Following a blockbuster initial public offering (IPO) that became the largest in stock market history, shares of Space Exploration Technologies (SPCX 1.88%) -- best known as SpaceX -- have cooled off.
There was, to put it lightly, a lot of hype surrounding SpaceX's IPO, partly because of the promises it had sold to investors and partly because of the usual cult-like following of its CEO, Elon Musk. Once SpaceX began trading on June 12, tons of retail investors poured money into the stock. But now those gains have virtually disappeared for most investors who got in after the IPO.
Considering the roller-coaster ride the stock has taken investors on so far, is now a time to jump ship until IPO-mania is over, or should investors embrace what many see as inevitable volatility?
Image source: The Motley Fool.
Great businesses don't always make great investments Any time there's a blockbuster IPO, high volatility is expected in its early trading days. A lot of it comes from people speculating and trying to make a quick dollar off the IPO pop before cashing out, rather than being left holding the bag. SpaceX has so far followed that trend.
Stock speculation aside, SpaceX's value proposition remains the same: It has rocket launch and internet satellite businesses that are huge players in their respective industries; it has an artificial intelligence division after acquiring Musk's xAI (which owns X, formerly known as Twitter); and it's sitting on lots of cloud computing capacity that it can rent out for another revenue stream.
There's a lot to be excited about with SpaceX's business, but that doesn't always make for a good investment -- especially when it's valued as high as SpaceX. Even after its recent pullback, SpaceX is valued at over $2 trillion (as of market close on June 22) and is the seventh-most-valuable public company in the world.
That's a huge valuation for a company that lost nearly $5 billion in 2025 and trades at well over 100 times sales. For perspective, the six companies currently valued ahead of SpaceX are trading at between 3.4 and 20.1 times sales and reported net income between $18.1 billion and $62.6 billion in their most recent quarters.
AMZN PS Ratio data by YCharts
SpaceX's stock will be a test of who's investing versus speculating. When you speculate, you buy shares simply hoping to profit from price swings, and don't really care too much about the underlying company. When you invest, you're buying shares of a company because you want to own a piece of a business that you believe in.
If you fall into the speculation bucket, you could be in for a long ride that likely won't work out in your favor. If you fall into the investing bucket -- which should absolutely be the case -- then you shouldn't give too much weight to these short-term price swings because they won't matter too much years down the road.
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Investing in SpaceX is about believing in a vision that's unlikely to come to fruition for well over a decade. Whether it's data centers in space or other ambitious plans, the focus should be on the long-term opportunities SpaceX is pursuing. You shouldn't jump ship just because of a few bad days, but you should understand that, historically, companies in SpaceX's position have underperformed in the first few years after their IPO.
There's no rush to invest in SpaceX right now. I would wait it out until well after its lock-up periods (when insiders can sell shares) have passed before deciding when it is a good entry point for investing. If you already own shares, I'd hold on to them for now instead of panic-selling; just be prepared to stomach the volatility.
Stefon Walters has positions in Apple, Microsoft, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
SpaceX SPCX shares fell more than 1% in trading on Thursday, extending a recent pullback after closing at $154.54 in the previous session, their lowest close since the company’s mid-month IPO.
The stock briefly dipped below its $150 IPO price earlier this week but remains slightly above its initial trading level of June 12.
After debuting at $135 and surging above $225 in early sessions, the stock has since retreated, reflecting increased volatility in the days following listing.
Retail demand remains strong despite price pullbackMarket attention has shifted to retail investor behavior following the IPO, with data suggesting continued buying interest even as the stock has cooled.
Vanda Research noted in a Wednesday report that retail investors have consistently added to positions since listing.
"Unlike many thematic launches that quickly lose momentum, retail investors have been net buyers every day since the stock listed, reinforcing its status as a retail favourite," Vanda wrote.
The firm also highlighted uncertainty around future flows.
"The next question is whether fresh inflows reaccelerate or whether investors begin rotating back into individual AI names following the recent pullback."
Meanwhile, early Wall Street coverage has taken a cautious stance.
KeyBank initiated coverage without a price target, stating the company “possesses significant disruptive growth avenues, though we believe this is reflective in [the] current valuation and risk/reward appears balanced, in our view,” they wrote.
Susquehanna also initiated coverage with a Neutral rating and a $170 price target.
SpaceX is set to be included in the Russell 1000 index on Friday, a move expected to increase exposure within growth-oriented funds.
The stock will be classified as approximately 90.4% growth and 9.6% value within the index framework.
The IPO comes amid additional corporate financing activity.
The company recently tapped debt markets following its listing, with an offering that drew reported demand of nearly $89 billion and carried coupons ranging from 5.35% to 6.65% with maturities between 2031 and 2056.
The proceeds are expected to be used to repay a bridge loan, cover fees, and support general corporate purposes.
The refinancing replaces a $20 billion bridge loan related to debt from xAI, which SpaceX acquired in February.
The company is also preparing for its first earnings report as a public entity, expected in late July or early August.
Investors are expected to focus on Starlink subscriber growth and Starship R&D spending.
“Starlink is the biggest revenue and profit driver for the company right now,” Morningstar said in a note earlier this month.
The recent pullback in SpaceX shares has also impacted Elon Musk’s net worth, which fell to $946 billion from about $1.11 trillion earlier this month, according to the Bloomberg Billionaires Index.
Musk had briefly crossed the trillion-dollar threshold following SpaceX’s June 12 IPO, when shares surged to $225.64 and lifted his paper wealth to a peak of around $1.32 trillion.
However, the subsequent decline in both SpaceX and Tesla shares has reduced his fortune significantly, though he remains the world’s richest individual by a wide margin.
The IPO rally has cooled as investors reassess valuations, capital intensity, and future growth expectations tied to SpaceX’s expanding AI and satellite ambitions.
If you pay any attention to financial or business news, you're probably aware of Space Exploration Technologies (SPCX 1.27%), or SpaceX, another Elon Musk company in addition to Tesla. You may also know that it launched on the stock market through an initial public offering (IPO) in mid-June.
Here we are, a few days later, and the stock is down 31% from its high of about $225 per share to a recent $154 (as of June 24). That's kind of worrisome on its own, and on top of that, SpaceX management is planning to take on considerable debt, too. Is that enough reason to steer clear? Let's see.
Image source: The Motley Fool.
First, know that SpaceX is focused on designing, building, and launching reusable rockets and spacecraft to take satellites and cargo into space. It also encompasses the Starlink satellite internet service and is developing the Starship spacecraft, too, aiming to be a disruptor in the space travel and exploration arenas.
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SpaceX and debt: Good or bad? Debt can be a good thing. It allows us to buy homes and new cars and even go to college. But it can also mire us in steep credit card bills -- and it can put companies in precarious positions, too.
SpaceX management had noted in the company's prospectus that "We plan to access a range of debt and equity financing solutions available to us as a public company to fund future investments in growth and to maintain strong liquidity." One might wonder why the company is already looking to borrow funds, as it just raised $85.7 billion via its IPO.
But it was serious. The company has already raised $25 billion through a debt sale, as CNBC reported on June 23. SpaceX has said that it now has more than $100 billion in cash.
If you're scratching your head, know this: The company took out a $20 billion bridge loan in March, which is due to be repaid by Sept. 2, 2027. So some of the company's coffers will be tapped to pay back that loan. And the rest? Here's a clue from the prospectus:
"We acquired xAI in February 2026, which forms the basis of our AI segment. We expect to allocate substantial capital to expand our compute infrastructure, and we expect a multiyear investment horizon before these deployments translate into sustained positive AI Segment Adjusted EBITDA... "
Anyone investing in SpaceX now should be quite confident that the company will successfully meet its artificial intelligence (AI) goals and that heavy spending will pay off with great profitability.
I'm not that confident. It could all turn out well, but the company is not even turning a profit at the moment, and it's spending heavily on AI -- as are many other companies. If it ends up borrowing more billions and/or issuing many more shares, that can hurt shareholders. Think of it like a pizza: You might own one piece of a pizza that's cut into eight pieces. But if it's cut into 12 pieces, each will be smaller. Similarly, stock dilution will reduce each share's claim on the company.
Should you invest in SpaceX? Personally, I am steering way, way clear of this stock. Here are a few reasons why:
First, its valuation is steep. Even after its recent fall, the company was worth about $2 trillion as of June 23. That's more than Oracle, Visa, Chevron, and GE Aerospace combined. Oracle recently reported about $64 billion in annual revenue, while Chevron's was $185 billion -- and SpaceX's was only $19 billion with a bottom line in the red.
Meanwhile, since it has no earnings, we can't check out its price-to-earnings ratio. So instead, look at its price-to-sales revenue: As of June 23, it was 77! In contrast, look at semiconductor and AI powerhouse Nvidia -- its price-to-sales ratio, also on the steep side, was just 20.
There are more reasons why you might be wary. For example, it's posting net losses rather than gains, and it's in a capital-intensive business that has to spend a lot on building and maintaining assets. It's also spending heavily on AI data centers.
For me, having Elon Musk at the top of the company is not a plus, as he has shown himself to be at least somewhat erratic, with his attention spread across many directions -- and now two companies -- SpaceX and Tesla. He's not the kind of leader I admire, who underpromises and overdelivers.
Let's return to that sagging stock price now. It's not sagging on its own. It's sagging because investors are selling.
SpaceX could do well in the long run, and if you really want to invest in it, I'd advise waiting for a much lower price. Right now, to me, it seems a very speculative proposition. Everything would have to go right for the company for it to reward shareholders rather than disappoint them.
The SpaceX stock price is displayed on a smartphone screen placed on a reflective surface onto which the company logo is projected, in Creteil, France, on June 19, 2026. The stock of SpaceX continues its consolidation phase on the New York Stock Exchange one week after its Nasdaq listing. (Photo by Samuel Boivin/NurPhoto via Getty Images)
NurPhoto via Getty Images
This article was written by Doug Nathman, with research by his team at Trefis.
Whether you hold him in high regard or cannot tolerate him, Elon Musk is poised to appear in your retirement savings.
Chances are, that decision was not made by you.
If you possess a 401K, a retirement account, or any index fund that includes the Nasdaq-100, SpaceX (SPCX) will be included in your holdings on July 6. In May 2026, Nasdaq implemented a rapid inclusion rule, allowing any company among the top 40 constituents of the Nasdaq-100 by market cap to enter just 15 trading days following its initial public offering. With a market cap of $2 trillion, SpaceX met the criteria immediately. An estimated $1.4 trillion in assets is connected to the Nasdaq-100, ensuring that every fund within that framework will inevitably purchase shares, irrespective of any manager's opinion on valuation.
The largest and most ambitious public offering in a generation is now integrated into the retirement plans of millions of Americans, whether they approve or not.
The Long-Term PerspectiveSpaceX has numerous advantages in its favor.
Starlink is already shaping up as a global telecommunications powerhouse without the drawbacks of traditional infrastructure and is on a trajectory to exceed $20 billion in annual revenue. Since 2023, no business customer paying over $750K annually has voluntarily terminated their service - indicative of a company with true pricing power and significant switching costs. The satellite launch sector is also robust, with costs slashed from $15,600 per kilogram for payload in 2008 to under $1,000 today. If Starship achieves complete reusability, new sectors such as orbital manufacturing and lunar logistics could become economically feasible as expenses diminish further. This is a firm promoting a vision over several decades of serving as the foundational layer for human advancement beyond Earth. For a patient investor, this narrative is credible.
Moving To The CautionsYou possess it at an inflated price. SpaceX continues to trade at approximately 100 times its trailing revenue and 200 times its trailing EBITDA for a company experiencing growth in the low-30% range. Our discounted cash flow analysis indicates a fair value estimation of around $79 per share, which suggests a valuation of approximately $1 trillion - roughly 40% below current valuations.
MORE FOR YOU
Several critical assumptions embedded in the present price appear overly optimistic. Starlink’s average revenue per user (ARPU) is decreasing as subscriber growth increasingly turns toward lower-income markets internationally. The satellite launch operation relies on profits from Falcon 9 being reinvested into Starship development, while Starship itself - having suffered five failures in 12 test flights as of June 2026 - has yet to prove dependable commercial functionality at scale. Additionally, underwriters have touted SpaceX AI as a significant future growth driver, but this segment remains very speculative, incurring nearly $8 billion in quarterly losses with limited distribution. Review how SpaceX's financials stack up against other publicly traded space firms such as Redwire (RDW) and Rocket Lab (RKLB).
The lockup period is stringent, with insiders potentially able to offload up to 44% of shares by early September, which could inflate the float by 900%. Interest rates may rise this year under a new Federal Reserve chair attempting to manage inflation currently at 4.2%, making long-term assets like SpaceX highly vulnerable to revaluation in that scenario. OpenAI and Anthropic are entering the market, and they will vie for the same investment capital. Explore SpaceX Stock: The Decline Isn't Finished.
Most investors who will soon have SpaceX shares did not investigate it, did not select it, and did not determine its value.
It will be added to their portfolios due to a change in an index rule that occurred just six weeks ahead of the IPO. This is exactly the kind of situation in which understanding your actual ownership becomes crucial.
Balancing passive investments in high-multiple, high-risk assets like SpaceX with reliable revenue-generating entities is how disciplined investors navigate the forthcoming volatility. While consistently outperforming the market is challenging, the Trefis High Quality (HQ) Portfolio is crafted to facilitate this goal. The HQ strategy has consistently surpassed its market benchmark since its inception, yielding cumulative returns exceeding 105 percent.
Space Exploration Technologies (SPCX 0.96%), or SpaceX, made its debut on the stock market through an initial public offering (IPO) on June 12. The Elon Musk-led company saw its shares surge by some 67% between its IPO and a June 16 peak -- but the story has changed. Shares were recently down nearly 20% over the past week, briefly dropping below where they started trading, at $150 per share.
Many times, when a stock drops sharply, there's an opportunity to assess whether the case for investing in the company has gotten stronger, thanks to a more compelling valuation. In this case, with SpaceX, I'd recommend you not bother doing so. Here's why.
Image source: The Motley Fool.
Why avoid SpaceX shares? The biggest knock against the stock is arguably its valuation. Given that the company is not turning a profit at this point, there's no price-to-earnings ratio to examine. So let's check out the price-to-sales ratio: It's 77 as of June 23! That's nosebleed territory. Consider, for example, that market darling Nvidia currently has a price-to-sales ratio of 20, and Micron Technology, which has soared more than 800% over the past year, has a price-to-sales ratio of 24. Numbers in the 20s are quite high already -- and SpaceX's 77 is far, far higher.
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If you're telling yourself that SpaceX will grow into that valuation, you're right -- it might. But it could take years, and it's currently priced for perfection. Once it shows signs of trouble, investors might flee, sending shares down. In other words, there's no margin of safety here.
Here's another issue: dilution. In the company's prospectus, prepared for its stock market debut, management noted, "We plan to access a range of debt and equity financing solutions available to us as a public company to fund future investments in growth and to maintain strong liquidity." In other words, the company is already planning to borrow money, after raising $85.7 billion through its IPO, and perhaps to dilute existing shares by issuing more shares. That's not music to investors' ears.
Indeed, it was recently reported that SpaceX has already raised $25 billion through a debt sale. When companies carry a lot of debt, it can restrict their options, as they are on the hook to repay that debt. Companies with much more debt than assets can end up in trouble, too. (SpaceX recently reported having more than $100 billion in cash.)
