new tab
SummaryCompaniesSpaceX shares fell to a record low of $115.26 on WednesdayAbout 360 million SPCX shares, or 56% of free float, were out on loan, Ortex data showedShort sellers showed little sign of pulling back on bearish betsNEW YORK, July 23 (Reuters) - Short sellers targeting SpaceX (SPCX.O), opens new tab shares are sitting on an estimated $15.5 billion in paper profit since the rockets-to-AI firm's mid-June initial public offering, as its stock slipped below the IPO price, according to data through Tuesday from analytics firm Ortex Technologies.
Short sellers, who borrow shares to sell them and later buy them back at a lower price for a profit, have pressed their bearish bets on SpaceX as the company's shares slipped below its IPO price of $135 from a post-IPO high of $225.64.
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SpaceX shares have been volatile, experiencing brief bouts of strength before slipping further. On Wednesday, the stock dropped to a new low of $115.26.
"There is no sign of short sellers taking profits on SpaceX," Ortex co-founder Peter Hillerberg said.
"If anything they are leaning in harder," Hillerberg said.
About 360 million SpaceX shares, about 56% of the free float, were out on loan, Ortex data through Tuesday showed.
SpaceX did not immediately respond to a request for comment.
"The survival probability of firms who maintain a significant short position in SpaceX over time is very low," SpaceX CEO Elon Musk wrote in a post on X on Friday.
SpaceX's lofty valuation makes it a target for short sellers skeptical of its rich price tag, but strong retail and institutional interest as well as Musk's history of public battles against short sellers make bearish bets against the company a risky proposition.
The weakness in SpaceX shares reflects in part investor concern over debt-funded AI spending. Tesla, another Musk company, reported negative free cash flow in the second quarter for the first time in more than two years as the EV maker accelerated spending on AI infrastructure, battery capacity, robotaxis and next-generation manufacturing.
Reporting by Saqib Iqbal Ahmed, Editing by Louise Heavens
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Shares of Elon Musk’s space empire, Space Exploration Technologies (NASDAQ:SPCX | SPCX Price Prediction), have been in free fall in recent weeks, recently falling to $115 and change, close to $20 off the IPO price. Of course, most new investors who couldn’t participate in the IPO had to pay closer to $160 per share on the first day of public trade. Either way, it didn’t take long for investors to grow fearful shortly after the euphoric initial rise that helped Elon Musk temporarily become the world’s first trillionaire.
The hype has died down; the shorts have arrived, the float is rising, and there’s growing concern about the firm’s unprofitability. As I noted in prior pieces, AI-related CapEx, which has been worrisome for hyperscalers, would soon rattle SpaceX shareholders. Of course, advancing the Starship program doesn’t come cheap, either.
Heavy spend is never fun, but it’s very much necessary While it seems like an uneasy time to be in SpaceX amid heavy spending as it builds data centers on Earth and in orbit, I do think that the pieces will gradually fall into place.
Like it or not, SpaceX is moving at a ridiculous pace, and investors might not yet be prepared for the rise in spend that accompanies it. And while it’s necessary to get that chokehold on cloud infrastructure beyond the clouds, it takes mouth-watering sums of investment to build the rails that take us to new frontiers.
The big question is whether the big payoff is shortly after the final track is nailed down or if it’ll flow in steadily over a more extended period of time. That’s the main question mark that makes it so hard to value SpaceX. It did take quite a while for sell-side analysts to do their homework and come up with a recommendation and price target.
With SpaceX reportedly in talks with the Pentagon to supply data center capacity (on the ground), it certainly feels like SpaceX has a huge advantage when it comes to terrestrial compute and a big, satisfied customer in place once orbital compute eventually comes online.
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Once Starship gets going, the sky is the limit In my view, SpaceX is locking in that chokehold on extraterrestrial compute. It has the transport monopoly in Starship to get assets out there (it’s like the railway to space, so to speak). And while the latest launch delay is a red flag for some, I viewed it as nothing more than a shakeout of some of the stock’s more weak-handed holders.
Starship needs to do that heavy lifting, and there’s not much room for failure. If the reusable rocket doesn’t go well, so much for the ambitious space endeavors. With such a valuable payload (GPUs, solar panels, and all the sort), any slight fumble could have disastrous consequences for the stock, which still looks expensive despite shedding nearly half of its value from the peak hit in June.
As Starship starts hauling, the real chokehold, I think, lies in the design of SpaceX’s orbital data center. If it stays cool and powered, the proof of concept will be in the books, and SpaceX will be ready to scale, likely faster than hyperscalers, including those with space ambitions, know how to react.
Indeed, SpaceX has moved at light speed with terrestrial data centers (think Colossus). And there’s no reason to think the firm can’t do the same with orbital data centers once it shows off a concept that actually works. If all goes according to plan, perhaps SpaceX will have monetized Starmind before its rivals get anything off the ground without its help.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and SpaceX didn't make the cut. Grab the names FREE today.
Space Exploration Technologies (SPCX -1.08%) had to abort its 13th Starship test flight after some of its engines failed to ignite. Starship is SpaceX's fully reusable super-heavy-lift vehicle, and once it's ready to operate commercially, it could significantly reduce the cost of putting payloads into space, such as Starlink satellites or orbital data center satellites. Getting it off the ground (pun intended) will be key to the company achieving revenue growth and earnings that meet the market's high expectations.
SpaceX will have another go at the Starship test launch, and many more tests and launches will come over the next few years. A single aborted launch does not significantly impact the company's long-term viability.
The bigger risk to SpaceX and its investors involves what will happen if it successfully brings Starship into service: The company will need to raise massive amounts of capital over the better part of the next decade, even based on some of the most bullish outlooks for the business.
Image source: Getty Images.
This SpaceX bull just highlighted a major risk to the stock Morgan Stanley analysts have put a $300 price target on SpaceX stock. They cite its "near-monopoly launch economics," which will enable its satellite connectivity and AI businesses to scale up at a cost advantage.
Indeed, SpaceX can already launch its low earth orbit satellites for Starlink at a lower cost than any rival. And its technology also enables it to launch rockets at a higher cadence than anyone else. It can build faster and cheaper than anyone in the rocket launch industry.
But SpaceX is competing with terrestrial telecom companies and data centers. That's why Starship, which can carry much larger payloads and can be rebuilt and relaunched faster than SpaceX's current Falcon rockets, will be essential to scaling the business further.
Morgan Stanley sees Starship opening the door to serious revenue growth, but it will also require substantial capital to scale that business to the levels its analysts estimate. In fact, the analysts don't expect SpaceX to produce positive free cash flow until 2035. They estimate the company's average cash burn at $84 billion per year between 2027 and 2034, with capital expenditures peaking in 2031 at $300 billion.
In other words, SpaceX will need to raise about $700 billion in additional capital. "If debt markets cannot absorb this financing need, SpaceX may need to issue equity, reduce growth investment, or slow deployment," lead analyst Adam Jonas wrote in his note to investors.
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Importantly, SpaceX isn't the only tech company with significant financial demands. We've seen the major hyperscalers issue both debt and equity this year to raise cash to fund their AI data center build-outs. Meanwhile, the Federal Reserve is considering raising interest rates this year due to elevated inflation.
As a result, the cost of capital is rising. That could mean SpaceX will have to pay higher interest rates on whatever bonds it issues. Or, if the bond market cannot absorb another $700 billion of SpaceX's debt, its stock price will likely decline as it dilutes shareholders by raising funds via new equity issues.
The other option would be for SpaceX to raise less capital and slow its Starship, Starlink, and orbital data center build-outs. But that will lead to slower growth and, subsequently, a lower stock price.
SpaceX's capital requirements are a huge overhang on the stock, no matter how it raises that cash. Investors need to be aware of that risk, even if they're bullish on the technology.
“I’m still short puts in there and the puts haven’t gone anywhere,” Sosnoff said, noting that though SpaceX stock has fallen, the price of his puts has remained the same.