Overall, this stock is a no-go for me. There are plenty of exciting growth stocks out there with much more reasonable valuations, and I'm a fan of growth- and income-oriented ETFs, too.
LODZ, Poland, June 25, 2026 (GLOBE NEWSWIRE) -- BTCC, the world’s longest-serving crypto exchange, announced that its SpaceX futures (SPCX) achieved a record single-day trading volume of over 118 million USDT on June 16, 2026. The strong demand reflects extraordinary enthusiasm among traders for SpaceX's public debut.
SpaceX Futures Drive Unprecedented Demand
The peak volume of 118 million USDT on June 16, 2026 represented 18 times the pre-IPO trading volume, a milestone that reflects the outsized appetite traders have shown for exposure to one of the most anticipated listings in recent years. Since going live on the BTCC platform, SPCX has become one of the most actively traded instruments on the exchange.
To mark the occasion of SpaceX going public, BTCC has launched a dedicated SPCX trading campaign offering users the chance to enter a lucky draw to win a Tesla Cyberbeast. Full details on registration and prizes are available on the BTCC’s official campaign page.
The surge in SpaceX futures activity also reflects the broader success of BTCC's TradFi offering, which launched in February 2026 and has grown into one of the exchange's most popular features. To further lower the barrier to entry, BTCC has reduced trading fees across its futures pairs and introduced a zero-fee campaign, making it easier than ever for users to access traditional financial instruments on a crypto-native platform.
June 2026 Proof of Reserves Reflects Financial Strength
Alongside this trading milestone, BTCC published its Proof of Reserves report for June 2026. The latest report confirms a total reserve ratio of 147%, which is well above the industry benchmark for full asset backing. Individual asset reserve ratios are as follows:
BTC: 125%XRP: 164%ETH: 149%USDT: 162%USDC: 114%ADA: 170% For details about the full proof of reserves data, please visit BTCC’s official website.
About BTCC
Founded in 2011, BTCC is a leading global cryptocurrency exchange serving over 11 million users across 100+ countries. As the official regional sponsor of the Argentine Football Association (AFA) and with NBA All-Star Jaren Jackson Jr. as its global brand ambassador, BTCC offers secure and accessible cryptocurrency trading services, focused on delivering a user-friendly experience while adhering to applicable regulatory standards.
SpaceX (SPCX 1.27%), Rocket Lab (RKLB 3.77%), AST SpaceMobile (ASTS 4.97%), and Planet Labs (PL 1.14%) are riding the booming space economy, but in a costly (and riskly) launch market, investors are shifting attention to infrastructure, satellite connectivity, and recurring space-based data revenue. Watch to find out what investors need to know.
*Stock prices used were the market prices of June 19, 2026. The video was published on June 24, 2026.
Rick Orford has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Lab. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
After raising $86 billion two weeks ago with its record-breaking initial public offering (IPO), Space Exploration Technologies (SPCX 0.97%) is planning to issue $20 billion worth of bonds. The company -- also known as SpaceX -- has already announced two new deals since the IPO, including the acquisition of artificial intelligence (AI) coding company Cursor, and a deal with open-source model company Reflection AI, which will rent data centers for $6 billion.
The company is in motion, and clearly, it has a lot more planned. What does this mean for shareholders?
SpaceX is raising money, again In the press release about the debt issuance, management said it would use the proceeds to pay off a bridge loan and that anything remaining would be used for general corporate purposes. It's issuing notes, which have shorter maturities than bonds, and it's targeting institutional buyers and investors outside the U.S. The notes are unsecured, meaning they have no collateral to back them up.
Image source: Getty Images.
Most glaringly, but unsurprisingly, management pointed out that the notes "rank equally in right of payment with all existing and future unsubordinated indebtedness, liabilities and other obligations of SpaceX." That means they rank ahead of the shiny new SpaceX shareholders in the order of payments. So while they don't dilute shareholder value, they do take precedence, although that's mostly limited to an unlikely bankruptcy.
Since SpaceX is using the cash from the IPO to make important purchases to grow its business, it's using the notes to reorganize its debt instead. The bridge loan for $20 billion comes due in September 2027, and this gets it out of the way.
Management had said in its original filings that it may seek to issue notes to pay it off, and said that it has sufficient funding to operate for the next 12 months. Unless something changes, it isn't likely to keep raising money in the short term.
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So no, I wouldn't say this spells trouble for shareholders; it's a fairly common financial tactic. They should be more wary of SpaceX's spending and net loss. All of the hyperscalers have been spending at a fast clip to stay in the AI race, and SpaceX is doing the same for its AI segment, xAI.
Management sees its greatest market opportunities in AI, which is losing money rapidly today; it reported a $2.5 billion loss on $818 million in sales in the first quarter and $10 billion in capital expenditures.
SpaceX enthusiasts, in fact, might be excited about all of the money raised because it indicates momentum and potential.
Item 1 of 3 A live feed shows SpaceX CEO Elon Musk on the day of SpaceX's initial public offering (IPO) at the Nasdaq MarketSite, in New York City, U.S., June 12, 2026. REUTERS/Jeenah Moon//File Photo
[1/3]A live feed shows SpaceX CEO Elon Musk on the day of SpaceX's initial public offering (IPO) at the Nasdaq MarketSite, in New York City, U.S., June 12, 2026. REUTERS/Jeenah Moon//File Photo Purchase Licensing Rights, opens new tab
SummaryCompaniesApple and Microsoft to appear in both value and growth categoriesIncreased trading volume expectedFirst of two Russell reconstitutions this yearNEW YORK, June 25 (Reuters) - Investors expect heavy trading volume on Friday to reflect changes to the Russell indexes, including reclassifications for megacaps like Microsoft (MSFT.O), opens new tab and the Russell 1000's "fast-track" addition of SpaceX (SPCX.O), opens new tab following the recent IPO.
Fund managers will adjust their portfolios to reflect new weightings in various indexes being reorganized by FTSE Russell in one of its biggest shifts on record.
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For the first time in over 30 years, the Russell indexes will be reconstituted twice this year, June and December, instead of just once. The reshuffling will also bring big changes for small-cap stocks. Dozens of smaller firms are moving from small-cap to larger indexes.
This week's reconstitution could mean a "really massive trade" on Friday, said Steven DeSanctis, an equity analyst at Jefferies in New York. "And the turnover is dramatic. That does argue for twice a year." Index changes take effect after the U.S. market close on Friday. Trading begins the following Monday.
SpaceX stock will be classified as about 90.4% growth and 9.6% value, which means it will become a big part of growth investments tied to the Russell 1000. Other major stocks affected will be Apple (AAPL.O), opens new tab and Microsoft (MSFT.O), opens new tab, which will be in the Russell 1000 value (.RLV), opens new tab and growth (.RLG), opens new tab indexes instead of just growth.
Historically, an index rebalancing has driven up volumes just before the changes take effect. Also, such moves have affected performance for companies moving from small-cap to larger-cap indexes.
Fresh off the SpaceX IPO, investors will keenly watch how FTSE Russell handles adoption of the fast-entry rule for IPOs which it announced in late May. IPOs of AI companies OpenAI and Anthropic are anticipated later this year.
The NYSE this week issued its customary alert to investors because of the Russell index reconstitution. Catherine Yoshimoto, director of product management for the Russell US Indexes at FTSE Russell, said the June reconstitution brings "no major rule changes" for the indexes.
The total reconstitution day trade is estimated at nearly $150 billion, which is why Friday is a "key liquidity day," said Melissa Roberts, analyst at Stephens.
The reshuffle will move Amazon.com (AMZN.O), opens new tab further into value territory, while Alphabet (GOOGL.O), opens new tab and Advanced Micro Devices (AMD.O), opens new tab are transitioning to 100% growth and are among the largest removals from the Russell 1000 Value index.
"These companies have gotten larger. They are the market," said Krishna Chintalapalli, portfolio manager at Parnassus Investments in San Francisco. Some of the changes reflect the ongoing strength in semiconductor and computer hardware companies tied to optimism over AI, according to FTSE Russell. For instance, Micron Technology (MU.O), opens new tab and SanDisk (SNDK.O), opens new tab are being added to the Russell 1000 growth index. Goldman Sachs strategists predicted in a recent note that within the Russell 1000 growth index, semiconductor stocks will experience the largest increases in weight. Some 62 companies are to join the large-cap Russell 1000 index(.RUI), opens new tab, including 43 moving up from the small-cap Russell 2000 (.RUT), opens new tab. The largest chunk of the new Russell 1000 members are coming from technology and industrials. "This year we have a higher turnover of names that have done really well in the 2000 that are moving up to the 1000," Roberts said. "The strength in those names has pushed them up."
One dramatic shift is with Bloom Energy (BE.N), opens new tab, which is moving from the Russell 2000 index to the Russell 200 megacap index (.RT200), opens new tab of the 200 largest U.S. companies. The power generation company's stock is up more than 1000% from a year ago thanks in part to agreements to supply power to AI data centers.
Reporting by Chuck Mikolajczak and Caroline Valetkevitch in New York, editing by Colin Barr and David Gregorio
Our Standards: The Thomson Reuters Trust Principles., opens new tab
HomeInvestingStocksOutside the BoxOutside the BoxOverhyped IPOs are usually terrible bets. That doesn’t mean the bull market is over.Published: June 25, 2026 at 7:50 a.m. ET
SpaceX stock, put simply, is not a good buy. And whenever OpenAI and Anthropic come to market with their highly anticipated IPOs, those shares won’t be good buys either.
That distinction matters, because the commentary around these mega-IPOs has become lazy and predictable. The script is always the same: The valuations are absurd, the companies are unprofitable and public investors are exit liquidity for billionaires like SpaceX’s Elon Musk and OpenAI’s Sam Altman.
Space Exploration Technologies (SPCX 0.97%) hasn't even spent two weeks on public markets. And already, it has proven to be a highly volatile stock -- briefly surpassing Microsoft and Amazon in market cap before falling 32% from its all-time high at the time of this writing.
SpaceX is now up just 15% from its initial public offering (IPO) price of $135. Here's how the sell-off could affect the number of shares available and whether SpaceX is a good growth stock to buy now.
Image source: Getty Images.
SpaceX is dipping its toes into public markets SpaceX's float, which is the number of shares available for public trading, makes up roughly 5% of its outstanding shares. The vast majority of SpaceX stock is still held by insiders through restricted stock units and Early Release Eligible Shares. While insiders like Elon Musk have agreed not to sell their shares until after a 366-day lockup period, SpaceX has a tiered approach for allowing the sale of Early Release Eligible Shares held by employees and pre-IPO institutional investors.
SpaceX has been a private company for over two decades, and throughout its history, it has sold stock in several funding rounds. For now, those shares are locked up. And the fear is that once these early investors can sell at a price several times what they paid, SpaceX will come under intense selling pressure.
The first wave of unlocking Early Release Eligible Shares will come on or after the second full trading day following SpaceX's earnings release for the quarter ended June 30, 2026, when 20% of Early Release Eligible Shares may be sold. Even if a small portion of these shares is sold, it could drastically increase SpaceX's float.
SpaceX specifies in its Form S-1 filing with the Securities and Exchange Commission that an additional 10% of Early Release Eligible Shares may be sold on or after the second full trading day following its upcoming earnings report if SpaceX's stock price is at least 30% higher than its IPO price -- meaning $175.50 per share -- for at least 5 of the 10 trading days leading up to and including the earnings release date. SpaceX was well above that level a few sessions ago, but Monday's sell-off has pushed it below that critical threshold.
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Gradually unlocking Early Release Eligible Shares Even if SpaceX remains below $175.50 per share, its float could still significantly increase in the coming months.
An additional 7% of Early Release Eligible Shares can be sold 70, 90, 105, 120, and 135 days after the IPO, another 28% of shares in the second full trading day after the earnings release for the three months ended Sept. 30, 2026, and then all Early Release Eligible Shares may be sold 180 days after the IPO.
Date
Early Release Eligible Shares Available For Sale
2 days after the release of the quarter ended June 30 earnings
20% or 30%*
Aug. 31
7%
Sept. 10
7%
Sept. 25
7%
Oct. 10
7%
Oct. 25
7%
2 days after the release of the quarter ended Sept. 30 earnings
28%
Dec. 9
100%
*If SpaceX is above $175.50 per share for five of the 10 trading days leading up to and including the day of its earnings release for the quarter ended June 30, 2026. Date source: Securities and Exchange Commission.
The key takeaway is that, regardless of SpaceX's price, its float could significantly increase in August and September. However, even when 100% of Early Release Eligible Shares can be sold on Dec. 9, there's a chance that insiders could still hold more SpaceX shares than the public if insiders decide not to sell.
SpaceX's impact on ETFs SpaceX may have gone public on June 12, but investors have only caught a glimpse of the real demand for the stock, given that so much of its supply is still locked up. This summer marks the true test for SpaceX. With more shares hitting public markets, it remains to be seen whether selling pressure will outweigh buying demand. Whereas in the first few days after SpaceX went public, demand outweighed supply.
What's more, we have yet to see the full extent of SpaceX's impact on exchange-traded funds (ETFs) -- which could unlock a ton of demand. While SpaceX will have to wait until at least June 2027 to be added to the S&P 500 (^GSPC 0.10%), it could receive fast-track entry into the Nasdaq-100 in July. The Nasdaq-100 is the 100 largest non-financial stocks listed on the Nasdaq.
SpaceX's weight in the Nasdaq-100 will be based on a multiple of its float rather than its market cap. But even with a lower weighting than its value, SpaceX's addition to the Nasdaq-100 would prompt ETFs whose benchmarks are the Nasdaq-100 and growth-focused ETFs to automatically begin buying the stock. SpaceX could also become a top holding in ETFs that track the stock market sector it is added to.
With market dynamics driving SpaceX's price action rather than its underlying investment thesis, long-term investors may want to wait until public markets digest SpaceX before buying now, even after its latest sell-off.
Elon Musk's Space Exploration Technologies (SPCX 0.97%) made its market debut on June 12. It was the largest initial public offering (IPO) in history by two different measures. The company raised a record $75 billion, and the stock started trading with a record market capitalization of nearly $1.8 trillion.
SpaceX shares hit an all-time high of $202 on June 16, representing 50% upside from its IPO price of $135. That brought its market value to $2.6 trillion. But the stock has since tumbled 23% to $156 as of June 23.
Wall Street sees that as a buying opportunity. The median target price (from eight analysts) is $238.50 per share, implying 53% upside from the current price. But history says SpaceX stock will decline sharply in the coming months.
Image source: Getty Images.
History says SpaceX stock could drop sharply in the coming months IPO stocks frequently pop on the first trading day. Since 1980, more than 9,000 companies have listed shares on U.S. stock exchanges, and their share prices increased by an average of 19% on day one, according to Jay Ritter, finance professor at the University of Florida.
SpaceX fit that pattern perfectly. The stock closed 19% higher on the first trading day. But its recent backslide fits another historical pattern. Large IPOs have typically dropped sharply during their first year on the public market. The following chart illustrates that point. It includes the 15 largest U.S. IPO stocks (by market value at the IPO price) since 2006.
IPO Stock
Return During First Year
Max Drawdown During First Year
Meta Platforms
(31%)
(54%)
Uber Technologies
(21%)
(64%)
Rivian Automotive
(67%)
(80%)
Coinbase Global
(55%)
(55%)
Venture Global
(59%)
(75%)
Coupang
(62%)
(63%)
General Motors
(36%)
(42%)
Airbnb
25%
(14%)
Visa
0%
(25%)
Kenvue
(29%)
(32%)
DoorDash
(13%)
(40%)
Rocket Companies
(19%)
(23%)
UiPath
(74%)
(74%)
Snowflake
27%
(26%)
Robinhood Markets
(74%)
(80%)
Average
(33%)
(50%)
Data source: First Trust, Bloomberg.
Among the 15 largest IPOs in the past two decades, the average stock fell 50% from its IPO price at some point during the first year. And the average stock was still 33% below its IPO price at the end of the first year.
What does that mean for SpaceX? If its performance aligns with the historical average, the stock will fall 50% to $67.50 per share at some point during the first year. In addition, the stock will still trade 33% below its IPO price (implying $90 per share) by the end of the first year.
There is one more thing investors should know. A buy-and-hold strategy is usually the best way to profit in the stock market, but it hasn't worked for large IPOs. The 15 stocks shown in the chart have underperformed the S&P 500 (^GSPC 0.10%) by a median of 129 percentage points since listing shares.
In short, rather than participating in those IPOs, investors would have made more money by simply buying an S&P 500 index fund. That doesn't mean SpaceX will always be a bad investment. Instead, it means investors should wait for a more attractive buying opportunity.
Here's an example: Snowflake has underperformed the S&P 500 by 150 percentage points since listing shares in September 2020. But Snowflake has outperformed the S&P 500 by more than 20 percentage points since June 2024. Investors who waited for a better entry point have been rewarded with market-beating returns.
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SpaceX stock trades at an absurdly expensive valuation Admittedly, historical patterns don't dictate how any stock performs. Past results are no guarantee of future returns. But there is another reason to think SpaceX shares are headed lower in the future.
SpaceX's revenue totaled $19.3 billion in the past four quarters. Given its current market value of $2 trillion, the stock has a price-to-sales ratio of 104. That is absurdly expensive. For context, Palantir Technologies has the highest valuation in the S&P 500 at 55 times sales. That makes SpaceX nearly twice as expensive as the most richly valued stock in the index. That is unsustainable.
Here's the big picture: SpaceX stock is down 23% from its post-IPO peak, but history says shares have much further to fall. In addition, even if you ignore the historical data, SpaceX stock is absurdly expensive.
Trevor Jennewine has positions in Palantir Technologies and Visa. The Motley Fool has positions in and recommends Airbnb, DoorDash, Kenvue, Meta Platforms, Palantir Technologies, Rocket Companies, Snowflake, Uber Technologies, UiPath, and Visa. The Motley Fool recommends Coinbase Global, Coupang, and General Motors. The Motley Fool has a disclosure policy.
Ark Invest CEO Cathie Wood has once again placed an aggressive bet on a company led by Elon Musk. On June 12, Wood's investment firm bought 3.3 million shares in the Space Exploration Technologies (SPCX 0.97%) IPO across several of the firm's exchange-traded funds (ETFs).
Just 10 days later, Ark added another 210,121 shares across the Ark Innovation (ARKK +0.05%), Ark Autonomous Technology & Robotics (ARKQ 1.69%), Ark Next Generation Internet (ARKW 1.58%), and Ark Space & Defense Innovation (ARKX 1.89%) funds as SpaceX stock lost some momentum. These purchases reflect Wood's signature style of doubling down on long-term technological disruption during periods of short-term weakness.
Let's see whether smart investors should follow Wood's lead and buy the dip in SpaceX stock right now.
Image source: Getty Images.
Breaking down Ark's SpaceX position SpaceX now appears across four of Ark's ETFs. On June 12, ARKK acquired 1,690,839 shares, ARKQ bought 736,442 shares, ARKW added 325,562 shares, and ARKX purchased 538,341 shares. On June 22, the buying continued across all four of these funds.
The consistent presence of SpaceX across ARKK, ARKQ, ARKW, and ARKX suggests that Wood is spreading exposure while still concentrating capital among her highest-conviction names.
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Wood's decision to purchase SpaceX stock both on its IPO day and after the sell-off likely stems from her long-standing admiration for Musk's ability to execute ambitious visions in capital-intensive industries. For years, Wood has repeatedly expressed an abnormally high conviction in Tesla (TSLA 1.61%) -- maintaining a large position in the electric vehicle (EV) stock through multiple drawdowns. Wood believes that Tesla will ultimately come to dominate autonomous transportation through its robotaxi program.
At its core, Tesla represents the kind of step-change technology Wood seeks in her portfolio. SpaceX fits the same pattern. Reusable rockets, low-orbit satellite constellations, and an aggressive expansion into artificial intelligence (AI) infrastructure could unlock trillions in economic value over the coming decades.
When SpaceX sold off after the initial IPO pop, Wood appears to have viewed the weakness as an opportunity to buy shares at a lower valuation, rather than as a signal to retreat. Ark's history shows that it's willing to tolerate volatility in growth stocks, as long as the underlying innovation thesis remains intact.
Should you buy the dip in SpaceX stock? Retail investors considering following Wood's lead must weigh both the pros and cons of investing in SpaceX stock right now. On the positive side, Wood's early and persistent Tesla position has delivered multibagger returns as she stayed the course for many years. Given SpaceX's competitive edge in launch and satellite services, buying shares after an IPO-related sell-off could capture value if the company's long-term narrative holds.
However, Ark funds themselves have experienced sharp drawdowns when sentiment around concentrated bets sours.
ARKK data by YCharts.
SpaceX carries unique risks related to the regulatory environment, competition from other launch providers, and execution challenges on ambitious AI-related timelines. Investors who lack Wood's research resources, multi-year time horizon, and tolerance for double-digit percentage swings may find it more prudent to gain indirect exposure through diversified space or technology-themed funds, rather than replicating the exact Ark playbook.
Ultimately, mirroring any single money manager's concentrated position requires matching both their conviction and their risk tolerance. In my eyes, the better play right now is to let SpaceX's volatility play out and watch from the sidelines. Investors will have many more opportunities to buy company shares, both directly and indirectly through passive funds, over time.
After weeks of anticipation, Space Exploration Technologies (SPCX 1.01%) pulled off the biggest IPO in market history.
Elon Musk's space company raised $75 billion in its public offering, and the stock soared in its opening days, jumping from an IPO price of $135 to a peak of $225.64, reaching a market cap of nearly $3 trillion.
Since then, the stock has cooled off and has settled in a range of around $150-$160 a share over the last two days. Trading volume and interest remain sky-high more than a week after the IPO. On Tuesday, its lowest-volume day, roughly $20 billion worth of SpaceX stock changed hands.
Though the company is already one of the most valuable in the world, some SpaceX bulls believe the stock can move significantly higher over the long term. Fund manager Ron Baron said that SpaceX could be a $20 trillion or even $30 trillion company by 2040.
SpaceX itself hasn't been shy about making bold predictions, saying its actionable total addressable market is $28.5 trillion, the largest in human history. Most of that is made up of AI enterprise applications, which have yet to be developed.
SpaceX has also identified future markets like point-to-point terrestrial travel, space tourism, in-orbit manufacturing, asteroid mining, and transporting passengers and cargo to the moon and Mars.
Those are a set of opportunities that no other company can claim, and the company also differentiates itself with its mission to "make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars."
Image source: Getty Images.
With a valuation already at $2 trillion, the upside potential for SpaceX is not as strong as most IPOs. SpaceX can't be Tesla, which went public in 2010 and has since returned 23,000%, turning $1,000 into roughly $230,000, as it accomplished its primary goal of taking electric vehicles mainstream.
With a valuation that's already $2 trillion, SpaceX is up against the law of large numbers. The valuation can't mathematically grow by 230 times because that would make it bigger than the global economy, which currently has a GDP of $123.6 trillion.
The company's addressable market, which seems fanciful, faces a similar obstacle: it's nearly as large as U.S. GDP.
At its current valuation, if SpaceX tripled, it would be the most valuable company in the world, surpassing Nvidia, which is currently worth around $5 trillion. To deliver the kind of returns that would make investors millionaires, in other words, SpaceX would almost certainly have to become the most valuable company in the world by a wide margin.
As tech stocks have become ascendant, the valuation of the most valuable company in the world has increased significantly, jumping from before the financial crisis to more than 10 times its value today.
However, repeating that will be difficult as Nvidia already represents about 8% of the value of the S&P 500, and increasing that percentage won't be easy.
Currently, market concentration in the top tech stocks is unusually high, and the S&P 500 is also near its most expensive level ever, according to metrics like the CAPE ratio.
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What it means for SpaceX stock In order for SpaceX to deliver the kind of returns, 10x or more, that could make ordinary investors millionaires, it would have to become far and away the most valuable company in the world.
I don't think that's impossible, but the company is so far away from executing on the kinds of things it would need to do to accomplish that, like interplanetary travel, that it seems highly unlikely.
Investors looking for millionaire-maker stocks are better off targeting companies with smaller market caps that can 10x without bending the traditional limits of math.
SpaceX did make plenty of millionaires, but it did so in the private markets. By not going public until it reached a valuation of nearly $2 trillion, the company has left a limited opportunity for retail investors.
Space Exploration Technologies (SPCX 1.01%), better known as SpaceX, is one of the hottest initial public offerings (IPOs) ever. So it's not surprising that both investors and fund managers are scrambling to get their hands on shares.
Some of the professionals take that desire to extremes. Most index funds have rules that govern how quickly they can add IPO shares and how much they can buy. Actively managed funds don't have those constraints. That means managers can take big home run swings quickly if they choose.
Image source: Getty Images.
The Baron First Principles ETF (RONB +0.47%) is one such fund. Its legendary head portfolio manager, Ron Baron, has put a massive 31% of the fund's assets in SpaceX, easily the largest allocation made to this stock in any ETF (exchange-traded fund).
The fund invests in what the company calls "first principles" businesses, those considered innovative companies pursuing large, disruptive opportunities. SpaceX certainly fits the bill. But the big question at this allocation is how much is too much.
I'm not sure this is ultimately about investment strategy as much as it is about grabbing assets. Prior to SpaceX's IPO, investors were looking for any means possible to get access to shares in the private markets. The Baron First Principles ETF offered that. By ratcheting up the exposure, it offered investors what few could -- a sizable allocation to SpaceX.
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While that might be appealing to investors, it's not a sound strategy for the fund. By taking such a significant position in a single company, it runs the risk of a deep drawdown and heightened volatility should investors decide that valuation, company execution, or financial performance is questionable.
The fund's lack of diversification means it doesn't belong in the core of a portfolio. The short operating history means investors don't have a good handle on how the fund will perform in different economic cycles, either.
It all makes for an interesting ETF story, but not so much a long-term investment.
David Dierking 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.
Markets are currently experiencing a "very healthy" reset, argues David Trainer. He says companies like Meta Platforms (META) and SpaceX (SPCX) raising debt to fund AI woke investors up and made them reevaluate.
Elon Musk's Space Exploration Technologies (SPCX 1.01%) went public on June 12. In the days since, SpaceX stock has given investors a textbook example of what happens when a widely anticipated initial public offering collides with the laws of supply and demand.
SpaceX priced its shares at $135 and had a goal of raising $75 billion from the offering. The stock opened its first session on the Nasdaq at $150 and closed that day around $161. By June 16, it had surged to an intraday peak of $225.64.
Eventually, though, that early excitement cooled, and SpaceX stock started to give back its gains. By Tuesday morning, it had even moved briefly below that initial $150 price, but by mid-afternoon, shares were hovering around $161 again.
While the opening act is over, what comes next for SpaceX investors will be considerably more complicated.
Image source: Getty Images.
SpaceX's second-quarter earnings are right around the corner While no official date has yet been set for the release of its first quarterly earnings report as a public company, SpaceX is expected to deliver it sometime in late July or early August. While the company's financials will matter, its top- and bottom-line figures won't be the first thing that smart investors are looking at.
SpaceX's first earnings release will be something more than just the usual financial readout: It will trigger the expiration of the lock-up period for the first tranche of insider stock holdings. And when those insiders can start selling a meaningful slice of their SpaceX shares, the changes to the supply-and-demand dynamics that result could be far more consequential than anything the company's income statement will show.
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Understanding SpaceX's lock-up agreement Most of the time, IPOs are governed by rules that prevent insiders and early investors from cashing out as soon as the companies involved become public. These restrictions mean that board members, C-suite executives, and private equity investors must wait for a certain amount of time -- 90 or 180 days, for example -- following the IPO event before they can sell shares.
SpaceX structured its lock-ups with phased releases tied to the company's earnings dates and rolling time-based milestones. Notably, specific provisions are in place that block Musk and a few other large stakeholders from selling any of their SpaceX stock until next summer at the earliest.
Per the company's S-1 filing, most SpaceX investors will be allowed to sell up to 20% of their shares -- about 911 million shares in total -- starting the second full trading day following the Q2 earnings release.
That percentage would rise to 30% if SpaceX stock trades above $175.50 (30% above the IPO price) for at least five of the 10 days prior to the earnings report. After that, smaller phased releases will occur every few weeks. The goal of this tiered approach was to avoid flooding the market with too many shares in a narrow window, and thus spread out potential downward pressure on the stock price.
In the table below, I've forecast what could happen to SpaceX stock depending on how many holders choose to sell following the first lock-up expiration.
Percentage of Eligible Insider Shares Sold in Tranche 1Number of Shares SoldVolume Multiplier
(Shares Sold/Daily Volume)Base Price DeclineModerated Price DeclineProjected Stock Price10%91 million.31x3.1%2.3%$15720%182 million.63x6.3%4.7%$15330%273 million.94x9.4%7.1%$15050%456 million1.58x15.8%11.9%$142100%911 million3.15x31.5%23.6%$123 Data source: SpaceX S-1 Filing, Yahoo! Finance.
Here is how the math shown above works:
Shares sold takes the percentage of holders and multiplies it by the maximum number of shares that could become available. Number of shares sold is divided by SpaceX's average daily trading volume -- 289 million shares as of this writing -- to estimate how many days' worth of selling this represents. The volume multiplier is multiplied by 10% to derive the base price drop. I estimate that each day of selling represents a 10% decline. I then reduce the base price decline by 25% to make it more realistic, as selling pressure will likely occur over several days instead of all at once. Moreover, the earnings report could attract a new cohort of buyers who support SpaceX's price floor. The moderated price decline is applied to SpaceX's current share price of about $161 to arrive at an estimated post-report value. The verdict: Now is not the right entry point for SpaceX stock I think the period leading up to SpaceX's first earnings report represents the highest-risk window the stock will face this year. Investors who buy SpaceX today are paying a premium for the privilege of absorbing a supply shock that was already telegraphed in the company's pre-IPO filings.
While SpaceX's underlying businesses -- in particular Starlink and the fast-growing AI infrastructure segments -- have genuine, durable value, the stock's sensitivity makes it an abnormally risky bet right now. Despite the company's inspiring long-term story, its ambitions do not change the arithmetic of what can happen when nearly 1 billion shares become eligible to be added to a previously small public float.