SpaceX Faces Historical IPO ChallengesAdding to the tension, Elon Musk has issued a warning to short-sellers betting against SpaceX. Musk’s recent comments suggest that those maintaining significant short positions in SpaceX may face challenges, drawing parallels to his past confrontations with Tesla short-sellers.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Veteran economist Peter Schiff has warned that the sharp decline in SpaceX (NASDAQ: SPCX) stock could be a warning sign for other high-cap assets that have benefited from investor enthusiasm.
In a July 22 post on X, Schiff highlighted that SpaceX last closed just above $115 per share, nearly 20% below its $135 IPO price and almost 50% below its post-listing peak of $225.
The stock’s reversal, he argued, could represent a broader shift in sentiment toward “overhyped” assets. Interestingly, the economist mentioned not only equities but cryptocurrencies too, which have really struggled this year.
“SPCX closed just above $115, nearly 20% below its IPO price and almost 50% below its high. This could be a harbinger of things to come for other overhyped stocks and cryptos. Look out below!” Schiff wrote.
$SPCX closed just above $115, nearly 20% below its IPO price and almost 50% below its high. This could be a harbinger of things to come for other overhyped stocks and cryptos. Look out below!
— Peter Schiff (@PeterSchiff) July 22, 2026 SpaceX stock price could serve as a market benchmark Trading at $115, the space exploration company is down 6.7% on the daily chart as of press time, July 23.
SpaceX stock daily price. Source: Google Finance
The decline has come amid concerns over lofty valuations, broader weakness in technology stocks, and potential future selling pressure as additional shares become available following lockup restrictions.
Known for his skepticism regarding speculative investments of all sorts, the analyst has repeatedly argued that markets may be pricing in overly optimistic expectations around artificial intelligence (AI), digital assets, and high-growth companies.
Notably, Schiff had issued a similar warning just a couple of days prior, claiming that the AI stock rally may be nearing a major reversal, pointing to the recent decline in SpaceX shares as a possible warning signal.
However, it must be noted that Schiff does not believe artificial intelligence itself is a bubble. Rather, he argues that investor enthusiasm surrounding AI-related stocks has likely become excessive.
“AI isn’t a bubble, but AI stocks are. The bubble has likely already popped,” Schiff wrote.
Similarly, he also pointed to increasing competition in the sector, particularly from lower-cost Chinese AI models such as Moonshot AI’s Kimi K3 and DeepSeek Chat. More precisely, he argued that U.S. AI companies could face pressure as investors reassess valuations and the long-term competitive landscape.
Featured image via Shutterstock
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Space Exploration Technology (SPCX -6.70%) stock closed below $120 on July 20, representing a decline of 25.5% since its first day of trading to the public on June 12. No single issue sent the price lower; it's likely a mix of factors that contributed to the stock price drop.
That said, the sell-off could create a favorable risk-to-reward setup, depending on where analysts see SpaceX stock trading over the next 12 months. But first, let's do a quick dive into that collection of potential reasons why the SpaceX stock price has fallen recently.
Image source: The Motley Fool.
The SpaceX decline There are several possible reasons investors have sold their SpaceX stock. One simple explanation is that the initial public offering hype cooled. For investors who bought on hype alone, they may have been inclined to sell after SpaceX hit a 52-week high of $225.64 but then started to trade lower.
Another reason could be concern that an upcoming lockup period was expiring. The next one occurs just before SpaceX reports its 2026 second-quarter earnings in August. The overall lockup period structure for SpaceX is staggered to prevent additional shares from flooding the market at once. But some investors may anticipate that insider selling could still lead to a larger stock price decline.
SpaceX also delayed the launch of its Starship rocket on July 16, which initially sent the stock lower in extended trading. And more broadly, some investors may just be worried about the recent sell-off around companies with ties to artificial intelligence (AI). Again, there's not one particular issue that explains all the selling pressure.
The next 12 months could look better for SpaceX SpaceX faces many challenges as it builds out AI infrastructure in space. It's not a profitable company, and its capital expenditures keep climbing. With that in mind, if SpaceX does become a leader in AI and builds what becomes the new normal of AI infrastructure through space-based data centers, the rewards could be meaningful.
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While the stock struggles, analysts remain relatively bullish on SpaceX over the next year. Of the 36 analysts tracked by CNN, the median price target is $225 a share. From the July 20 closing price of $119.85, that would be a return of more than 87% in a year.
That said, there's no guarantee that the median price target will be reached. But what that does offer is a chance for investors to judge whether they think the potential to reach $225 is worth the risk and whether they'd be comfortable holding shares for longer if it takes more than a year to reach that median price target.
Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
In June, the initial public offering (IPO) of Space Exploration Technologies (SPCX -6.66%) turned what seemed like a simple IPO into a reminder of how rule changes can reshape your portfolio. If you own an index fund, your portfolio may have been affected by new rules surrounding the IPO, even if you don't own SpaceX.
It all depends on which index funds you hold.
Image source: Getty Images.
What happened Whenever a company is added to a major index, every fund that tracks that index must buy it to stay in line with the benchmark, regardless of price. And that's precisely what happened as the Nasdaq-100 and Russell 1000 each changed their rules to fast-track the inclusion of SpaceX and other major IPOs that are expected this year.
S&P Dow Jones Indices, which maintains the S&P 500, chose not to change its rules, but index funds that follow the Nasdaq-100 and Russell 1000 had to make room for SpaceX by selling a sliver of every existing security or asset. As fund managers worked to remain aligned with their indexes, giants like Apple, Microsoft, and Nvidia were trimmed. The results have been subtle but represent a very real shift in the risk and sector weights for millions of investors' portfolios.
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The way both Nasdaq and Russell changed their rules to allow the mega IPO to enter sooner than usual -- rather than wait months or years for inclusion -- is what makes this moment stand out. The move concentrates a bundle of forced buying into a short window, quickly turning passive strategies into an active bet on a single, high-profile listing.
The potential implications SpaceX's share price to date has been volatile, but that doesn't mean losses are inevitable. The fact that some of the world's largest financial firms and venture capitalists are betting on it may enhance the company's resilience to economic downturns and market fluctuations, making it a stable investment with plenty of room to grow. In other words, those who own an index fund or ETF that includes SpaceX could see their portfolios grow enough to more than offset the trimming of other market giants.
S&P's decision not to change its rules could lead to missed gains if SpaceX appreciates dramatically. On the other hand, it might just protect them from loss. Only time will tell.
In the meantime, SpaceX's debut serves as a reminder that high-profile IPOs don't just affect the new stock. They also alter every portfolio holding an index that welcomes them.
Dana George has positions in Apple. The Motley Fool has positions in and recommends Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
Space Exploration Technologies (SPCX -6.70%) has officially announced Aug. 4 as the date of its highly anticipated earnings release for the quarter ended June 30. The earnings release and earnings call with Wall Street analysts will provide an updated look at where SpaceX is and where the company could be headed.
Here's why investors should also pay close attention to Aug. 6, and what the date could mean for SpaceX stock.
Image source: Getty Images.
Public markets have only gotten a taste of SpaceX SpaceX went public on June 12, raising $75 billion by selling 555 million shares at $135 per share and then another $10.7 billion from underwriters exercising options to buy additional shares. But with SpaceX's market cap at $1.58 trillion at the time of this writing, that leaves the vast majority of shares owned by insiders through restricted stock units and early release eligible shares.
That means that the supply of shares potentially hitting public markets will be far higher than the shares currently available, which will test SpaceX's already beaten-down stock price.
At $119.85 as of market close on July 20, SpaceX is down 47% from its intraday high and 11.2% from its initial public offering (IPO) price.