I don't actually think all 911 million shares will get sold by their current holders in the days following that earnings report, of course. But my speculation is that about 30% will be. If that proves accurate, and my math does as well, we can expect to see the stock slide all the way back to its initial trading price of $150. And there's a high risk of it falling even further as investors digest the earnings report results, and as subsequent lockup tranches expire.
The prudent move would be to wait for SpaceX to report earnings and then observe how the stock reacts to the first unlock. After that, retail investors can look for more reasonable entry points once the dust settles.
HomeIndustriesAerospace/DefenseInvestors are seeing ‘the reality now of owning a very volatile space stock’Published: June 24, 2026 at 4:04 p.m. ET
The first pure-play exchange-traded fund focused on space is about to have its worst month since in six years, despite what some thought would amount to heightened interest in the industry around SpaceX’s initial public offering.
The Procure Space ETF UFO has tracked the space sector since 2019. In May, a few weeks before SpaceX’s SPCX IPO, ProcureAM CEO Andrew Chanin spoke favorably of what SpaceX could mean for public consciousness around the business of space.
The hype around Space Exploration Technologies (SPCX 1.01%) and its initial public offering (IPO) has been out of this world. It is officially the largest public debut in history, in terms of valuation and capital raised.
It seems like everyone wants to own a piece of SpaceX. Yet the contrarian investor knows that this is a flashing warning sign to run for the hills and avoid buying SpaceX stock. Here's why the IPO hype may be setting up investors who hold this highly unprofitable space economy and artificial intelligence (AI) stock for disappointment over the next few years.
Image source: Getty Images.
Unprofitable growth and massive loss risks SpaceX has massive potential if you take its projected addressable markets of trillions of dollars at face value. Elon Musk himself said that SpaceX may generate $1 trillion in revenue by 2030.
This is a far-off goal relative to the 2025 revenue level of $18.7 billion. On this revenue, SpaceX posted a $5 billion net loss, mainly due to its aggressive investments in AI data centers and in developing its Starship rocket. To reach $1 trillion in revenue by 2030, it will need to deliver north of 100% revenue growth each of the next five years.
2026 growth looks promising, with $26 billion in contracts SpaceX has secured from Alphabet and Anthropic for AI data center computing. However, this is not coming from a position of strength, as these data centers for its xAI division were intended for internal use. Now it is reselling this power, likely at a loss, to its competitors.
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Why SpaceX stock will disappoint investors Overall, SpaceX stock is poised to disappoint investors due to its massive initial valuation. One could argue that SpaceX is a good business due to its dominance in rocket flight, the highly profitable Starlink internet service, and its call option in AI.
However, the stock is getting a huge premium right now. It is now trading at a market cap of $2 trillion, or a price-to-sales ratio (P/S) of more than 100, based on 2025 revenue. Plus, SpaceX is posting massive losses that are only growing in 2026, with free cash flow of negative $9 billion in the first quarter alone. If this continues, it is going to run out of the $85 billion it raised from the IPO in around two years.
Even if SpaceX succeeds in building its Starlink internet, Starship, and orbital data center businesses, the stock is already pricing in all of this and more. If the company falters, this massive cash burn will hurt shareholders. In either scenario, SpaceX's stock is bound to disappoint investors who buy today.
A friend of Paula Pant’s bought SpaceX (NASDAQ:SPCX) at $171, sold at $191, and walked away with roughly $400 to $500 in profit. Then he walked away convinced that stock-picking is easy. On a recent Afford Anything Q&A, financial commentator Joe Salci summed up the problem in four words. “He learned the wrong lesson,” Salci said.
That sentence is the personal-finance lesson of the SpaceX IPO, compressed. The trade worked. The decision was still bad. And if you internalize the win without understanding the math behind it, the next trade is the one that funds somebody else’s vacation home.
The verdict before the math Salci and Pant are right, and the reasoning matters more than the call. A profitable trade does not validate the process that produced it. “Sometimes it works out, and that doesn’t mean that it was a good idea,” Pant said on the show. This is survivorship bias dressed up as a brokerage statement. You see the friend who flipped SpaceX for a few hundred bucks. You do not see the dozens of retail buyers who chased about $202 a week ago and are now looking at about $158.
One IPO doubled 71 others combined Salci’s framing is the cleanest illustration of why this IPO is structurally different from the ones around it. “That IPO raised $75 billion. Get this, there were 71 other IPOs since January 1st. Combined, they raised $35 billion. One IPO doubled the amount of the other 71 IPOs,” he said.
Sit with that. SpaceX is the outlier that distorts the average for IPOs. If a retail investor concludes from SpaceX that IPOs print money, they are generalizing from a single data point that is, by the speakers’ own numbers, larger than the rest of the 2026 IPO calendar put together. The base rate for new listings looks like a coin flip with worse odds, longer lockups, and institutions on the other side of your trade.
The price action since launch makes the point in dollars. SPCX fell 23% in a single week, from June 16 to June 23. Reddit’s sentiment score on the name collapsed from a peak of 75 on June 13 to 17 on June 18, when the dominant thread was titled “SPCX – Beware, institutional money is NOT buying this trash on the open market.” The friend who sold at $191 looks brilliant. Anyone who bought from him looks like a cautionary tale.
The variable that decides whether this hurts you The single factor that determines whether a SpaceX-style trade is harmless or ruinous is the job the money was supposed to do. Salci and Pant were responding to a caller holding individual stocks inside a short-term house fund, which both flagged as clearly wrong. That is the variable. Time horizon.
Run the two scenarios. A 28-year-old puts $5,000 of long-dated retirement money into SPCX, watches it drop 22% in a week, and waits. The portfolio has 30 years to recover, and the dollars were never earmarked for a near-term goal. A 33-year-old puts a $40,000 down payment into the same trade three months before closing on a house. A 22% drawdown becomes a canceled offer.
The instrument did not change. The job changed. Short-term money belongs in instruments that match short-term liabilities. T-bills, money market funds, or a high-yield savings account, not an IPO trading on hype that hasn’t cleared its lockup.
What to actually do Use the SpaceX moment to pressure-test your own setup with three specific moves.
List every dollar you’ll need in the next 36 months. Down payment, tuition, tax bill, wedding. If any of it sits in single stocks or recent IPOs, move it into cash equivalents this week. For the long-term bucket, compare your IPO trade to the boring alternative. SPDR S&P 500 ETF (NYSEARCA:SPY) charges 0.0945% a year and gives you fractional ownership of hundreds of leading U.S. companies. Your edge over that benchmark is the thing you have to justify, not assume. Write down the thesis before the trade and the exit before the entry. If the only reason you can articulate is “it went up for my friend,” that is survivorship bias talking, and Salci already named the cost. “Huge risk for non-life-changing returns.” The friend who made $400 on SPCX sampled one outcome from a distribution he never saw. The real lesson is that a good outcome and a good decision are different things, and confusing them is how everyday investors fund the next bubble.
SpaceX (NASDAQ:SPCX) gave back roughly 16% over three consecutive sessions, and the proximate cause was almost embarrassingly mechanical. The company that just IPO’d into a $1.23 trillion market cap announced it intended to sell investment-grade bonds for the first time, only weeks after raising equity. Saxo Bank’s UK Investor Strategist Neil Wilson, speaking to Lizzy Burden on Bloomberg Daybreak Europe Tuesday, argued the move says more about how today’s mega-cap tech trades than about SpaceX’s balance sheet.
Why the SpaceX bond announcement broke the tape Wilson’s read was that the selloff started with index plumbing. “Part of the factors behind the move was at the end of last week, some of the passive funds were positioned into the index positioning,” he said. According to him, SpaceX was “coming back to the market so quickly after raising money through equity to say they are looking for debt investment as well.” Passive vehicles can’t gracefully absorb two trips to the capital markets in close succession. This is especially true if you involve a company whose equity story is built on scarcity. They rebalance on schedule, not on narrative.
Burden framed the damage on air, noting SpaceX shares were “slipping for a third straight day, shedding hundreds of billions of dollars of value.” The price action confirms it. SPCX fell 19.69% over the week ending June 22, from $192.50 to $154.60, before bouncing 5.34% intraday Tuesday to $162.86. The recovery is real but partial.
Leveraged ETFs and three-day options are doing the amplifying The more interesting Wilson observation was about who actually owns the volatility. “A lot of activity around the stock is in leveraged ETFs,” adding, “but also in terms of options positioning, a lot of the options are very short dated, that’s where investors are making short-term bets on where it will move in three or four days.” Short-dated options act like a crowbar on the underlying. Dealers hedging gamma have to sell into weakness and buy into strength. This is fine when flows are neutral and ugly when they are not.
You could see this in the Reddit data. r/options carried a “Long SPCX 180 puts 30dte” post on June 20, before the worst of the move, and r/wallstreetbets lit up with a “Hold my $170 HatePut until the 26th or sell it now?” thread once losses mounted. Sentiment on the name swung from a bullish 72 on Saturday afternoon to a very bearish 18 by Tuesday morning. That looks like positioning unwinding in fast-forward against a company that launched more than 80% of the world’s mass to orbit each year since 2023 and runs a Starlink constellation of roughly 9,600 satellites serving 164 countries.
The Asia bleed and what comes next The damage exported cleanly. The MSCI Asia index fell 2.3%, its biggest intraday loss in two weeks, and South Korea’s Kospi fell more than 8% on its own tech concentration. NASDAQ futures pointed 1.3% to 1.7% lower. When one stock can drag a region, the region was never really diversified.
Wilson’s takeaway for anyone who is not trading three-day expiries was patient. “As far as longer-term investors are concerned, they buy into the opportunity. It’s really about momentum in terms of whether it’s good or bad and we have to wait until the middle of August and we get to earnings to see what the next moves are.”
Until then, the same mechanics that pulled SPCX down can pull it back up. SpaceX’s SEC filings under CIK 0001181412 will eventually show what the bond deal was actually for, and a January 2026 acquisition of xAI inside the same corporate envelope adds another moving part. Charlie Warzel writing in The Atlantic on June 20 called the resulting entity “a seven-headed Hydra at the end of finance.” Whatever it is, it now sets the tone for global tech, which means watching the leverage rather than the rocket.
David George, a general partner at Andreessen Horowitz LLC and early SpaceX investor, says Elon Musk's newly public company has the capability to pull off the big bet on artificial-intelligence computing capacity in space. He speaks with Ed Ludlow on "Bloomberg Tech.
CNBC’s Becky Quick reported that Elon Musk’s SpaceX (NASDAQ:SPCX) tapped the bond market for $25 billion in a sale that priced less than two weeks after its record-breaking IPO. The deal landed at terms typically reserved for the highest-quality corporate borrowers, signaling that fixed-income investors are willing to lend to the newly public space, connectivity, and AI company on terms close to those granted to America’s most established blue-chip companies.
SpaceX Had $90 Billion of Orders for the $25 Billion Debt Raise According to Quick, the financing was priced across five tranches with 5, 7, 10, 20, and 30-year maturities. The benchmark 10-year notes were priced at just 1.4 percentage points above U.S. Treasuries, an unusually tight spread for a company that only recently began trading publicly. For context, the 10-year Treasury yield closed at 4.51% on June 22, 2026, near the upper end of its 12-month range that spanned 3.97% to 4.67%.
People familiar with the fundraising told CNBC that the sale drew close to $90 billion in orders, well in excess of the $25 billion offered. SpaceX said the proceeds will be used to repay a bridge loan and fund other corporate purposes, shifting the capital structure from short-term bridge financing toward a layered ladder of long-dated debt.
The Credit Market Is Treating SpaceX Like a Blue-Chip Company The 1.4 percentage point spread on the 10-year tranche is the headline number for credit investors. Spreads in that neighborhood are typically associated with single-A or strong triple-B issuers with long, predictable cash flow histories. SpaceX is a brand-new public reporting company whose valuation, as The Atlantic recently put it, looks “untethered from traditional corporate finance metrics.” The willingness of bond buyers to take that spread and submit roughly $90 billion in orders against a $25 billion book indicates the credit market is treating the company as a strategic infrastructure operator rather than a speculative growth name.
That framing aligns with how Defiance ETFs CIO Sylvia Jablonski has described the business, arguing investors are underestimating SpaceX by viewing it solely as an aerospace firm when its multi-platform footprint spans launch operations, communications, defense, and AI connectivity. The company’s Starlink network, powered by approximately 9,600 satellites in Low-Earth Orbit, now delivers service across 164 countries, territories, and other markets, and the company has launched more than 80% of the world’s mass to orbit each year since 2023. That kind of recurring, infrastructure-like revenue base is exactly what fixed-income desks look for when underwriting investment-grade paper.
The Stock Has Slumped, But the Bond Market Isn’t Worried The bond market’s enthusiasm contrasts with how SPCX has traded since its debut. The IPO priced at $135 and peaked at over $225 before retreating. Shares were trading near $153.57 in early action on June 24, after a 22.64% slide over the prior week. The pullback has not dented the company’s status as one of the most valuable issuers on the NASDAQ, with a market capitalization of roughly $1.16 trillion.
What to Watch Next For stockholders, the debt raise removes a near-term overhang by extending the bridge loan and locking in financing across a 5- to 30-year maturity ladder. For credit investors, the combination of a 1.4 percentage-point 10-year spread and roughly $90 billion in demand suggests the institutional credit market has already made up its mind, even as public equity traders continue to debate the right valuation for the company.
Space Exploration Technologies (SPCX +0.44%), aka SpaceX, has been the talk of the town. The rocket launch, satellite, and artificial intelligence (AI) company had its initial public offering (IPO) earlier this month, and to say it was a success might well be an understatement. The company raised $85.7 billion, the stock jumped 19% on its first day of trading, and its market cap jumped to a cool $2 trillion.
And while it was undoubtedly the biggest, SpaceX wasn't the only blockbuster IPO so far this year. AI chipmaker Cerebras Systems (CBRS 18.18%) debuted to much fanfare last month, soaring 68% on its first day of trading after selling 34.5 million shares in all and raising $6.38 billion. Moreover, the successful debut was seen as paving the way for the upcoming SpaceX IPO.
Cerebras reported its first financial results as a public company, offering an important lesson for SpaceX investors. Let's dive into the details.
Image source: The Motley Fool.
All investors wanted and moreFor the first quarter, Cerebras generated revenue of $193.4 million, up 94% year over year and 13% sequentially. The results were driven higher by hardware revenue of $110.6 million, up 59% year over year, and by cloud and other services revenue, which surged 178% to $82.8 million. The company also edged closer to profitability, with an adjusted loss per share of $0.04.
For context, Wall Street's consensus estimates were guiding for revenue of $181 million and an adjusted loss per share of $0.16, so the chipmaker surpassed expectations on both counts.
Cerebras highlighted several recent wins that bode well for the future. The company entered into a multi-year partnership with Amazon Web Services (AWS) to bring its fast AI inferencing technology to the company's cloud customers. It also underscored a multi-year agreement with start-up OpenAI to provide 750 megawatts (MW) of computing capacity, in a deal valued at $20 billion.
The chipmaker provided an upbeat forecast. For the second quarter, Cerebras is guiding for revenue of $194 million, up 88% year over year, outpacing Wall Street's estimates of $174.3 million. The company also increased its full-year guidance for core revenue to a range of $855 million to $865 million, well ahead of expectations for $828 million. Management noted that its 47% gross margin would narrow as the year progressed.
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Cerebras' Wafer Scale Engine (WSE) is an AI chip that uses the entire silicon wafer, rather than cutting it down into hundreds of smaller chips. This process keeps all processing on a single chip, reducing the latency (time delay) inherent in communication between semiconductors.
Management noted that this gives the company an advantage over the competition, as it "delivers the fastest AI in the world." Speed is increasingly important in AI, as users seek answers and solutions more quickly.
This is all good news, right? In response to better-than-expected results and an improved outlook, the stock plunged 18% (as I write this).
What does this have to do with SpaceX?The first few quarters can be fraught with peril for any newly public company -- particularly in the wake of a blockbuster IPO. Investor expectations can be unrealistic, and the results may not go to plan, causing increased volatility. The stock could face a reckoning when SpaceX reports its first quarterly results in late July or early August.
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Moreover, the volatility could be amplified, as the company's staggered lockup expiration will likely complicate matters. Specifically, the first tier will be released just two days after SpaceX reports results, allowing the sale of 20% of shares held by employees and early investors. Furthermore, if the stock trades at 30% above its IPO price -- or $175 -- that could trigger the release of another 10% of insider shares.
Finally, SpaceX is selling for 110 times sales and 54 times next year's expected sales, which is exorbitant by any measure. A valuation of this magnitude will likely amplify volatility even further.
SpaceX could deliver a stellar earnings report, outpacing Wall Street expectations across the board -- and the stock could still plunge.
Tim Horan, Oppenheimer’s satellite and AI infrastructure analyst, went on CNBC Monday to defend a price target that sounds absurd until you back into the math. He kept his buy rating and $250 price target on SpaceX as the stock fell in its third consecutive session of decline, and floated a five-year valuation of $10 trillion. For context, that would make SpaceX (NASDAQ:SPCX) worth roughly the GDP of Germany and Japan combined.
The stock is having a rough debut. Shares are at $158, down from $192.50 a week earlier, and CNBC noted the average post-IPO buyer is almost underwater after the slide, with the five-day volume-weighted average sitting near $181. Tuesday brought a 5.34% bounce to $162.86, but Reddit has spent the past week dissecting threads with titles like “The math isn’t mathing on the SpaceX IPO” and “SPCX – Beware, institutional money is NOT buying this trash on the open market”. Horan is leaning into that doubt.
The vertical integration thesis What SpaceX is, in Horan’s framing, is no longer a launch company. “The company we think has doubled their valuation in the last six months by entering the AI market,” he told CNBC, “and we think they’re going to continue to do incredibly creative things.” The pivot point was the early-2026 acquisition of xAI, which folded Grok and its X-platform integration into SpaceX as a core business pillar.
That repositioning matters because of what Horan thinks the addressable market looks like. “They think AI is a $25 trillion TAM, and they are the only vertically integrated company that can attack every segment of this and really disrupt an awful lot of industries,” he said. Then the part that sounds like science fiction. “SpaceX is making their own solar panels. They want to make their own chips… build a fab that will create five times the amount of chips that the whole world is producing.”
Take that claim with appropriate skepticism. But the underlying point survives even if the fab is half that size. SpaceX already controls the launch stack. It launched more than 80% of the world’s mass to orbit annually since 2023, with Falcon rockets at over 99% mission success. Owning the rockets, the satellites, the ground network, the AI model, and eventually the chips is exactly the moat the bull case requires.
Starlink as the funding engine The cash to fund all of this is supposed to come from Starlink. “We think Starlink will be worth roughly $1 trillion,” Horan said. “Over the next 5 to 10 years they’re going to increase capacity a hundred fold. They already have about 12 million broadband subscribers globally. We think they could easily support a couple of hundred million.”
Moreover, the constellation is already enormous. As of March 31, 2026, Starlink served customers across 164 countries through roughly 9,600 low-Earth-orbit satellites, with a satellite-to-mobile layer extending coverage to about 30 countries. There is also a quietly compelling tailwind. A recent GAO assessment noted the Department of Energy projects data centers will account for up to 12% of U.S. electrical demand by 2028, driven by AI, and that since January 2026 the FCC has received three applications from U.S. companies for large satellite constellations operating as orbital data centers. If compute migrates toward orbit, the company that owns cheap heavy-lift launch capacity collects rent from everyone.
What can go wrong Horan named the near-term risk himself. “Short term it’s really getting the starship to work. We need the starship to kind of get the new communications satellites up.” Without Starship reaching reliable operational cadence, the hundredfold Starlink capacity expansion does not happen, and the $1 trillion in revenue Musk has targeted stays a slide.
For investors, the gap between Horan’s view and market consensus shows in the price action itself. SpaceX, registered with the SEC, currently trades around $158, well off its 52-week high of $225.64. The Atlantic this week described the stock as “a financial instrument for Musk, a meme, and a testament to the irrationality of the modern stock market.” Horan’s $250 target and $10 trillion long-term call assume the meme grows into the moat. The next twelve Starship launches will settle the argument.
While investors watch to see if and when SpaceX will be added to major stock indexes, other changes to some key market benchmarks are already on the way.
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AI Stock Market Leaders Thumped As SpaceX Takes Traders On Wild Ride; Three Strong Sell Rules To Use Now
Google-Parent Alphabet To Join Dow Jones Industrial Average, Replacing Verizon SpaceX late Tuesday announced it raised $25 billion in its inaugural bond sale, while demand for a piece of Elon Musk's rocket and AI company once again far outmatched supply. Rival Rocket Lab (RKLB) on Tuesday revealed that it completed a tactical response mission for the Space Force. SPCX stock rebounded modestly Wednesday, while other space stocks continued to trend…
SpaceX (SPCX 0.05%) has taken investors on a wild ride since its June 12 IPO. The aerospace and AI company went public at $135 per share, started trading at $150, and soared to a record high of $225.64 on June 16. But as of this writing, it trades at about $160.
SpaceX's stock pulled back because its valuation had gotten overheated. At its peak, its market cap briefly hit $2.66 trillion, or 142 times its 2025 revenue of $18.7 billion. It also only floated about 4% of its shares in its IPO, and that limited supply amplified its gains.
Image source: Getty Images.
Yet after that pullback, SpaceX is still worth $2.06 trillion, or 110 times last year's sales. That's a bubbly valuation for a company that grew its revenue by 33% in 2025. While market hype and rosy expectations could prevent its stock from dipping below its IPO price, it could face a reckoning once its lockup periods start to expire in about a month.
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When will SpaceX's lockup periods expire? When a company goes public, its insiders, early investors, and institutional investors are barred from selling their shares immediately. Instead, they generally need to wait until the traditional 180-day "lockup period" ends before they can sell those shares.
However, that's not a firm rule -- so companies can structure their lockup periods in different ways. Instead of waiting for 180 days, SpaceX will allow its insiders and early investors to sell their shares in several waves. The first wave will occur on the second trading day after its second-quarter earnings report in late July or early August.
On that day, SpaceX will unlock 20% of its shares held by its employees and early pre-IPO holders. If its stock closed at or above $175.50 per share for at least five of the ten consecutive days before the earnings release, it will unlock another 10% of its shares. It will continue to unlock 7% of its shares on Aug. 20, Sept. 9, Sept. 24, Oct. 9, and Oct. 24.
On the second trading day after its third-quarter earnings report in late October or early November, it will unlock 28% of its shares. On Dec. 8, it will unlock all of its remaining shares.
Why should investors watch these dates? SpaceX's stock could decline on those lockup dates as its insiders and early investors cash out. That selling could make it much easier and cheaper to short the stock. Therefore, if you believe SpaceX has a bright future but don't want to pay the wrong price for the right stock, those lockup expirations could create some good buying opportunities.
Seema Mody walked CNBC viewers through it earlier this week, with the kind of detail that suggests the bankers had already started circling. “SpaceX is exploring the prospect of this mega bond sale that could kick off as early as tomorrow, reportedly raising as much as $20 billion,” she said. That “as early as tomorrow” was the tell. The deal is happening into a stock that has given back a quarter of its post-IPO gains. As of Wednesday, SpaceX has successfully raised $25 billion.
A $25 billion follow-up to a $75 billion debut SpaceX’s $25 billion raise is coming less than two weeks after the company secured more than $75 billion in its IPO. Most companies spend years building toward a capital raise of that magnitude. SpaceX is stacking them in a fortnight. SpaceX (NASDAQ:SPCX) currently trades around $158, off roughly 22% from the $225 high it printed in the days after listing. The stock is down 19.69% over the past five sessions.
Why issue bonds now, with the equity on its back foot? Because the credit window is wide open and the use of proceeds points squarely at AI infrastructure. Proceeds would fund chip and compute purchases and continued investment in Grok, the large language model competing with offerings from OpenAI and Anthropic. Buying GPUs has become the cost of staying in the conversation.
The ratings agencies bless Starlink, raise an eyebrow at Grok SpaceX walked into this offering with a rare gift. Investment-grade ratings from all three of S&P, Moody’s and Fitch, with the agencies citing Starlink’s recurring subscription cash flow and the cost advantages of reusable rockets. Debt investors hunting for AI infrastructure exposure suddenly have a name they can put in a high-grade portfolio. Mody noted the obvious follow-on point. “Standard and Poor’s flagging its AI bet as the riskiest of the three business segments due to its massive upfront investments and the unclear monetization path.”
S&P is essentially saying the rockets and satellites will service the coupon. Grok is the speculative leg. Bondholders get paid by the boring stuff. Equity holders are funding the moonshot, and equity holders are currently down 25%.
SpaceX is not the only one issuing into the AI capex wave Mody framed the broader pattern. “Nearly every technology company has tapped the bond market to fund the AI build out… NVIDIA last week with a $25 billion bond sale. Google, Meta, Amazon as well.” NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) issuing $25 billion of paper is the most interesting data point, because NVIDIA generates colossal free cash flow and does not, in any traditional sense, need to borrow.
Look at the Q1 FY27 numbers. Revenue of $81.61 billion, up 85.2% year over year, with Data Center revenue alone at $75.25 billion. Non-GAAP EPS of $1.87. Total supply-related commitments now sit at $119.0 billion, which is the actual answer to why even NVIDIA is borrowing. The supply chain is being prepaid years out. CEO Jensen Huang called the AI factory buildout “the largest infrastructure expansion in human history.” The Q1 FY27 8-K spells out the commitment math.
NVDA shares trade at $208.65, up 45.24% over the past year while SPCX has cratered in days.
What the crowd is saying while the deal prices Retail sentiment has flipped hard. The dominant Reddit post on r/stocks during the decline carried the headline “SPCX – Beware, institutional money is NOT buying this trash on the open market.” Composite sentiment on SPCX sits at 43.91, neutral with medium confidence. The social score of 27 drags the composite down. Analyst target sits at $187.80. That is 15.41% upside from current levels.
The bond deal will likely price into healthy demand. Investment-grade AI exposure with a Starlink coupon attached is scarce. Watch the spread at pricing, watch whether Grok gets called out in the prospectus risk factors the way S&P called it out, and watch the lockup calendar. The equity weakness so far has been pre-lockup. That is what should hold your attention.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of SPCX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Space Exploration Technologies Corp. (SPCX +1.11%), better known as SpaceX, is a more complex business than many people believed prior to its recent IPO. In addition to its industry-leading rocket launch business, the company has the highly profitable Starlink satellite internet service and the AI-focused xAI platform.
When it comes to the xAI business, much of the investment thesis has centered around the Grok AI model and long-term aspirational projects like putting data centers into orbit. But with three major deal announcements in recent months, investors are starting to see that there is more to SpaceX's AI business than many had thought. They're also seeing that it could become the company's primary revenue driver as soon as next year.
SpaceX's three compute deals -- so far It was a big surprise for many investors when SpaceX announced a deal with Anthropic shortly before its IPO. The AI company behind the popular Claude platforms agreed to lease about 300 megawatts of AI compute from xAI, the entire capacity of the Colossus 1 data center.
Image source: Getty Images.
The deal terms include Anthropic paying SpaceX $1.25 billion per month for a three-year term (ending May 2029), which equals $15 billion in annual revenue. For context, SpaceX's entire 2025 revenue was $18.7 billion, so this deal alone was a massive needle-mover.
Next, Google's parent company Alphabet (GOOGL +1.28%)(GOOG +1.12%) agreed to lease about 110,000 Nvidia (NVDA 0.29%) GPUs from SpaceX facilities, paying $920 per month beginning in October. So, this deal adds about $11 billion in annualized revenue.
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Just recently, Reflection AI became the company's third AI compute customer, agreeing to pay $150 per month ($1.8 billion per year) to access Nvidia AI chips at the Colossus 2 data center.
Between these three deals, SpaceX has added about $27.5 billion in annual revenue. Just for comparison, this means SpaceX just added about five times the annual revenue of cybersecurity giant CrowdStrike (CRWD 0.02%).
What's next? This new revenue stream represents an impressive strategy pivot. The company's Grok AI model was using only about 11% of its GPU capacity, so SpaceX decided to monetize the excess capacity.
Most significantly for SpaceX investors, this adds a large stream of recurring, high-margin revenue to a business that previously had an investment thesis based on things they might be able to accomplish years in the future. With many enterprise AI companies currently unable to secure Nvidia chip allocations as quickly as they need them, it wouldn't be too surprising to see this side of the business grow significantly over the next few years.
Matt Frankel, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, CrowdStrike, and Nvidia. The Motley Fool has a disclosure policy.
Space Exploration Technologies (SPCX +1.11%) just executed one of the biggest and most successful IPOs in history. After going public at a $1.77 trillion valuation, the company's market cap immediately soared above $2.5 trillion. Not bad for a business that generated a $4.9 billion loss in 2025, and another $4.3 billion loss in the first quarter of this year.
As the old adage says, however, what goes up must come down. Only 4.2% of SpaceX's outstanding shares are currently tradable on public markets, and this limited float makes the stock more prone to volatile ups and downs. That's exactly what we've seen with SpaceX stock thus far. After zooming from $150 per share to nearly $220 per share in a matter of days, SpaceX stock has settled back down to around $160 per share near market close on Tuesday -- a 27% drop also occurring over a matter of days.
Should you be buying the dip? That all comes down to how you answer one question.
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SpaceX investors should ask themselves this question Here's the question: Do you think orbital data centers will ever exist? Yes, SpaceX is generating modest profits in its rocket division. Yes, its Starlink internet service is also profitable. However, neither rockets nor Starlink will ever justify SpaceX's valuation on their own. Even SpaceX admits as much. The company's estimated total addressable market for those two divisions totals just $2 trillion. That's substantially less than the company's entire market cap today.
In reality, SpaceX's valuation is only justified if the company is able to grow its AI division substantially. SpaceX believes that AI alone presents a $26.5 trillion opportunity, compared to just $2 trillion for rockets and Starlink combined.
Image source: Getty Images.
How exactly will SpaceX grow its AI business? Most of this growth will stem from one opportunity: Roughly $22.7 trillion of SpaceX's claimed $26.5 trillion growth potential in AI is exclusively related to "enterprise applications." Enterprises are businesses, and the term is quite a catchall. According to SpaceX's IPO prospectus:
For enterprises and governments, frontier models and agentic AI -- autonomous systems capable of multi-step reasoning and independent task execution -- are beginning to manage increasingly complex processes and workflows. As of February 2026, more than 80% of Fortune 500 companies were using AI active agents. Entire industries are being reshaped by AI-driven applications, including agentic commerce (personalized AI-directed shopping), vibe coding (software development with minimal or no human-written code), and autonomous driving for vehicles.