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Open the floodgates In SpaceX's May 20 Form S-1 filing with the Securities and Exchange Commission, SpaceX outlines its unusual schedule for unlocking restricted shares at a far faster rate than the typical 180-day period for IPOs. The first wave of early release eligible shares will be made available for sale "on or after the second full trading day on Nasdaq immediately following the public release of our quarterly financial results for the quarter ended June 30, 2026." With the earnings call confirmed for Aug. 4 after market close at 4:30 p.m. ET, that makes Aug. 6 the first time since SpaceX's IPO when holders of early-release-eligible shares may choose to sell a portion of those shares on the Nasdaq.
An additional 10% of early release eligible shares may be transferred if SpaceX is above $175.50 per share for five of the 10 trading days leading up to and including Aug. 4. However, that is highly unlikely to happen considering that count down began on July 21, and SpaceX remains down over 30% from that price it needs to average over the next couple of weeks to trigger the extra release of shares.
Another 7% of shares will be unlocked on each of the following dates -- Aug. 31, Sept. 10, Sept. 25, Oct. 10, and Oct. 25. Another 28% of shares will be released two days after the quarter ended Sept. 30 earnings, before all shares are unlocked on Dec. 9.
A critical moment for SpaceX stock SpaceX's earnings report, combined with more shares hitting public markets, will be the ultimate stress test for the growth stock. Especially if insiders decide to sell shares with SpaceX below its IPO price.
This is an incredibly exciting company for its technological prowess, lack of competition, and virtually infinite total addressable market. But I still think it's best if investors keep SpaceX on a watch list to see how the insider lock-up expiration unfolds, and for SpaceX to begin generating positive free cash flow so it doesn't have to continue relying on capital markets to raise money.
It's been over a month since the Space Exploration Technologies (SPCX -6.70%) IPO, and the shine may be starting to come off.
SpaceX stock sank below its $135 IPO price for the first time on July 15, and today, it hit an all-time low, closing down 6.7% at $115.26 on a broader sell-off in the software sector.
Wall Street, which lined up behind the stock to push the IPO in unprecedented fashion, has released a bullish set of price targets, following the end of the stock's quiet period.
Of the 13 analysts covering the stock, the lowest price target belongs to Needham at $200, implying a roughly 70% gain in the stock over the next year.
The average price target on the stock is $278, implying the stock will more than double over the next year, reaching a valuation of more than $3.5 trillion, and the Street-high target is Raymond James' $800, which would make SpaceX easily the most valuable company in the world at a valuation above $8 trillion.
Image source: Getty Images.
A dose of reality One analyst, who gave a buy recommendation on the stock, shared one comment that shows SpaceX investors will need an extraordinary amount of patience for the stock to pay off.
Citing the company's funding risk, a Morgan Stanley analyst said, "We forecast no free cash flow-positive year before 2035 and average external capital needs of roughly $84 billion per year from 2027 to 2034. If debt markets cannot absorb this financing need, SpaceX may need to issue equity, reduce growth investment, or slow deployment."
Assuming this is a base-case scenario, this analyst sees no positive cash flow from the company for nearly a decade. In itself, that's not entirely remarkable. Amazon founder Jeff Bezos ran that company with a famously long-term mentality, and didn't generate positive free cash flow until 2003. Bringing in more than $1 billion in free cash flow annually took the company until 2007.
However, Amazon was a much different company from SpaceX shortly after its IPO. First, it went public less than three years after it was founded, while SpaceX waited 24 years. Amazon was also growing much faster at that stage, putting up triple-digit growth before the dot-com bust. SpaceX, on the other hand, reported just 15% revenue growth in its first quarter.
In other words, SpaceX is at a much different stage of its life cycle than Amazon was, even though it still has bold ambitions, including in AI, launching orbital data centers, and eventually colonizing Mars.
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What it means for SpaceX investors Unlike Amazon in its early days, SpaceX is not cheap by any conventional metric, and its valuation already makes it one of the most valuable companies in the world, leaving it with much less upside than Amazon had when it went public. Morgan Stanley's prediction also shows how much risk is involved in a SpaceX investment.
Using the conventional discounted cash flow model, there's pretty much no scenario in which SpaceX could delay free cash flow by a decade and still justify its current valuation of $1.5 trillion, and that doesn't even factor in the capital funding needs of $84 a year over the next eight years, or $672 billion total.
Making predictions nearly ten years in the future is mostly an academic exercise, and by nature, predictions become less accurate the further away they are.
For SpaceX bulls, it's worth considering that the buy case is premised on the company successfully enduring nearly a decade of deep cash losses. If SpaceX accomplishes the goals it has set for itself, like making human life interplanetary, then it should pay off, but optimistically, it's still decades away from that.
The recent sell-off seems to reflect the reality that it will take many years for the company's investments to pay off, if they ever do. Given that, the stock seems destined to continue to fall as 2035, its first year of positive free cash flow according to Morgan Stanley, is still a long way away.
SpaceX (SPCX -6.70%) is once again looking to launch a test flight of its Starship megarocket. Investors should be paying very close attention, as the impact on SpaceX’s stock price should be meaningful.
After several aborted attempts, the company is looking to complete the rocket’s thirteenth test flight on July 23. As with most SpaceX launches, the attempt will be livestreamed via the company’s website.
“The booster’s primary test objective will be executing a successful launch, ascent, stage separation, boostback burn, and landing burn at an offshore landing point in the Gulf of America,” SpaceX explains. “There have been several modifications to hardware and software to address issues seen on the previous flight.”
The impact of this test flight for SpaceX cannot be overstated. In many ways, SpaceX’s long-term growth plans hinge on the company’s ability to successfully commercialize its Starship rocket.
If you’re a current or potential SpaceX investor, there are two things you need to know.
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1. Starship is critical for SpaceX growth plansIn its IPO prospectus filed earlier this year, SpaceX was not shy about predicting its growth potential.
“We believe we have identified the largest actionable total addressable market in human history,” the company boasted. “We estimate that our quantifiable TAM is $28.5 trillion.”
Digging deeper, it may be surprising to learn that SpaceX attributes just $370 billion to what it calls “space-enabled solutions”. That bucket includes the total revenue potential of commercializing its Starship rockets.
With a market cap well above $2 trillion, successfully commercializing rockets may not seem critical to SpaceX’s long-term plan, given its relatively low growth potential. But investors must understand that the success of SpaceX’s Starship rocket will enable other growth opportunities that are much more lucrative long term. In other words, Starship’s value won’t be relegated to payload fees alone.
For example, SpaceX attributes $1.6 trillion of its total addressable market to its Starlink internet service. If successful, its Starship rocket would dramatically increase the number of satellites SpaceX can launch in any given year while also lowering the cost of getting them into space.
In other words, SpaceX’s Starship rocket will increase the odds that SpaceX will be able to realize as much of its claimed $1.6 trillion opportunity as possible.
Meanwhile, SpaceX attributes a massive $26.5 trillion of its total $28.5 trillion addressable market to a single opportunity: AI. While this bucket contains many smaller opportunities, one of SpaceX’s biggest growth catalysts should be the realization of orbital data centers.
Orbital data centers are exactly what they sound like: data centers that operate in space. In space, data centers can take better advantage of solar energy and low ambient temperatures, lowering ongoing operating costs.
There are many technical challenges to getting data centers to operate successfully in space. One of the biggest, however, is simply getting these systems into space economically. If successful, SpaceX’s Starship rocket would meaningfully improve the company’s chances of doing so.
Image Source: Getty Images
2. Competition for Starship is heating upSpaceX’s rocket program is arguably the most advanced rocket program on the planet. But there’s rising investment across the industry, which will create more competition for SpaceX over the coming months and years.
Government entities like China’s CNSA and India’s ISRO are pursuing their own rocket developments. Meanwhile, private companies, including Blue Origin, Rocket Lab (RKLB +0.91%), and Relativity Space are also aggressively pursuing the development of their own rocket systems.
SpaceX’s rocket program, however, is unique in terms of its vertical integration.
“SpaceX has also effectively achieved a high degree of vertical integration,” observes Government Technology, a public sector magazine. “It owns almost all parts of its supply chain, designing, building, and testing all its major hardware components in-house, with a minimal use of suppliers. That gives it not just control over its hardware but considerably lower costs, and the price tag is the top consideration for launch contracts.”