Despite the variety of enterprise applications SpaceX will be pursuing, one thing is clear: The company will need a lot more compute power to make it all possible. That requires building more data centers, and data centers are facing critical growth constraints, including land, water, and energy availability. That's why SpaceX is looking to launch data centers into space. Low earth orbit data centers would -- at least on paper -- lower operating costs, taking advantage of limitless solar energy.
SpaceX CEO Elon Musk reportedly wants to put 1 million AI compute satellites into space, potentially beginning as early as next year. "We've got a pretty good idea of how to operate, just really large constellations, and do it safely now, right? We are the only operator that has any experience of that scale," Musk said earlier this year, according to Space.com.
Whether that will actually happen remains a huge unknown.
SpaceX stock has dipped in its second week of trading, but the investment thesis remains the same. If you're not bullish on AI in general, and in particular SpaceX's ability to launch data centers into space, shares likely aren't for you despite the company's promising rocket and Starlink divisions. Huge success in those two divisions alone won't be enough to justify SpaceX's current multitrillion-dollar valuation.
To be sure, plenty of experts are skeptical. "The pitch for space-based data centers is compelling: falling launch costs, abundant solar energy, no grid queues and no zoning battles," concludes a recent report from the World Economic Forum. "But cooling in space is far harder than it sounds – and the physics may be the biggest obstacle the industry has yet to reckon with."
Buying the dip is only worth considering if you believe SpaceX and Musk have the keys to overcome those obstacles.
After a full week of trading, Space Exploration Technologies (SPCX +1.11%) stock is up 15% from its first-day trading price. At this point, whoever wasn't able to participate in the initial public offering or didn't buy as soon as the opportunity arose may be biding their time for the next attractive entry point.
The next big event for SpaceX is its second-quarter earnings report, although there could be news pieces beforehand that move the stock, such as last week's announcement that it's going to acquire Cursor. Earnings reports give investors all sorts of new information about how the company is performing and what it's expecting for the future. These details help investors make informed decisions about their stocks.
Image source: Getty Images.
Shareholders can expect to hear this kind of information in the SpaceX earnings release, which is likely to be scheduled for sometime at the end of July or beginning of August for the three-month period ended June 30. But there's something else connected to the timing that might impact whether or not it makes sense to buy SpaceX stock at that time.
The first lockup period is ending When companies go public, they put restrictions on insiders from being able to sell shares immediately. This is meant to create stability while the stock enters the markets; if too many insiders were able to sell shares, it could flood the market and drive the price down. Keeping those shares out of the public market allows it to set a market price, and the stocks available for sale are predominantly the ones from the IPO. In this case, SpaceX's aim was to raise $75 billion, although it likely raised $86 billion with its overallotment. The company is worth $2.4 trillion right now, and the rest of the shares are locked up in various insider accounts, with Elon Musk having 85% ownership.
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In a standard IPO, the lockup period usually ends after 180 days, at which time there is often a flood of new shares. SpaceX has an unusual arrangement with staggered times for ending restrictions. The first period is the day after the second-quarter earnings report, which means that's the first day the market could see a flood of SpaceX shares available.
Since earnings reports can move the stock, investors often evaluate whether it makes sense to buy the stock beforehand, expecting a positive report. In this case, whether or not there's a positive report, there's a good chance that the new shares on the market could drive the stock down. Even without the lockup ending, SpaceX stock looks overpriced right now, and this is another reason to steer clear for the time being.
Jennifer Saibil 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 +1.11%) first week as a public company showed that investors were not valuing it like a normal rocket stock. They were paying for a platform that combines Starlink's satellite-internet cash flow, a dominant position in rocket launches, expanding artificial intelligence (AI) infrastructure, mobile connectivity, and the potential commercial success of the Starship reusable rocket system. And don't forget visionary Elon Musk leading it all.
Since then, SpaceX stock has pulled back sharply from its post-IPO high, closing at $154.60 on June 22. Investors seem to be already questioning the company's premium valuation. Here's what would need to go right for the stock to recover again by 2027 and why I predict it will trade at $192.
Image source: Getty Images.
The best-case target price Analysts estimate SpaceX's 2027 revenue could range from $54.8 billion to $79.3 billion, with the average estimate at $64.1 billion. The company has about 13.1 billion shares outstanding.
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Based on SpaceX's recent share price of $154.60 and the average 2027 revenue estimate of $64.1 billion, the stock is trading at 31.8 times projected 2027 sales. If that same multiple is applied to the high end of the 2027 revenue estimate of $79.3 billion, the company's market capitalization could rise to about $2.5 trillion. With a share count of around 13.1 billion, the company's share price would be about $192.
If SpaceX reaches the low end of the revenue estimate and still trades at about 31.8 times sales, the stock would be trading at roughly $133 at the end of 2027. If the price-to-sales multiple drops to 25, then the stock would trade at $104 per share with that revenue.
Premium valuation needs to be justified SpaceX's Starlink-powered connectivity segment is the key growth engine and generated $11.4 billion of revenue and $4.4 billion of operating income in 2025. Starlink's next challenge is adding high-quality subscribers. Average revenue per user (ARPU) has been declining since 2023 as Starlink expands into more international, lower-priced markets.
Consumer subscribers accounted for over 60% of the connectivity segment revenue in 2025. If revenue mix shifts toward enterprise and government customers, airlines, and maritime users, it could help Starlink offset falling ARPU.
Direct-to-cell lets ordinary smartphones connect directly to Starlink satellites when regular mobile towers are unavailable. Starlink Mobile already earns revenue through sharing arrangements with mobile network operators. The company has already launched around 650 satellites to enable mobile connectivity.
AI revenue also needs to scale while the business becomes profitable. If AI remains capital-intensive without a clear profitability timeline, it could become the reason for multiple compression.
The Starship reusable rocket system is another key growth catalyst. Starship does not need to be fully commercial by 2027. However, investors need to see enough progress to keep believing it can lower launch costs, support larger Starlink satellites, and strengthen SpaceX's long-term growth story.
A share price of $192 -- or more -- by 2027 is possible and is my prediction, but it requires a best-case setup where revenue reaches the high end of expectations and investors remain willing to value SpaceX as a space, connectivity, and AI infrastructure company.
Space Exploration Technologies (SPCX +1.11%) CEO Elon Musk just might be the first investor ever to think in trillions as a matter of course. For the world's first trillionaire investor, that probably makes sense -- but it's still a little mind-boggling.
Take Musk's latest post on X, for example:
In the future, a trillion times a trillion dollars will be spent on making antimatter to travel to other star systems
-- Elon Musk (@elonmusk) June 19, 2026 Most of us ordinary humans struggle to wrap our minds around just how big "a trillion" is. But here is Musk, running way out ahead of the rest of us and using the figure in ordinary speech -- sometimes twice in one sentence!
Image source: SpaceX.
Can SpaceX go from billions to trillions? Or take another example, this one from the SpaceX prospectus filed just before the IPO last week. In that document, the space/social media/artificial intelligence company argued that people should invest in SpaceX because it has "identified the largest [total addressable market] in human history." Across its three main businesses, space (rockets), connectivity (Starlink), and AI, Musk believes his company could potentially capture as much as $28.5 trillion in annual revenue.
Specifically:
$370 billion from space $1.6 trillion from connectivity ($870 billion from Starlink Broadband and $740 billion from Starlink Mobile and "additional opportunities") And $26.5 trillion from AI, including AI infrastructure, consumer subscriptions, digital advertising, and enterprise applications
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A trillion pipe dreams And Elon Musk thinks SpaceX can make that much revenue every year? This seems a mite ambitious. Recall that last year, SpaceX booked only $18.7 billion in total revenue across its three main divisions. Going from $18.7 billion to $28.5 trillion will require growing revenue a total of 152,300%.
To be fair, the prospectus never actually says when Musk believes SpaceX will reach a $28.5 trillion total addressable market. He might think that's the size of the addressable market today. He might be talking about 100 years from now.
All I know for sure is that, according to the statistics site worldomater.info, the gross domestic product (GDP) of the entire United States today is only $32.4 trillion. SpaceX seems to be saying that one day its own revenue stream will be 12% smaller than that of the United States -- or put another way, that up to 88% of the goods and services produced in the United States will be produced by SpaceX.
Like I said, ambitious.
Before relying too much on Musk's prediction, make sure to check your risk tolerance, just in case things don't work out quite as well as he's promising.
Rich Smith 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.
SpaceX NASDAQ: SPCX is trading around $165, reflecting a 25% retracement from its massive post-IPO peak of $225.
A historic public debut initially assigned SpaceX a peak market capitalization of $1.77 trillion, fueled by unshakeable investor confidence in a perceived orbital monopoly. Equity markets are now aggressively digesting a structural shift in the core narrative.
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The Unproven AI Pivot Burns SpaceX CashSpaceX Today
$157.17 +1.06 (+0.68%)
As of 10:27 AM Eastern
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52-Week Range$147.11▼
$225.64Price Target$212.67
SpaceX management is rapidly mutating SpaceX from a pure-play aerospace sector titan into a sprawling, capital-intensive technology sector conglomerate. By diverting massive capital expenditures toward artificial intelligence (AI) data centers and using SpaceX equity to fund multibillion-dollar software acquisitions, leadership fundamentally alters SpaceX's risk profile.
The premium valuation previously awarded for orbital dominance is fracturing under the weight of escalating cash burn, macroeconomic headwinds, and a total reliance on a single, margin-compressed satellite unit.
Black Hole Balance Sheet: The AI Cash DrainSpaceX's post-IPO price action illustrates a textbook repricing of capital allocation risks. Days after raising $75 billion in the public markets, SpaceX executed a $60 billion all-stock acquisition of Anysphere, the developer of the coding platform Cursor.
For investors, SpaceX's strategic decision to use inflated equity as currency to acquire a terrestrial software entity will result in an immediate 3.4% equity dilution for SpaceX shareholders. Expanding the SpaceX share count to fund non-core software operations immediately ahead of impending lock-up expirations actively destroys shareholder value.
This aggressive pivot toward artificial intelligence infrastructure requires intense upfront capital expenditures. Developing data centers creates a severe cash drain that directly cannibalizes liquidity needed for SpaceX's core orbital logistics.
A recently signed $6.3 billion agreement for computing power with open-source startup Reflection AI highlights this shift. While the deal guarantees SpaceX $150 million in monthly recurring revenue starting July 1, 2026, the agreement requires granting Reflection AI access to NVIDIA Corp. NASDAQ: NVDA GB300 infrastructure at the SpaceX Colossus 2 data center. Building and maintaining outsized data centers to support external artificial intelligence clients strips resources away from core SpaceX launch vehicle development.
Colliding Orbits: The Tesla Merger ThreatInstitutional options positioning indicates the broader market is pricing in another major structural threat. Rumors suggest an impending, highly dilutive stock-swap merger involving Tesla Inc.'s NASDAQ: TSLA artificial intelligence and robotics divisions. The rumor hints at the absorption of Tesla's terrestrial electric vehicle operations and the consumer robotics segment, forcing a total re-rating of the SpaceX business model.
Aerospace investors typically pay a massive premium for pure-play monopolies. By blending aerospace logistics with auto manufacturing, artificial intelligence, robotics, and software development, SpaceX invites a massive conglomerate discount.
Complex, multi-industry holding companies historically trade at lower multiples than specialized peers because capital is routinely misallocated across underperforming divisions. SpaceX currently trades at roughly 29 times estimated 2027 sales and 71 times enterprise value to earnings before interest, taxes, depreciation, and amortization (EBITDA). An EBITDA multiple of 71x requires absolute operational perfection. A conglomerate structure leaves SpaceX no room for operational friction.
Starlink Margins Fall Back to Earth FastA fundamental disconnect between the underlying launch segment and the profitable Starlink satellite unit presents immense systemic risk for SpaceX. Core launch operations function largely as a break-even entity designed to facilitate orbital deployment. SpaceX relies almost entirely on Starlink for positive free cash flow.
While Starlink subscriber counts continue to climb, aggressive expansion into emerging markets is driving persistent compression in average revenue per user.
Average revenue per user dropped from $99 per month in 2023 to $66 per month in the first quarter of 2026. Launching and maintaining a low-earth-orbit satellite costs SpaceX the same regardless of whether the end-user pays high-tier enterprise rates in North America or heavily subsidized rates in emerging markets. Failing to stabilize these unit economics while simultaneously expanding massive data centers threatens the SpaceX balance sheet.
A $20 billion senior unsecured notes offering is currently underway, serving as a stark reminder of the required leverage SpaceX needs to operate. The bond market absorbed the debt comfortably due to investment-grade ratings from S&P Global and Moody's, allowing SpaceX to refinance legacy 12.5% junk bonds with manageable 4.58% debt. Equity investors are looking further down the road. Financial modeling from Oppenheimer projects SpaceX's net debt could balloon from roughly $13 billion to over $400 billion by 2031 to sustain continuous orbital deployment and massive data center builds.
SpaceX (SPCX) Price Chart for Wednesday, June, 24, 2026
Micro Float Meets Macro Gravity for SpaceXBroader macroeconomic mechanics are accelerating the SpaceX sell-off. A hawkish pivot at the recent Federal Reserve meeting under Chair Kevin Warsh has driven U.S. Treasury yields higher. Rising yields mechanically punish long-duration, high-multiple growth equities like SpaceX by heavily discounting future cash flows.
These macroeconomic headwinds are amplified by extreme artificial scarcity in the secondary market. Only 5% of SpaceX's outstanding shares are currently traded in the public float, creating severe supply-and-demand imbalances.
This microscopic float generated record-breaking derivatives volume, with 1.8 million single-name options contracts exchanging hands for $2.8 billion in premium during the first trading session alone. Heavy institutional anchoring at the $200 strike currently acts as a defensive ceiling for SpaceX. Asset managers are heavily capitalizing on this downward momentum, launching inverse products like the Leverage Shares 2x Short SPCX Daily ETF NYSEARCA: SSPC to directly fade the SpaceX premium multiple.
Safe Landings in the Commercial Space SectorThe commercial space sector maintains strong secular tailwinds, driven by sustained government defense spending and private infrastructure demand. SpaceX simply features an equity valuation that severely misprices its impending capital expenditure trajectory and upcoming equity dilution.
Investors may want to consider rotating capital from premium-priced megacaps with unproven AI ventures into fundamentally sound aerospace pure-plays. Risk-averse market participants may favor a space-focused ETF such as the Procure Space ETF NASDAQ: UFO. For SpaceX, higher-risk investors should await the late 2026 lock-up expirations to allow improved float liquidity before establishing long-term positions.
Should You Invest $1,000 in SpaceX Right Now?Before you consider SpaceX, you'll want to hear this.
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On Monday, a Wall Street analyst wrote favorably about certain semiconductor stocks with a vendor relationship to Elon Musk's Space Exploration Technologies (SPCX 0.03%), or SpaceX.
While several companies in SpaceX's supply chain were mentioned as beneficiaries, most of the mentioned stocks are at or near their all-time highs. However, one AI infrastructure stock should also benefit, perhaps even more than the others, and it's the only stock in the group trading at a reasonable valuation, 75% below its all-time high.
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Why SpaceX vendors are poised to benefit On Monday, GF Securities analysts Jeff Pu and Alicia Xia wrote a note saying that, as SpaceX has begun renting out excess computing power to other AI companies, and given that it just raised a whopping $86 billion in last week's initial public offering, there shouldn't be any obstacle to SpaceX building a massive amount of computing infrastructure. The theory is that this will benefit AI hardware makers that already have a strong relationship with SpaceX.
SpaceX's recent acquisition of Cursor should help improve both SpaceX's Grok models and Cursor's internal models, boosting demand for SpaceX's internal AI computing needs. But even if that doesn't work out, SpaceX's recent decision to rent out its capacity to other rival AI companies and hyperscalers should be a promising "fallback" option.
According to analysts, SpaceX brought up its massive Colossus 1 and 2 AI data centers in just 122 days and 91 days, respectively -- a significantly shorter time frame than a typical data center build-out. Shorter construction durations mean lower costs and increased revenue, suggesting SpaceX's burgeoning "neocloud" business is likely highly profitable.
Super Micro Computer has been a key partner in Colossus The company most responsible for SpaceX getting Colossus up in record time is Super Micro Computer (SMCI 1.11%).
The controversial server maker is a U.S. company that has had to compete with low-cost Asian rivals in the server business. To do so, CEO Charles Liang has focused on key features, such as lower energy leakage, as well as on being faster than rivals at building and delivering customized server racks.
Supermicro's "premium" server status has often been a staple in enterprise on-premises data centers, as well as newer AI-oriented "neoclouds." Large cloud hyperscalers with in-house server assembly and data center expertise typically use lower-cost Asian "white box" server providers.
However, it appears Supermicro's low-power, customized, and fast server racks caught Elon Musk's eye, with Musk using them in both the SpaceX Colossus I and II AI data centers. Supermicro noted that in its December quarter, one major customer accounted for a whopping 63% of its revenue. This was very likely xAI, now SpaceX, given that the Colossus II data center became operational in January. Musk noted that Colossus II was the first 1 GW training cluster ever built and that xAI would expand it to 1.5 GW by April.
Given that SpaceX just received a fresh cash injection from its IPO, just purchased AI coding leader Cursor AI, and can apparently rent spare capacity to others, it is highly likely to continue buying lots of servers from Supermicro going forward.
Image source: Getty Images.
Why Supermicro can be had at a discount Unlike the other beneficiaries of SpaceX's build-out, Supermicro can be had at a reasonable-looking valuation of 18 times trailing earnings and a stock price 75% below its all-time highs set back in 2024.
The company has endured two major scandals in the past two years, along with one overriding financial concern. In 2024, Supermicro's auditor resigned after a short-seller questioned the integrity of its financials. Then, just a few months ago, two Supermicro employees, one of whom was a board member, along with an outside contractor, were indicted for a scheme to smuggle its servers into China through third-party intermediaries, in violation of export restrictions.
Furthermore, Supermicro's gross margins have come under pressure over the past couple of years due to both lower margins on expensive AI servers and, as noted earlier, likely very high SpaceX bargaining power.
However, Supermicro appears to be putting these controversies behind it. Whatever accounting practices Supermicro engaged in that led to its prior auditor resigning, the new auditor, BDO, signed off on Supermicro's books in early 2025. Likely, the company's revenue recognition or back-office processes were unorthodox, but Supermicro is a 33-year-old company with top-tier tech clients, such as SpaceX. So, it doesn't appear there was anything fraudulent.
As for the recent server-smuggling case to China, Supermicro actually aided authorities in uncovering the scheme, so it does not appear to be a violation by the company. Moreover, Supermicro helped thwart another such plot in late May, seeming to validate its seriousness in combating smuggling and validating its innocence in the prior case.
On the margin front, Supermicro recorded a huge 3.6-percentage-point increase from the December quarter to 9.9% in gross margins during its March quarter. Now, one could say that the low gross margins of the December quarter were in fact due to SpaceX's massive bulk buying and that those margins could remain low for SpaceX purchases going forward.
However, Supermicro is likely to lower costs as it repeats these massive projects and fills out its manufacturing capacity. That should improve gross margins solely due to utilization. Furthermore, working with Musk is giving Supermicro a bit of a "brand halo," which the company can use to charge higher prices to other smaller customers.
The SpaceX partnership should serve Supermicro well Despite the initial, early-stage gross margin hit, Supermicro seems poised to benefit from its partnership with SpaceX, given the high future SpaceX demand and the reputational boost from working with Musk. For those willing to bear the risk of another governance slip-up, Supermicro appears the most reasonably priced of the major AI hardware stocks today.
The commercial space economy is changing fast. The cost of delivering payloads into orbit is declining rapidly, a powerful tailwind that creates exceptional revenue potential for companies in the aerospace sector. The secular expansion of global satellite networks isn't a future idea anymore. It is an active, physical economy generating real cash flows. Investors are rightly looking at low-Earth orbit as the next major growth frontier, recognizing that orbital infrastructure will power global communications for decades to come.
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Diluting the Dream: SpaceX Becomes a ConglomerateSpaceX NASDAQ: SPCX is currently broadcasting severe financial warning signs during this sector-wide boom. The company recently executed the largest public debut on record, raising over $85 billion after underwriters fully exercised their overallotment options. Investors naturally assumed SpaceX would deploy that capital directly toward deep-space launch capabilities or orbital logistics. Instead, SpaceX is using it to mutate into a highly leveraged technology conglomerate.
SpaceX Today
$157.17 +1.06 (+0.68%)
As of 10:27 AM Eastern
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52-Week Range$147.11▼
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The story of an untouchable aerospace monopoly is starting to crack. SpaceX has made a surprise push into AI infrastructure and is leaning on unsecured debt to fund it. By directing resources toward terrestrial server racks rather than orbital dominance, SpaceX is actively diluting the premium valuation that retail and institutional investors just paid top dollar to acquire.
This figurative dilution of the company's aerospace premium was immediately followed by a literal dilution of its shares. Just days after the public offering, SpaceX executed a $60 billion all-stock acquisition of Anysphere, the developer of the AI coding platform Cursor. By using its newly minted public equity as currency to acquire the software startup, management triggered an immediate 3.4% dilution of existing shareholders' equity. Expanding the outstanding share count to fund non-core software operations ahead of impending insider lock-up expirations actively eroded the value that retail investors thought they had just purchased.
Salvage Operations: Renting Out Failed AI InfrastructureTo understand the shifting fundamentals at SpaceX, you have to look at how capital is currently being allocated on the ground. SpaceX leadership has increasingly diverted resources toward massive, capital-intensive AI infrastructure.
Initially, SpaceX built the Colossus 1 supercomputing cluster in Memphis, Tennessee, to train large language models. Internal engineering teams quickly hit a technical wall. Latency bottlenecks severely restricted data transfer speeds between campuses located 10 miles apart, rendering the supercomputer entirely unusable for its intended internal training purposes.
Instead of writing down the technical failure, SpaceX pivoted to a landlord model. SpaceX began renting out the Colossus 1 compute capacity to Anthropic for $1.25 billion per month. Now, SpaceX is doubling down on this real estate strategy. SpaceX recently signed a $6.3 billion agreement with Reflection AI to lease graphics processing units at its Colossus 2 data center, generating an additional $150 million in monthly recurring revenue.
Finding external tenants to monetize sunk infrastructure costs might look like a savvy salvage operation to a casual observer. Structurally, though, it transforms the aerospace pioneer into an infrastructure middleman. Maintaining massive data centers to support external clients strips focus and cash away from core launch vehicle development. This compute lease also features a mutual 90-day cancellation clause. Relying on highly fragile, easily terminated contracts to justify astronomical capital expenditures leaves SpaceX deeply exposed if the AI spending cycle cools.
Unsecured Baggage: The $20B Post-IPO Debt TrapThe most glaring red flag for fundamental investors arrived just 10 days after the public offering. Despite boasting a reported $100.8 billion cash balance heavily padded by IPO proceeds, SpaceX immediately tapped the bond market to issue $20 billion in senior unsecured notes.
When an executive team raises record equity capital only to immediately issue massive unsecured debt, the broader market takes notice. Issuing debt so quickly after a historic stock debut suggests that core operating cash flows are insufficient to self-fund ongoing capital expenditures.
The structure of the debt itself warrants intense scrutiny. Unsecured notes are not backed by physical collateral, such as launch facilities or satellite constellations. They operate entirely on corporate faith and sit on equal footing with SpaceX's other senior debts. By injecting an additional $20 billion in unsecured obligations into the capital stack, SpaceX is actively pushing public shareholders further down the line to get paid in the event of a liquidation or restructuring.
Digging into the SEC filings reveals exactly what this capital raise was for. The $20 billion note offering is specifically earmarked to refinance a massive bridge loan from March 2026. SpaceX originally used that bridge loan to pay off xAI's debt after buying the company. The bond market is not funding the next generation of Starship. It is cleaning up the speculative, pre-IPO liabilities of a sister company.
Priced for Perfection, Grounded by Financial RealityEquity markets are rapidly repricing these capital allocation risks. SpaceX shares violently re-rated from a post-IPO peak of $225.64, plummeting 31.5% to $154.60. That downward momentum erased roughly $600 billion in market capitalization.
Trading at roughly 71X enterprise value to EBITDA requires absolute operational perfection. A sprawling conglomerate structure leaves no room for friction, yet friction is appearing right in the core cash engine.
SpaceX relies almost entirely on its Starlink satellite broadband unit for positive free cash flow. While subscriber growth remains steady, the company's aggressive expansion into emerging markets is triggering severe margin compression. Average revenue per user dropped drastically from $99 per month in 2023 to just $66 per month in the first quarter of 2026.
Launching and maintaining a low-Earth orbit satellite costs SpaceX the exact same amount regardless of whether the end-user pays high-tier enterprise rates in North America or heavily subsidized rates globally. Failing to stabilize these unit economics while simultaneously funding massive terrestrial data centers threatens to break the balance sheet. With long-term financial modeling projecting that net debt could balloon to $400 billion or more by 2031, the transition from an asset-light innovator to a heavily leveraged, hardware-centric utility is in full swing.
Safe Landings: Getting on the Right ShipThe retail frenzy surrounding the historic IPO temporarily drained cash from the rest of the aerospace sector. Portfolio managers and individual investors liquidated positions in smaller space companies to chase the headline event. This capital rotation triggered a sharp sell-off across the industry, heavily discounting otherwise sound aerospace businesses.
Savvy investors recognize that this sector dilution represents a profound mispricing of risk and creates highly attractive entry points for pure-play operators unburdened by AI bailouts or legacy debt.
Rocket Lab NASDAQ: RKLB and AST SpaceMobile NASDAQ: ASTS offer unencumbered exposure to the secular expansion of the space economy. Both operators maintain clean balance sheets, possess proven orbital delivery systems, and have upcoming catalysts, without carrying an astronomical forward multiple. For those seeking diversified exposure to the broader macro tailwinds of space commercialization without single-stock execution risk, the Procure Space ETF NASDAQ: UFO provides a highly strategic vehicle.
Investors heavily allocated to SpaceX may want to strictly evaluate their risk parameters as the massive August lock-up expirations approach. Cautious investors might prefer to wait for the conglomerate discount to fully materialize, opting instead to capture orbital growth through heavily discounted satellite and launch infrastructure operators that were temporarily left behind in the liquidity drain.
Should You Invest $1,000 in SpaceX Right Now?Before you consider SpaceX, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and SpaceX wasn't on the list.
While SpaceX currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
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Space Exploration Technologies (SpaceX) (SPCX 0.03%) has made its historic market debut, and it was more fantastic than expected. Since the initial public offering (IPO) had many more requests than shares available, the underwriting banks likely exercised their overall 15% allotment, and SpaceX raised $86 billion.
While SpaceX stock jumped more than 50% in the days following its IPO, it hasn't been able to hold on to all of its gains. As of this writing, SpaceX stock is up 17% from its IPO price. Interest in the stock remains high, for many reasons, including Elon Musk fandom and a desire to be part of the future of space travel.
Image source: Getty Images.
But for the retail investor, the end goal is putting your money to work for you. Over the long term, SpaceX may become the consequential company investors are hoping for. But even then, this may not be the best time to invest. Consider where the stock might be three months from now.
The historical precedent IPOs can offer exciting incentives for investors. Getting in at the beginning gives you the greatest opportunities for gains -- or does it?
With today's mega-IPOs, that's not necessarily the case. Many large tech companies land on the markets as expensive, highly valued companies, and that doesn't create the conditions for strong gains, at least initially.
Consider some of the largest U.S. IPOs and how they did after three months:
Some went up, and some went down, but the average is a 13% increase.
So far, SpaceX is unlike any other IPO in several ways and might prove different in three months. But markets move in specific ways, and no stock can outrun its fundamentals over time. If SpaceX stock mimics the average performance of these other top IPOs, then you would see a moderate gain in its stock price over the next three months, and $1,000 would be worth around $1,130.
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However, in three months, part of the lockup period will have ended. SpaceX has an unusual, staggered lockup structure, with 20% of insider shares allowed to be sold after the first earnings report, expected in late July or early August. There are some other conditions, and other lockups ending at different times between 70 and 135 days,with most of the remainder coming to market at 180 days.
Based on averages, SpaceX stock is likely to be slightly higher than its IPO price in three months, but it's volatile, so investors should probably avoid it right now.
SpaceX (NASDAQ:SPCX) has gone from Wall Street darling to battleground stock in less than two weeks. Analyst calls span everything from a hard Sell to blue‑sky AI moonshots, with valuation the clear fault line.
Space Exploration Technologies (SPCX 0.03%), better known as SpaceX, is the hottest new space stock to own. It only began trading earlier this month, but with a market cap of around $2 trillion, it's already among the most valuable stocks in the world due to its massive growth opportunities.
But what about a smaller player in the industry, such as Rocket Lab (RKLB 8.42%)? At a fraction of the size, with a market cap of around $60 billion, it may also stand to benefit significantly from greater investor interest in space stocks. Which one is the better buy today: SpaceX or Rocket Lab?
Image source: Getty Images.
SpaceX has a compelling growth story and strong retail interest Although SpaceX has a significant market cap already, investors don't appear to be overly concerned simply because of the massive growth potential the company has. In addition to space travel, SpaceX plans to be a leading company in artificial intelligence (AI), sending data centers into space. And its Starlink business is so promising that it has telecom investors worried about disruptions in that industry as well.
Plus, with Elon Musk as its CEO, SpaceX has that "it" factor that can enable it to trade at a higher valuation than what its fundamentals may justify. This is a company that incurred more than $4 billion in losses during the first three months of the year and is burning through cash at a rapid pace. And yet, investors don't appear concerned. While the stock has declined in recent days, it isn't exactly crashing the way some investors and analysts may have expected; there appears to be support for the stock at its current valuation, even though its fundamentals are by no means robust.
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With plenty of growth opportunities and significant interest from retail investors, SpaceX's stock may continue to be a hot buy this year, even if its fundamentals don't exactly support its high price.