It’s hard to disagree about SpaceX’s success, both in terms of its launch achievements and its cost competitiveness. But it’s also clear that competition is heating up.
If SpaceX’s upcoming test flight is successful, that will help clear the path for the full commercialization of Starship. In this scenario, SpaceX will once again put itself ahead of the pack in terms of both technology and launch costs. Both of those factors will prove critical to the company’s ability to execute on its long-term growth potential.
SpaceX’s rocket program is arguably the most advanced rocket program on the planet. But there’s rising investment across the industry, a fact that will create more competition for SpaceX over the coming months and years.
Cathie Wood is doing the Cathie Wood thing again. SpaceX (NASDAQ:SPCX | SPCX Price Prediction) is down 38% from its recent peak and trading below its IPO price; the lockup clock is ticking, and the founder of the firm that manages $30 billion in assets just told Fox Business on July 22, 2026, that the company “could become the most important company in history.” Not the decade. History. ARK is buying more instead of trimming.
The underlying claim is more interesting than the headline, because Wood is not defending a rocket business anymore. She is defending an AI holding company that happens to own the world’s cheapest way to leave the atmosphere. The public-market proxies for this thesis, Tesla (NASDAQ:TSLA) and Rocket Lab (NASDAQ:RKLB), tell you what the market thinks of the space-and-AI trade right now. Tesla is down 14% year to date, and Rocket Lab is down 27% over the past month. Wood is buying anyway.
The Moat Wood Is Actually Defending “SpaceX has a first mover advantage. It will be difficult. It has a ten year lead and the key has been reusable rockets.” That decade of iteration shows up in one number that matters more than any valuation multiple. SpaceX controls 70% of satellites in orbit. Reusable boosters are the reason. Every competitor has to build the flywheel from zero while SpaceX is already spinning it.
Rocket Lab is the closest publicly traded pure-play alternative, and Peter Beck’s team is running the correct playbook. Q1 2026 revenue hit $200.35 million, up 63.46% year over year, with a backlog of $2.20 billion and non-GAAP gross margins of 43.0%. Neutron, the medium-lift vehicle meant to compete with Falcon 9, is targeted for its debut launch later in 2026 after a stage-1 tank test failure pushed the timeline. That is the state of “second place” in launch. Impressive, growing, and still years behind.
The Real Thesis Is Orbital Data Centers Rockets are the setup. The punchline is compute. Wood argued that “The secret to scaling technologies is falling costs as units increase… SpaceX has a first mover advantage with 70% of the satellites and beyond that we have the global data centers, orbital data centers so they will be the most economic and will allow Elon and team the opportunity to develop… some of the most sophisticated frontier models in the world at the lowest cost.”
If you own launch, you own the cheapest way to put racks of GPUs into orbit where solar is free, and cooling is a physics problem instead of a water bill. The GAO flagged this exact concept in April, noting that data centers could account for up to 12% of U.S. electrical demand by 2028 and that since January 2026, the FCC has received three applications from U.S. companies for large satellite constellations operating as data centers. Wood says SpaceX is already renting data center capacity to Anthropic and Google. If that scales, the company competes with hyperscalers, not Boeing (NYSE:BA).
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Tesla is the tell. Tesla disclosed a roughly $2 billion equity investment in SpaceX in Q1 2026 and is partnering with SpaceX on a vertically integrated semiconductor fab at Gigafactory Texas. Elon is stitching his companies into one AI-industrial stack. The Q1 filing shows where the money moves.
The Multi-Trillion Stack Versus the $116 Billion Unlock Wood’s final flourish stacks the businesses on top of each other. “Ultimately SpaceX when they combine the most powerful, the robotaxi opportunity, the orbital data center opportunity… There are lots of opportunities and they are multi trillion dollar opportunities.” She also framed AI productivity as a generational advantage for U.S. companies, with Chinese competitors looking less efficient despite throwing raw compute at the problem.
Now the ugly part. SpaceX is set to unlock $116 billion in shares after IPO restrictions lift. That is a supply wave arriving into a stock already down 38%. Prediction markets are pricing 96.4% odds against S&P 500 inclusion in 2026, meaning index-fund buying will not rescue the float. Nasdaq-100 inclusion is already resolved yes, which helps, but does not neutralize the coming supply.
Wood’s thesis is coherent and more sophisticated than the headline suggests. The launch moat is real, the orbital compute angle is not science fiction, and the Tesla-SpaceX-xAI convergence is happening in filings. Whether you buy the dip depends on whether you can sit through the unlock. Wood can. Most retail cannot.
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When it comes to analyst price targets for Space Exploration Technologies (SPCX -5.30%), you're going to find a wide range. At the high end of the spectrum is Raymond James, which placed a whopping $800 target on the stock. Morningstar, meanwhile, has said the fair value for the stock is closer to $62.
In my opinion, the stock is much more likely to trade closer to Morningstar's fair valuation by year-end. This is largely based on the early valuation Elon Musk's other company, Tesla, traded at in the early years after its IPO.
Image source: The Motley Fool.
Selling pressure likely to mount After a hot start, SpaceX's stock has been in free fall, trading below its $135 IPO price. This is before any of the numerous lock-up expirations set to hit later this year have even started. With a deluge of shares expected to exponentially increase the amount of SpaceX stock available on the open market, this is a headwind the stock will have to contend with for most of the rest of 2026 and into 2027.
Now, strong results and a reasonable valuation could certainly overcome a flood of new shares hitting the market, but SpaceX's valuation is still in the stars. Even after its pullback, the stock still has a market cap of around $1.7 trillion for a company that generated less than $19 billion in revenue in 2025.
And while analysts expect rapid revenue growth this year (Morgan Stanley, for example, projects it will hit $45 billion), that's still an extreme valuation for a company set to continue losing money and burning cash. In fact, Morgan Stanley, which is bullish on the stock, doesn't think it will turn free cash flow positive until 2035. That means the company is going to have to raise a lot of cash, through equity or debt offerings, to fund what is a high-capital-expenditure (capex) business.
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A lot of SpaceX's valuation is based on future promises and predictions from founder and CEO Elon Musk, and his faithful following should help cushion the stock's downside, despite his spotty record with on-time predictions. However, that is largely why I think the stock will go into the $60s, not below that level.
A 10 times price-to-sales (P/S) multiple on $45 billion in revenue gets you to a market cap of $450 billion, which is about a $34 to $35 stock price. However, a high capex business also probably shouldn't be trading at a multiple of sales to begin with, so I don't think that is the best way to value the stock anyway. Nonetheless, a P/S of between 15 times and 20 times, which is where Tesla traded at in its early years, gives you between a $50 to $70 stock price, which is where I think SpaceX can trade at year-end.
SpaceX SPCX shares remain in focus after Elon Musk issued a pointed warning to those betting against his space infrastructure and artificial intelligence (AI) company.
In his latest post on X, the billionaire wrote: “Survival probability of firms who maintain significant short position in SPCX over time is very low.”
Musk’s comment arrives at a time when SpaceX stock has fallen out of favor with investors mostly because of valuation concerns. At writing, it’s down 40% versus its post-IPO high of over $200.
Bearish sentiment surrounding the space and AI conglomerate has intensified rather quickly.
Short sellers have built a massive $25 billion wager against SpaceX – with “short interest” soaring from 40 million shares a month ago to 206 million shares, representing roughly 32% of its public float.
Experts attribute this rapid acceleration in short positions to traders pricing in negative catalysts – including the firm’s high valuation multiple (over 80x sales).
Additionally, short sellers are betting that multi-billion-dollar annual net losses, fuelled by heavy AI compute expenditures, will continue to pressure SPCX shares in the near-term.
Despite rising bets against SpaceX shares, bulls contend that the current setup leaves short sellers vulnerable to a classic short squeeze.
With nearly a third of the active float sold short, any positive catalyst could trigger a violent buying scramble as bears rush to cover their positions.
In the near-term, this could kick off as soon as next month as SpaceX reports its very first quarterly earnings as a public company on August 4th.
If Starlink subscriber momentum, space launch revenues, or margin figures top expectations, the resulting rally could force margin calls and accelerate upward momentum.
Investors should note, however, that the potential for a squeeze is complicated by upcoming supply changes.
Following the earnings print, the initial post-IPO lock-up restrictions will begin to expire, releasing millions of insider and employee shares into the public float.
This incoming surge of liquidity will expand the tradable supply, making shares significantly easier for bears to borrow and cover over time.
In short, while long-term investors align with Elon Musk’s vision of dominating space logistics and next-gen connectivity, near-term traders remain sharply divided until the August numbers provide concrete clarity.
Despite recent underperformance, SPCX stock hasn’t fallen entirely out of favour with high-profile names.
For example, Cathie Wood – the chief executive of Ark Invest – continues to invest in SpaceX on the pullback, believing it could eventually become the most important company in history.
And Wall Street analysts seem to agree with her optimism. The consensus rating on SPCX sits at Moderate Buy currently, with price targets going as high as $800, signaling a more than 6x potential over time.
A 25-year dataset from First Trust Portfolios presents a sobering backdrop. The research tracks post-IPO performance from January 2001 through June 2026 and reveals a persistent pattern: most newly listed U.S. stocks underperform as time passes.
SPCX stock is treading water ahead of TSLA earnings. See the price action here. IPO Hype Meets Historical RealityInitial enthusiasm often masks the harsh reality — within two years of listing, 59% of companies generated negative returns, with the median stock declining 10.51%.
The trend did not stabilize in later years. After three years, the median loss widened to 14.07%, and by year four, it reached 17.13%. Losses among weaker performers were far more severe. The bottom quartile declined more than 61% after two years and over 73% after four years.
The pattern shows deterioration rather than recovery. Time, in most cases, increases the gap between IPO expectations and operational execution. Growth narratives face pressure from earnings realities, competition and capital intensity.
SpaceX enters public markets with extraordinary visibility, but the same forces apply. High valuation multiples leave little room for operational missteps.
There is, however, an important counterbalance. While median outcomes remain negative, average returns across the dataset stayed positive: 28.89% after two years, 32.34% after three years, and 39.55% after four years. This divergence highlights a skewed distribution. A small group of outliers delivered exceptional gains, lifting the overall average despite widespread underperformance.
The SpaceX BetInvestors focusing on SpaceX are effectively making a probabilistic bet. The base rate suggests underperformance is more common than success. Yet the upside case rests on joining the narrow cohort of transformational winners.
SpaceX has attributes that could support that thesis: dominant launch economics, expanding satellite revenue through Starlink and long-term optionality in deep space infrastructure.
Still, the burden of proof is elevated. Historical IPO data implies that narrative strength must convert into sustained financial performance within a relatively short window. Execution risk, regulatory complexity and capital demands remain central variables.
The post-IPO phase, therefore, becomes less about momentum and more about validation. SpaceX may redefine industries, but market history indicates that only a minority of companies translate early promise into enduring shareholder returns.
SPCX Stock Price Activity: SpaceX shares were down 3.05% at $119.77 at the time of publication on Wednesday, according to Benzinga Pro data.
Photo: photo_gonzo / Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Space Exploration Technologies (SPCX -1.39%) went public on June 12, and it quickly soared to a peak of $225.64. However, it has since lost 45% of its value, so even investors who bought it at the official initial public offering (IPO) price of $135 are currently underwater.
SpaceX is scheduled to release its operating results for the second quarter of 2026 (ended June 30) on Aug. 4. The report, and the accompanying conference call with CEO Elon Musk, will provide investors with an update on the company's space transportation, satellite internet connectivity, and artificial intelligence (AI) infrastructure businesses.
However, a positive second-quarter report probably won't be enough to spark a recovery in SpaceX stock because of its sky-high valuation. Here's why buying it ahead of Aug. 4 might not be a good move.
Image source: Getty Images.
What Wall Street might be looking for on Aug. 4 SpaceX generated $4.7 billion in total revenue during the first quarter of 2026 (ended March 31), and here was the contribution from each of its three core segments:
Segment
First-Quarter Revenue
Connectivity
$3.26 billion
AI
$820 million
Space
$620 million
Data source: SpaceX.
Connectivity was the biggest source of revenue by far. SpaceX has used its Falcon 9 reusable rockets to launch over 9,600 Starlink satellites into orbit, which provide internet access to 10.3 million paying customers. The upcoming V3 Starlink satellites will deliver 10 times more bandwidth than the current V2 satellites, so they could give this business a huge boost when they start launching later this year.
According to Yahoo! Finance, Wall Street analysts estimate SpaceX generated around $6.87 billion in total revenue during the second quarter, but I think the contributions from its three segments were probably vastly different compared to the first quarter. Connectivity was almost certainly a key source of revenue yet again, but the AI business likely showed substantial growth.
In January, SpaceX acquired Elon Musk's AI start-up xAI, which operates enormous data centers like Colossus and Colossus II. This infrastructure is used to develop AI products like the Grok chatbot, but SpaceX is now renting some of the spare computing capacity to other companies in exchange for massive fees.
In May, SpaceX agreed to rent $1.25 billion worth of computing capacity per month to Anthropic. In June, the company signed two more deals: one to rent $920 million worth of capacity per month to Google parent Alphabet starting in October, and another to rent $150 million worth of capacity per month to Reflection AI.
As a result, revenue from the AI business likely surged in the second quarter compared to the first quarter, which is something Wall Street analysts might hang their hats on to justify SpaceX's hefty valuation.
A positive quarterly report might not turn SpaceX stock around Despite the recent decline in SpaceX stock, it's still trading at a steep premium to the broader market. Its price-to-sales (P/S) ratio of 83.7 is more than 13 times higher than the P/S ratio of the Nasdaq-100 index, which is currently 6.2. In other words, SpaceX stock appears to be heavily overvalued relative to a basket of its big-tech peers.
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One single quarterly report is unlikely to show enough growth to make the stock look attractive at the current price. In fact, even if we use Wall Street's 2027 revenue estimate of $72.3 billion, SpaceX has a forward P/S ratio of 23.3, which is still very expensive compared to the Nasdaq-100.
As a result, investors who buy this stock today need to have a very long-term time horizon of at least five years to give the company time to grow into its valuation. There is every chance it will eventually do so, because management believes its addressable market is worth $28.5 trillion across all three of its businesses.
The AI infrastructure market alone could be worth $26.5 trillion. In the future, Elon Musk thinks SpaceX can launch computing clusters into orbit, where they will run on solar power and won't need complex cooling systems. Starlink satellites can beam the data down to Earth, so the company already has distribution sorted, giving it a huge advantage over any potential competitors.
With all of that said, I wouldn't be piling into SpaceX stock ahead of its Aug. 4 report in the hope an immediate recovery will follow. This is very much a long-term story.
ARK Invest CEO Cathie Wood is defending her fund's stake in SpaceX, declaring the aerospace and satellite network pioneer could become the "most important company in global history" despite the stock's recent slide and an upcoming $116 billion share unlock.
During an interview on "Mornings with Maria" Wednesday, Wood explained why she remains bullish on SpaceX after funds managed by ARK Invest allocated $80 million to the position following its public debut.
"[Down] from its peak, it is," Wood said, "but of course not from the IPO price. We think this could become the most important company in history, and I mean in global history."
FAMED PERMABEAR WARNS SPACEX I.P.O. COULD BE LAUGHED AT IN 50 YEARS, ‘CRAZIEST’ MARKET BET FOR WALL STREET
"We're talking about not only really exploring a new world — the universe — in terms of its launch capabilities and helping others to do so as well, but also a global communications network. Really, think telecom, that's been a very local business. In fact, the way to break into countries historically was to buy the [telecommunications companies], no longer."