Rocket Lab is a cheaper option with a potential growth catalyst on the horizon Rocket Lab isn't as diverse as SpaceX, as its focus is on space. It isn't profitable either, but with losses totaling $183 million over the trailing 12 months, they pale in comparison to SpaceX. From a valuation perspective, the stock also trades at around 80 times its revenue, which is lower than the multiple of more than 100 that SpaceX trades at.
The company generated strong growth in its most recent quarter, with quarterly revenue hitting a new record of over $200 million, rising by just under 64% year over year. Rocket Lab is also a trusted partner of the U.S. government, as it has secured over $1.3 billion worth of contracts thus far with the U.S. Space Development Agency.
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Later this year, the company plans to launch its larger Neutron rocket, which could open up greater opportunities for the business in the near term. It can carry payloads of up to 13,000 kg to low-Earth orbit, which is far more than the roughly 300kg its smaller Electron rocket can transport. A successful launch of Neutron could lead to Rocket Lab's stock also taking off.
Which stock is the better buy today? Both of these stocks are expensive and involve some risk due to their lack of profitability. SpaceX stock is compelling because it's more diversified and it has more varied growth opportunities than Rocket Lab. However, with a lower valuation, Rocket Lab may also have more room to rise higher.
While normally I might go with the better value buy, if I were picking between these two stocks, I'd go with SpaceX. Whether you're paying 80 times revenue or 100 times revenue, the premium is significant either way. Plus, the extra premium may well be justified given the larger, more diversified business you're getting with SpaceX and its visionary CEO, who has demonstrated a masterful ability to grow businesses over the years.
Item 1 of 2 The New Year's eve ball ascends on the day of SpaceX's initial public offering (IPO) in New York City, U.S., June 12, 2026. REUTERS/Brendan McDermid/File Photo
[1/2]The New Year's eve ball ascends on the day of SpaceX's initial public offering (IPO) in New York City, U.S., June 12, 2026. REUTERS/Brendan McDermid/File Photo Purchase Licensing Rights, opens new tab
SummaryCompaniesShort interest 13% of SpaceX free float from 8% - Ortex dataBorrow cost fell to about 1% from as high as 14% at launchNo squeeze, but if shares rebound short sellers could be hitNEW YORK, June 24 (Reuters) - Short sellers have increased their bets on further falls in the share price of Elon Musk's SpaceX after the stock's drop from highs scaled immediately after its market debut on June 12, data and analytics company Ortex Technologies said on Wednesday.
SpaceX's short interest, the total number of shares sold short as a percentage of the total shares available for public trading, is 13%, up from 8% in the prior session, Ortex said.
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"Short interest in SpaceX is building remarkably fast for a stock that has only been public a couple of weeks," Ortex co-founder Peter Hillerberg told Reuters.
The stock's drop of about 30% from the high of $225.64, scaled days after its debut, amid a wider selloff has drawn short sellers at a faster-than-expected pace.
"A jump like this is a clear sign that a growing number of traders are positioning for the price to fall sharply," he said.
SpaceX's $2 trillion valuation makes it a target for short sellers looking to bet on a drop in the shares, but strong retail and institutional interest and Musk's history of public battles against short sellers make that a risky proposition.
SpaceX did not immediately respond to a request for comment.
Initial euphoria over SpaceX has given way to more balanced trading as investors look to guard against further downside.
The cost to borrow, a gauge of demand to short a stock relative to the supply of shares available to lend, remains cheap at about 1%, Ortex data showed. It was as high as 14% when the shares started trading. Ortex sources its short selling data from daily global institutional stock lending inventories.
The Magnificent Seven stocks of Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, and Tesla are hardly shorted, with only about 1% to 3% of their free floats sold short. Borrow costs for them range from 0.25% to 0.33%, Ortex data showed.
Utilization, the share of available stock that is lent out, is about 39%, up from the mid-30s last week, signaling there is still ample supply available to lend, Ortex data showed.
While SpaceX may be facing selling pressure, its limited float size makes short sellers vulnerable to a "squeeze" if the shares were to jump in value for any reason, Hillerberg said.
With short interest at about 83 million shares, against the stock's average daily volume of about 270 million, a short seller rush to buy back shares could drive the stock higher.
"That kind of forced buying can land right on top of any rally and accelerate it well beyond what the fundamentals alone would justify, which is the classic short squeeze dynamic," Hillerberg said.
Reporting by Saqib Iqbal Ahmed; Editing by Alexander Smith
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SummarySpaceX’s 35% one-week drop erased more than $600 billion in market value, exposing how crowded the post-IPO trade had become.The correction may not be over, as retail FOMO and institutional profit-taking could still drive a deeper pullback.At the same time, crypto is facing a historic liquidity crisis as capital continues to rotate into AI, semiconductors, and SpaceX. Walter Cicchetti/iStock Editorial via Getty Images
After reaching a post-IPO high of around $225, SpaceX (SPCX) pulled back by roughly 35% in less than a week, briefly falling to around $147.
The SpaceX stock ticker is displayed on a smartphone screen placed on a reflective surface onto which a space illustration is projected, in Creteil, France, on June 19, 2026. The stock of SpaceX continues its consolidation phase on the New York Stock Exchange one week after its Nasdaq listing. (Photo by Samuel Boivin/NurPhoto via Getty Images)
NurPhoto via Getty Images
This article was written by Doug Nathman, with research by his team at Trefis.
SpaceX (SPCX) has experienced a 30% decrease over the past three trading days, which appears dramatic.
However, this decline is far from sufficient.
Following the recent selloff, SpaceX is still trading at approximately 100 times its trailing revenue and nearly 200 times its trailing EBITDA, despite revenue growth hovering around the low-30% range. With insider lockups approaching expiration, rival trillion-dollar AI IPOs on the horizon, and rising interest-rate expectations, the stock continues to seem overpriced.
The Lockup Countdown Is ProceedingWhen a company becomes publicly traded, insiders and employees are generally restricted from selling their shares for a defined duration following the IPO. At SpaceX, these restrictions will soon begin to lift. A 20% insider share unlock will occur after earnings in early to mid-August, with subsequent 7% unlocks planned around August 21 and September 10. Additionally, a separate 10% unlock will automatically be triggered if the stock trades 30% above its IPO price. SpaceX has a vast workforce heavily compensated with equity shares, and even a small percentage deciding to sell could result in a supply oversupply that the market has yet to account for. Previous large IPOs such as Facebook and Uber have shown significant secondary declines upon lockup expiry, and none faced an unlock schedule as aggressive as this one. Insiders might inundate the market with as much as 44% of shares by early September, potentially amplifying the current float by approximately 900%.
OpenAI And Anthropic IPOsThe most significant competitive IPOs anticipated over the coming months are not standard tech offerings. OpenAI and Anthropic have already lodged confidential filings for their IPOs, with Anthropic filing in early June and OpenAI shortly thereafter, paving the way for expected high-profile launches in late 2026. Both companies are projected to be valued at over a trillion dollars and possess narratives about transforming the global economy. Institutional investors have limited capital and an appetite for speculative risk that is also finite. Combined, OpenAI and Anthropic might pursue hundreds of billions in investor capital, creating a compelling alternative destination for growth-focused funds. This situation could directly affect SpaceX.
Interest Rates And The New Fed Chair Are Significant VariablesAs inflation begins to increase again and a new Federal Reserve chair steps in, the prospect of sustained high rates has resurfaced. While Kevin Warsh maintained rates between 3.50% and 3.75% at his initial meeting, the committee's rhetoric has shifted considerably. Nine of his colleagues indicated support for rate increases this year, with six endorsing two quarter-point hikes. As of March, none of the policymakers had anticipated an increase. The inflation that has driven this shift is tangible: CPI reached 4.2% in May, the highest figure seen in three years, primarily due to the oil price surge linked to the conflict in Iran. SpaceX exemplifies a long-duration asset—most of the cash flows from Starship and SpaceX AI are over a decade away. Each increase of 25 basis points to the risk-free rate effectively reduces the present value of what terminal value is worth today.
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Fundamentals Do Not Justify The ValuationThe gap in valuation remains a challenge to rationalize. Our discounted cash flow model suggests a fair value of approximately $79 per share, indicating a valuation of about $1 trillion. Many critical assumptions reflected in the current price appear overly optimistic. Starlink’s ARPU is decreasing as subscriber growth begins to shift towards lower-income international markets. The launch business remains reliant on recycling Falcon 9 profits into Starship development, while Starship itself has yet to exhibit dependable commercial operations at scale. Furthermore, underwriters have positioned SpaceXAI as a significant future growth engine, yet the venture remains highly speculative, burning nearly $8 billion per quarter with limited distribution. At the current valuation level, investors are essentially paying for flawless execution over coming years before it has actually materialized.
SpaceX is seeking investor support for an AI infrastructure thesis valued for flawlessness at multiples that afford little leeway for the unexpected. It becomes essential to balance speculative investments like this with established cash-generating platforms. A strategic portfolio approach can help you remain invested while mitigating the effects of market disruptions. Although regularly outperforming the market is a difficult endeavor, Trefis's High Quality (HQ) Portfolio is crafted to facilitate this goal. The HQ strategy has consistently excelled compared to its market benchmark since its inception, yielding cumulative returns exceeding 105 percent.
On the heels of its blockbuster IPO, SpaceX announced that it plans to acquire AI coding startup Cursor in an all-stock deal worth $60 billion by the third quarter of 2026. The deal would double the net worths of Cursor’s four young billionaire cofounders, Michael Truell, 25, Aman Sanger, 25, Sualeh Asif, 25, and Arvid Lunnemark, 26. Forbes estimates they will be worth $2.7 billion each.
They aren’t the only ones poised for a windfall from the deal. Early investors including Andreessen Horowitz (which reportedly owns a roughly 10% stake, worth $6 billion) and Thrive (which owns about 7%, worth $4.2 billion, per a source familiar) stand to win big from the deal too.
Cursor has come a long way in a short span of time. Founded in 2022 by four MIT friends and 30 Under 30 alumni, the startup started out as a coding tool for developers. After AI behemoth Anthropic launched Claude Code, Cursor found itself on the defensive, shifting to “war time” mode, as Forbes reported in March.
It appears to have worked. In early June, Cursor crossed $4 billion in annualized revenue, fending off stiff competition from both Anthropic and OpenAI, Forbes reported. Its revenue grew from $2 billion in February to $3 billion in late April. The uptick in revenue is in part due its new product Cloud Agents, which works on complex programming tasks for hours in the background.
Cursor first teamed up with SpaceX in April, when the rocket maker obtained the right to acquire it for $60 billion, or pay $1.5 billion in breakup fees and $8.5 billion in computing resources if the deal didn’t go through. SpaceX, which also acquired xAI in February, had been struggling to improve the capabilities of its models as AI researchers left en masse. But it has a ton of compute, thanks to its gigantic Colossus supercomputer. For the past few months, the two companies have been jointly training a new AI model that will be released in Cursor and xAI’s Grok, SpaceX said in a post.
Now let’s get into the headlines.
BIG PLAYS
On Friday, Anthropic abruptly disabled its new AI model, Fable 5, after the U.S. government issued an order to ban foreign nationals from accessing it, citing national security concerns. The directive came after government officials learned of a way to jailbreak the powerful model’s safeguards. Fable 5, a more secure version of Anthropic’s Mythos family of models, had been in restricted access for months and was launched just days earlier to millions of people. A group of tech leaders including Amazon CEO Andy Jassy had flagged concerns over the model’s security risks to senior Trump officials last week, Reuters reported.
“You have to make a judgment call on these things,” Anthropic’s Chief Commercial Officer Paul Smith told Forbes just hours before the order was issued. “The safest you can be is to not let people use something. And then it’s totally safe. But then how is that helping the mission?”
Also notable: OpenAI’s spending reached $34 billion last year amid a neck-in-neck race with rival Anthropic to dominate the AI market, the Financial Times reported. The giant’s costs far outweigh the $13 billion in revenue it booked in 2025.
SHOW ME THE MONEY
SpaceX’s historic IPO made scores of stakeholders ultra-wealthy. The rocket maker and AI company started trading just before noon on Friday at $150 per share, implying an eye-popping $2 trillion valuation. CEO Elon Musk became the world’s first trillionaire. Early investors like Peter Thiel’s Founders Fund and Antonio Gracias’ Valor Equity Partners’ stakes in the company are worth $67 billion and $71 billion, respectively. As of Tuesday afternoon, SpaceX’s market cap had skyrocketed to $2.8 trillion, surpassing Amazon as the world’s fifth largest company by market value.
AI DEAL OF THE WEEK
Jeff Bezos’ AI venture Project Prometheus raised $12 billion in funding at a $41 billion valuation. Bezos runs the company as co-CEO with Vik Bajaj, a cofounder of Alphabet’s life sciences research lab Verily and a Stanford University professor. The nascent startup is building AI tools to help engineers design and manufacture physical products faster. It plans to use the funding to buy up compute, according to CNBC.
DEEP DIVE
If you’re interested in renting an apartment in one of Equity Residential’s 300 properties, chances are you’ll soon be chatting with Ella to set up an apartment tour or answer questions about a lease.
But Ella isn’t human. It’s an AI assistant that answers the phones and responds to hundreds of emails around the clock. It’s still sending quick replies after all the humans have gone home, when most inquiries typically come in.
Ella is so helpful that some people don’t realize they’re talking to a bot.
“Customers were calling in asking for Ella and saying, ‘We just love her work ethic.’ They wanted to make sure she was going to get her commission,” says Kristin Hupfer, a senior vice president of customer experience at Equity Residential. The firm discloses that Ella is an AI chatbot the first time it communicates with a person through email, phone or text, Hupfer says.
Ella has been a gamechanger for the Chicago-based property manager, which owns buildings in New York, San Francisco and Seattle. Back in 2018, the firm’s staff struggled to keep up with the influx of hundreds of requests from prospective tenants each week. That in turn meant losing customers to rivals and keeping units idle. Then in 2019, it started working with New York-based EliseAI, the developer of Ella. Now the bot handles 1.5 million texts, emails and phone calls every year, allowing Equity Residential to save $20 million in payroll costs, Hupfer says (no layoffs, she clarifies, just not replacing staff who left). The real estate firm owns two buildings in Jersey City that don’t need a human staff member at all because they can be managed from a nearby community and Ella handles all the administrative tasks.
Today one in six apartments in the U.S. and 90 percent of the country’s largest property managers use EliseAI’s tools to respond to questions about a unit, renew leases and triage maintenance requests. It can even use smart locks to let renters into an apartment for a tour, or determine that a request to fix a broken A/C unit in the summer should be prioritized.
Read the full story on Forbes.
MODEL BEHAVIOR
Anthropic’s AI models are incredibly powerful. That is, unless you’re an AI researcher developing frontier large language models that could eventually compete against them. Anthropic disclosed last week that its Fable 5 and Mythos 5 models deliberately become less helpful if they detect another AI research lab using them. Rather than outright refusing to produce an answer, the models secretly modify user prompts to change its own responses.
US Senator Elizabeth Warren, a Massachusetts Democrat, says President Donald Trump "can't point to where we're better off" after the war in Iran. Speaking on "Balance of Power: Evening Edition," Senator Warren also discusses Defense Secretary Pete Hegseth's military budget request, her criticisms of Kevin Warsh as chair of the Federal Reserve, the state of housing and the SpaceX IPO.