ARK Invest CEO Cathie Wood doubled down on her bullish stance for SpaceX stock on FOX Business' "Mornings with Maria." (Getty Images)
Just before Wednesday's opening bell, SpaceX stock was trading around $123.50 per share. According to Barron's, the stock is down about 47% from its high of about $225, and has shed nearly $1.4 trillion in market value. This puts SpaceX in eighth place by market capitalization, behind Meta for the first time since its debut.
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Wood previously said in a May interview with Bloomberg that she imagines SpaceX will be "volatile," but applauded founder Elon Musk's "incredible" ability to vertically integrate all of his companies, including Tesla, xAI and Neuralink.
Musk warned investors against trying to short-sell the stock last week in a post on X, saying, "The survival probability of firms that maintain a significant short position in SpaceX over time is very low."
On July 7, Space Exploration Technologies (SPCX -1.54%) was added to the Nasdaq-100, which comprises 100 of the largest nonfinancial companies listed on the Nasdaq.
Initially, some expected its inclusion in the index to be a short-term catalyst that would send the stock higher; exchange-traded funds (ETFs) that track the Nasdaq-100 needed to buy it. For example, SpaceX now makes up 1.1% of the portfolio weight of the Invesco QQQ Trust, which was the second-most traded ETF by trading volume as of March 31. However, that has not been the case. From July 7 to July 17, shares of SpaceX dropped 17%.
Historic patterns suggest that an early decline after inclusion in the index was likely. But those patterns suggest something different about where SpaceX could be headed over the next several months.
Image source: Getty Images.
What the past tells us about entering the Nasdaq-100 Over the past two years, of the 21 stocks that were added to the Nasdaq-100, only six climbed in their first week in the index, according to Dow Jones Market Data data shared by Bloomberg. The average decline for stocks after that first week was 3.8%, but SpaceX fared worse than that with an 8.9% drop from July 7 to July 14.
Given a little more time, however, the stats start looking positive. One month after inclusion, the average stock had a 3.6% gain, and after three months, the average stock had a 6.3% gain.
That said, what happened to other recent additions to the Nasdaq-100 won't necessarily happen to SpaceX. Moreover, those average increases of 3.6% and 6.3%, respectively, are relatively minuscule. What SpaceX wants to accomplish, and any meaningful returns it could generate for shareholders, will happen further down the road.
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SpaceX's long-term upside potential SpaceX is known for its rocket launches and satellite deployments, but it has projected that $26.5 trillion of the $28.5 trillion total addressable market it could pursue is in artificial intelligence (AI).
Part of that opportunity lies in building out AI cloud computing infrastructure, which SpaceX is doing on the ground and eventually plans to do in orbit. SpaceX signed deals to rent out some of its compute capacity to Alphabet and start-up Anthropic, a pair of deals that could generate roughly $26 billion in combined annual revenue.
It also has a computing capacity deal with Reflection AI, a builder of open AI models, worth $150 million per month or $6.3 billion in total if the deal runs through 2029. Additionally, according to a July 17 report from The Wall Street Journal, SpaceX is in talks with the Department of Defense for computing capacity in a deal that could be worth several billion dollars.
That all could start adding up to meaningful revenue for SpaceX, which only generated $18.6 billion in sales in 2025. But those revenue sources above don't include SpaceX's potential to generate more sales and build out the future of AI infrastructure through satellite-based data centers; Musk says his company could deploy AI satellites as soon as 2028.
Some analysts are very bullish on SpaceX, with John Godyn of Citigroup placing a long-term price target (no specific time frame) of $900 per share on it. From the July 17 closing price of just under $124, that would be a gain of more than 625%.
The costs of being an AI leader The infrastructure needed to be a leader in AI has cost SpaceX billions of dollars each year and will continue to do so. In terms of its 2025 capital expenditures, AI was easily the company's most costly segment.
Space Capital Expenditures
Connectivity Capital Expenditures
AI Capital Expenditures
$3.8 billion
$4.1 billion
$12.7 billion
Data source: SpaceX Form S-1.
Also, in just the first three months of 2026, SpaceX's total capital expenditures already reached $10.1 billion. Its losses are also climbing; SpaceX reported a $4.9 billion net loss for all of 2025 but has already racked up a $4.2 billion net loss after just the first quarter of 2026.
In addition to financial costs, SpaceX also faces a high bar to boosting its stock price, as it's already one of the world's most valuable companies by market cap. The expectations for the company are sky-high, and those are baked into its premium stock price, so it doesn't have much wiggle room if its quarterly results underwhelm.
Putting it all together What's most important with SpaceX isn't how it will perform in the next few months. Rather, what's most important is how much of that $26.5 trillion total addressable market in AI it can capture, how it will handle the challenges of building space-based data centers, and how long it will take for the company to reach profitability.
Benzinga Pro estimates SpaceX will report a loss of 25 cents per share on quarterly revenue of $6.98 billion.
SpaceX’s Post-IPO VolatilityMacquarie’s Bullish Outlook on SpaceX Macquarie remains optimistic about SpaceX, reiterating an Outperform rating and setting a $250 price target. The firm views SpaceX as a premier AI infrastructure asset, emphasizing the potential upside from its AI compute ambitions and orbital AI data-center system. Image: Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Prediction markets are signaling that SpaceX (NASDAQ: SPCX) is likely to finish July 2026 above $120, although traders remain skeptical about a rapid recovery toward its post-IPO highs.
Data from crypto-based prediction platform Polymarket shows market participants assigning a 96% probability that SpaceX stock will close above $100 by July 31.
The odds decline to 79% for a close above $110 and 68% for a finish above $120, indicating that traders broadly expect the stock to remain near its current trading range.
At the same time, sentiment becomes significantly more cautious at higher price levels.
Polymarket traders place the probability of SpaceX closing above $130 at 55%, effectively signaling a coin-flip outcome.
Beyond that threshold, confidence drops sharply, with only a 16% chance of the stock ending July above $140 and a 9% probability of finishing above $150.
The latest prediction market data suggests that most speculative activity is centered around the $110 to $150 range, where trading volumes are highest.
According to the market-implied probabilities, the most likely outcome is that SpaceX shares close the month between $120 and $130. While traders still see a reasonable chance of a move above $130, expectations for a stronger rally appear limited ahead of month-end.
The probabilities continue to fall at more ambitious price targets. Contracts tracking a close above $160 imply only a 3% chance of success.
Higher thresholds such as $170, $180, and $200 carry probabilities of 5%, 7%, and 10%, respectively, though these contracts are supported by relatively low trading volumes.
SpaceX stock volatility The prediction market outlook comes as SpaceX stock trades at $123 following a volatile debut on public markets.
Notably, the company completed its historic initial public offering in June 2026 at $135 per share before surging to highs near $225.
However, SPCX has since retraced significantly and remains below its IPO price as investors assess valuation concerns, upcoming share unlocks, and the company’s long-term growth prospects.
Despite the pullback, SpaceX remains one of the world’s most valuable publicly traded companies, supported by growth expectations surrounding Starlink, Starship development, and broader space infrastructure opportunities.
Looking ahead, traders appear reluctant to price in a major rebound before the end of July, with the company’s first public earnings report scheduled for August 4 likely serving as the next major catalyst.
Any significant developments related to Starship testing, launch activity, partnerships, or earnings guidance could quickly alter sentiment.
With the S&P 500 trading at a multi-year high of 29 times earnings, possible interest rate hikes on the horizon, and unresolved military conflicts driving oil prices higher, it seems like it's only a matter of time before the market crashes. When that happens, many of the priciest growth stocks will go on sale and become compelling purchases for patient investors.
One of those stocks is AST SpaceMobile (ASTS -0.22%), a producer of low Earth orbit (LEO) satellites that was overshadowed by SpaceX's (SPCX -0.34%) historic IPO. Let's see why AST SpaceMobile is one of the only space stocks I'd buy in the next market crash.
Image source: Getty Images.
What sets AST SpaceMobile apart from SpaceX? AST and SpaceX's Starlink both produce LEO satellites for internet communications. However, AST mainly helps telecom giants like AT&T and Verizon extend their broadband networks to rural areas that their terrestrial networks can't reach. Starlink provides its own first-party satellite internet service. AST's satellites are also twice the size of Starlink's largest satellites, making them the largest communication arrays ever deployed into orbit.
AST also processes its data on the ground using Radio Access Network (RAN) software, while Starlink processes it in its satellites. AST can upgrade its ground infrastructure to new wireless technologies (such as 6G), but Starlink must completely replace its satellites with each upgrade.
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AST also doesn't operate money-losing rocket launch and artificial intelligence (AI) businesses like SpaceX. While AST isn't profitable yet, it has a clear path to profitability because its core business operates similarly to Starlink, SpaceX's only profitable business.
AST has launched 10 commercial BlueBird satellites to date. It aims to have 45 to 60 satellites in orbit by the end of 2026, and to expand its constellation to as many as 248 satellites within the next few years. However, that expansion will likely require more dilutive stock and debt offerings, as seen with its recent approval of a new $1 billion convertible stock offering.
Why could AST be a great long-term investment? From 2025 to 2028, analysts expect AST's revenue to grow from $71 million to $1.87 billion. They also expect its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to turn positive in 2027 and more than quadruple to $1.39 billion in 2028.
But with an enterprise value of $20.7 billion, AST already trades at 12 times and 16 times its projected 2028 revenue and adjusted EBITDA, respectively. If a market crash cuts those valuations in half, it'd be an incredible buying opportunity for space-oriented investors.
Leo Sun has positions in Verizon Communications. The Motley Fool has positions in and recommends AST SpaceMobile. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
Wall Street remains overwhelmingly bullish on SpaceX (NASDAQ: SPCX) ahead of the company's first earnings report as a publicly traded firm on August 4, 2026.
Roughly six weeks ago, on June 12, Elon Musk's Space Exploration Technologies (SpaceX) (SPCX +3.08%) cemented its name in Wall Street's record book. Its initial public offering (IPO) raised $85.7 billion, including the underwriters' overallotment option, and its market cap quickly vaulted to nearly $3 trillion in the days that followed.
Although Wall Street analysts have set some truly lofty price targets for SpaceX stock, the biggest bull in the room continues to be its CEO. On July 17, Musk responded to a commenter on social media platform X (a subsidiary of SpaceX) by stating: "I said SpaceX will be worth more than Earth if we achieve our goals."
SpaceX CEO Elon Musk is known for making bold claims. Image source: Official White House Photo.
Musk has a habit of making otherworldly innovative promises -- but this is one target that the bond market simply doesn't agree with.
Bond traders are sending a clear message about SpaceX Before SpaceX went public, it released a lengthy registration statement (S-1) that contained its financials, risk factors, and forward-looking projections, among other details. The company's S-1 also noted that debt and equity offerings would be relied on to expand artificial intelligence (AI) start-up xAI's compute capacity.
SpaceX wasted little time raising additional capital after its IPO. On June 23, the company priced $25 billion in debt across five tranches, with maturities ranging from 2031 to 2056, and coupon rates of 5.35% to 6.65%.
I said SpaceX will be worth more than Earth if we achieve our goals.
Obviously true.
-- Elon Musk (@elonmusk) July 17, 2026 Bonds are typically issued at or around par value ($1.00) and can trade above or below par, depending on the bond market's outlook for the company in question. Since SpaceX's bonds began trading a few weeks ago, they've been sinking like a cement block:
2031 bond: 99.92 cents (issued) / 98.35 cents (as of July 17) 2033 bond: 99.84 cents / 97.10 cents 2036 bond: 99.83 cents / 95.63 cents 2046 bond: 99.93 cents / 92.63 cents 2056 bond: 99.45 cents / 91.07 cents While this decline isn't as noticeable in the bond maturing five years from now, there's been a decisive drop in bond prices for the longer-dated maturities over the course of three weeks.
As a reminder, bond prices and yields are inversely related. As bond prices are dragged lower, yields are pushing higher. What this tells us is that bond traders still don't see an attractive risk-versus-reward scenario with some tranches of SpaceX's debt yielding north of 7%.
BREAKING: SpaceX, $SPCX, shares are down -41.1% from their peak, erasing over $1 trillion of market value. pic.twitter.com/6jMI3VRY4Q
-- Hedgeye (@Hedgeye) July 17, 2026 More importantly, it indicates the bond market isn't convinced that Elon Musk's company can make good on its debt obligations. Despite SpaceX's mammoth capital raise, the company hasn't demonstrated it can generate recurring profits, and several of its operating segments are highly capital-intensive (xAI and its space infrastructure operations) and prone to production delays.
Based on what the bond market is telling us, not only will Musk's company not be worth more than Earth, but there aren't any solid guarantees it'll remain one of America's largest public companies.
Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Space Exploration Technologies (SPCX +3.19%) has many investors dreaming of fantastic gains -- with their investments even potentially turning them into millionaires. Why such excitement? SpaceX has set out game-changing goals such as developing data centers in orbit and colonizing Mars, and if the company achieves them, the awards could be significant. And at the driver's seat sits founder Elon Musk, known for his ambitious nature and focus on innovation.
This package has stirred up excitement in the investment community and led to retail and professional investors rushing to get in on the stock. The IPO, the world's biggest as it raised more than $85 billion, was oversubscribed, and investors didn't hesitate to hit the buy button in the first few days of trading, too. SpaceX stock soared 67% from its IPO price to a peak of $225 on June 16.
In recent days, though, investors have grown more hesitant, and the stock has fallen below its IPO price. Could $10,000 invested in SpaceX, now trading at a low, make you a millionaire? Let's find out.
Image source: Getty Images.
SpaceX's accomplishments so far First, let's talk about the SpaceX business. The company operates three units: space, connectivity, and artificial intelligence (AI). The space business aims to reduce the cost of rocket launches through the use of reusable technology, and it has made significant progress in this area. For example, in 2010, it had already lowered the costs of launches by 85%, according to NASA. SpaceX's next step in reaching its space goals is to launch its fully reusable rocket, Starship, with payloads this year.
In connectivity, SpaceX runs Starlink, a satellite-based internet service. Here, it's grown users from 2.3 million three years ago to 10 million today. As for AI, SpaceX has recently signed a deal to provide compute to Anthropic -- this will result in monthly payments of $1.25 billion to SpaceX through May 2029.
All of this is very positive, but it's important to note that SpaceX must continue to invest enormous amounts of cash to potentially reach its goals. For example, last year the company's capital spending totaled $20 billion, surpassing its revenue of $18 billion and driving it to a $4.9 billion loss. Investors may have focused on the company's big goals prior to the IPO and during the early days of trading, but now and as SpaceX reports earnings in the coming quarters, they may consider these numbers more closely. And if they do, this could continue to weigh on stock performance.
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A trillion-dollar company Now, let's consider our question: Could $10,000 invested in SpaceX today make you a millionaire? This would be very unlikely as the stock would have to advance 10,000%, bringing it to more than $12,000 per share. And considering SpaceX already is a trillion-dollar company, such gains would bring it to nearly impossible levels.
By comparison, stocks that have made enormous gains started at much lower prices and market value levels. An example is Nvidia.
NVDA data by YCharts
SpaceX, however, right out of the gate, was already a trillion-dollar company, making it more difficult to imagine the stock propelling an investor to the millionaire mark.
All of this means it's unlikely that SpaceX, alone, will make you a millionaire, unless you invest an enormous amount in the stock -- a move that would be highly risky. But could SpaceX still boost your portfolio? It's possible, but it's important to remember that the stock comes with a fair share of risk right now -- the company is involved in a heavy phase of spending, and its successes depend on the advancement of certain technologies. If you're OK with that, you might consider buying a few shares of SpaceX on the dip, and potentially adding to the position if the company's earnings and general updates are positive.
But for most investors, it's a better idea to keep SpaceX on your watch list for now -- and to potentially create a million-dollar portfolio, focus on diversifying across a number of quality stocks.
On June 12, Space Exploration Technologies (SPCX +3.19%) became the largest initial public offering (IPO) in U.S. history as measured by market value. The rocket and satellite company was worth nearly $1.8 trillion at the listing price of $135 per share.
SpaceX peaked around $202 per share on its third trading day. However, the stock has since fallen 36% to $129 per share, and history says it has further to fall. Here's what investors should know.
Image source: Getty Images.
Highly anticipated IPO stocks frequently notch large gains on the first trading day. SpaceX was no exception; the stock closed just shy of $161 per share (about 19% above the IPO price) on day one. However, companies that go public with large market capitalizations have historically performed poorly over the long term.
Among the 10 largest U.S. IPOs in the last decade, the median stock fell 17% from its IPO price during its first year on the public market. SpaceX priced its IPO at $135 per share. If its performance matches the historical median, the stock will trade at $112 per share by June 2027 (i.e., 17% below its IPO price). That implies 13% downside from the current share price of $129.
In that scenario, $10,000 invested in SpaceX today would be worth $8,820 by June 2027. But there is more bad news: History says SpaceX could decline even further in the interim.
Among the 10 largest U.S. IPOs in the last decade, the median stock dropped 25% from its IPO price at some point during the first year. If SpaceX follows that trajectory, the stock will fall to $101 per share at some point before June 2027. That implies 20% downside from its current price.
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SpaceX has compelling growth prospects, but the stock is very expensive SpaceX's reusable rocket architecture enables the company to launch payloads into orbit more frequently and cost-effectively than its competitors. That economic moat has not only helped SpaceX build the world's largest satellite internet service, Starlink, but also positioned the company to disrupt the artificial intelligence industry with orbital data centers.
SpaceX values its addressable market at $28.5 trillion, and the company attributes the vast majority of that figure ($26.5 trillion) to artificial intelligence products and services. Its SEC Form S-1 (registration statement) states:
We believe SpaceX's reusable rockets, scaled satellite manufacturing, and operational expertise can enable the cost-effective and rapid deployment of massive AI compute satellite constellations -- with potentially millions of satellites -- for orbital data centers. We believe these AI compute satellites in sun-synchronous orbit will be able to handle energy-intensive AI workloads, such as inference demand, at far greater scale and efficiency than terrestrial alternatives.
However, SpaceX will not launch orbital data centers until 2028 at the earliest. Meanwhile, the stock currently trades at 88 times sales. By comparison, Palantir Technologies is the most expensive stock in the S&P 500 (^GSPC +0.89%) at 62 times sales.
That means SpaceX is currently 40% more expensive than the most richly valued member of the benchmark index for the entire U.S. stock market. I doubt that premium is sustainable.
Here's the big picture: History suggests SpaceX stock is headed lower in the coming months. The current valuation hints at the same outcome. That does not mean SpaceX will always be a bad investment. But I think investors should wait patiently for a more attractive buying opportunity. Better entry points are sure to arise eventually.
Consider Uber Technologies. Since its IPO in May 2019, the stock has underperformed the S&P 500 by 99 percentage points. But the stock has also outperformed the S&P 500 by 140 percentage points since July 2022.
The lesson is simple: Uber shareholders who didn't dive headlong into the IPO but waited for a more reasonable buying opportunity have been well rewarded. I believe the SpaceX story will be similar in hindsight.
The Procure Space ETF is rated Sell due to high risk and insufficient return potential at current levels. UFO has fallen over 30% from its 52-week high, with technicals indicating further downside unless a strong bounce materializes soon. The ETF's portfolio combines unprofitable, cash-burning growth stocks and legacy defense names, neither offering clear value or safety.
Space Exploration Technologies (SPCX +3.19%) has drawn a great amount of excitement in recent times. The company, better known as SpaceX, completed the world's biggest initial public offering last month -- and saw its stock soar 27% in the first days of trading.
In recent times, SpaceX stock has pulled back, even falling below its IPO price of $135. But even at this level, I think the stock is too expensive considering the risk involved -- that's why I'm still not buying. Let's check out the details.
Image source: Getty Images.
A smart mix of businesses It's true that SpaceX offers a smart mix of growth businesses -- rocket launches, connectivity, and artificial intelligence (AI) -- and these businesses can work together to deliver efficiency. For example, SpaceX can use its rockets to deliver materials to space for the satellite-based internet service and the AI business. This offers SpaceX great autonomy and keeps costs down.
The company has also made progress on goals such as bringing down the costs of rocket launches, and last year it completed more orbital launches than any other player. The connectivity business has seen its subscribers quadruple over three years, and this growth is key since this unit drives revenue growth.
All of that is positive, and SpaceX, at $119 at the July 20 market close, is considerably lower than it was a few weeks ago. But I'm still not buying because the stock is expensive given the amount of risk involved. Prior to the IPO, Morningstar said its fair value for SpaceX was $63, which seems reasonable; today, the SpaceX price remains far from that level.
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Upcoming earnings reports I also think that before diving in, it's important to take a look at an earnings report or two to monitor the company's spending trends and the level of revenue that's being generated. So far, we may look at the financial picture over the past three years, as provided in the prospectus. But since SpaceX's capital expenditures are increasing, I'd like to see fresh earnings data.
This is particularly key for a company like SpaceX, which has many goals linked to technologies that are still in development. For example, as SpaceX increases capital spending, is its revenue climbing at a fast pace? Last year, capex of $20 billion exceeded revenue, which was $18 billion. I'd like to see revenue step ahead in the coming quarters.
At this point, SpaceX remains an interesting business that's made progress in key areas. The company could have a very bright future several years down the road, so I understand that some investors aim to get in early. But in my opinion, risk remains high, and visibility remains limited -- so even though SpaceX stock has declined, I'm still not buying.
Billionaire investor Mark Cuban‘s stock options philosophy is shining a spotlight on a theme already familiar to ETF investors. Many of the market’s biggest wealth creators that are using the option of giving every employee an ownership stake, are also the largest holdings in technology-focused funds.
He also suggested governments could encourage the practice by offering lower corporate tax rates to companies that distribute equity more broadly. The remarks followed reports that former SpaceX welder Juan Hernandez, who joined the company in 2015 earning $28 an hour, became the owner of an estimated $880,000 worth of SpaceX shares after the company’s public debut.
SpaceX’s IPO Opens a New ETF OpportunityFor ETF investors, SpaceX’s historic listing represents more than just another high-profile IPO. The aerospace giant has become an investable asset through ETFs, allowing investors to gain exposure to one of the world’s most valuable companies without owning the stock directly.
Employee Ownership Is Already Embedded in Major ETF PortfoliosThe renewed focus on employee ownership also highlights a common thread among many of the companies that dominate the largest U.S. ETFs.
That overlap is notable because the businesses most associated with broad-based equity compensation have also delivered some of the strongest long-term returns in the public markets. While stock-based compensation can dilute existing shareholders if not managed carefully, proponents argue that giving employees a stake in the company’s success aligns incentives, strengthens retention, and encourages long-term value creation.
Academic research lends support to that view. In a report, Fortune cited a 2021 Harvard Business School study, which found that if all private U.S. companies became 30% employee-owned, household wealth would roughly double, while separate studies have linked employee ownership to higher productivity, lower employee turnover, and greater corporate resilience.
For ETF investors, the SpaceX IPO is a reminder that employee ownership is a recurring feature of many of the innovative, market-leading companies that dominate technology and growth-focused ETFs. As SpaceX joins the ranks of publicly traded mega-caps, investors now have another avenue to participate in a business whose success has already created wealth for both employees and shareholders alike.
Photo: Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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