A heavily hyped initial public offering (IPO). An impressive post-IPO pop. A subsequent pullback. Investors have seen this story play out before. And they're seeing it again with Space Exploration Technologies (SPCX 7.80%).
SpaceX delivered the biggest IPO in history. Its shares soared over the next few days following the IPO. Now, though, the stock is down roughly 22% below its peak. How long can SpaceX go? What comes next for the highly followed space technology company's shares? Here's what history suggests.
Image source: Getty Images.
The IPO stock playbook University of Florida finance professor Jay Ritter analyzed thousands of U.S. IPOs since 1980. He found that the average IPO stock jumped 19% on its first day of trading. Guess how big SpaceX's day one gain was? Pat yourself on the back if you answered 19%.
Whether or not an IPO stock soars initially, though, early pullbacks are also commonplace. That's especially the case for stocks that receive extensive media attention. For example, Tesla's (TSLA +1.20%) share price fell by more than 30% following its 2011 IPO. Meta Platforms (META +8.88%), then known as Facebook, lost more than half of its market cap in the first four months of trading.
Among the 15 largest U.S. IPOs since 2006, the average stock plunged around 50% below its IPO price at some point during the 12 months following the public listing. The average first-year returns for these stocks were roughly 33% losses.
But were long-term investors richly rewarded for being patient and waiting? Sometimes. Holding onto Tesla and Meta paid off tremendously for early investors. However, nine of the 15 largest U.S. IPO stocks have been losers for those who bought on the first day of trading. Rivian (RIVN 0.98%) is an especially instructive example, with its shares plunging more than 80% since the IPO.
Judging by the history of other major IPOs, the worst might not be over for SpaceX. Granted, the current rebound could continue for a while. However, SpaceX could decline by nearly 30% if it moves similarly to previous big IPO stocks.
One key tailwind for SpaceX, though, could be its upcoming inclusion in the Nasdaq-100 Index after the market close on July 6, 2026. All exchange-traded funds (ETFs) and mutual funds that track an index must own the index's underlying stocks.
On the other hand, SpaceX could also have a ticking time bomb on its hands. Following the company's second-quarter earnings report (likely in mid-August), 20% of eligible insider shares can be sold. This number will increase by 10% if the stock trades at least 30% higher than its IPO price during five of 10 consecutive trading days leading up to the Q2 update.
SpaceX also has other time-based IPO lockup period expirations. Insiders can sell up to 7% of shares at 70, 90, 105, 120, and 135 days following the IPO. After the Q3 earnings update, up to 28% more shares can be sold. Insider selling at high volumes would almost certainly create significant downward pressure on SpaceX's share price.
Math is more important than history. Mark Twain is often credited as saying, "History doesn't repeat itself, but it often rhymes." It's possible this adage could play out with SpaceX, with the stock plummeting as other high-profile IPO stocks have during their first year of trading.
However, SpaceX's market cap remains above $2.2 trillion. That's an astronomical valuation for a company that generated $18.7 billion in revenue last year. Sure, SpaceX is growing. But its growth isn't enough to justify the premium pricing at this point.
I think math is more important to SpaceX than history. Unfortunately, neither looks encouraging for investors considering buying the stock on the dip.
Space Exploration Technologies (SPCX 7.80%) delivered one of history's biggest stock market events just recently: the largest initial public offering ever. SpaceX, raising $75 billion in the operation, then saw its shares rise nearly 20% from the $135 offer price on its first day of trading. And the exercise of an overallotment option brought the total of funds raised to more than $85 billion.
Since that time -- the IPO was on June 12 -- all eyes have been on SpaceX stock. Investors may be intrigued by the offer itself, but also by the company's leader, Elon Musk, and his ambitious projects. Now, a new milestone lies right around the corner. SpaceX is set to join the Nasdaq-100, an index including the largest non-financial companies on the Nasdaq, on July 7.
Will SpaceX soar after that time? History offers a compellingly clear answer.
Image source: Getty Images.
An interesting mix of businesses First, let's consider why investors are so interested in SpaceX -- and this has to do with the company's interesting mix of growth businesses and its leadership. SpaceX is, as the name suggests, an expert in rocket launches. It aims to make launches cheaper and more efficient through its reusable technology -- and so far, it's made significant progress here. For example, NASA says that SpaceX's Falcon 9 back in 2010 reduced launch costs by a mind-boggling 85%. The goal now is to reduce costs by more than 99%, and a key step is just ahead: SpaceX aims to launch its fully reusable spacecraft, Starship, with payloads later this year.
SpaceX's second business is also closely linked to space: It's the satellite-based connectivity unit, Starlink, and is currently the company's biggest revenue driver. Last year, it brought in $11.4 billion on SpaceX's total of $18 billion. And Starlink membership, soaring from 2.3 million three years ago to more than 10 million today, offers us reason to be optimistic about growth.
Finally, SpaceX's third business is artificial intelligence (AI). Now, this might not seem space-related -- but it actually is. One of this unit's goals is to operate data centers in space, and the practical -- and cost-saving -- part of this is that SpaceX may use its own rockets to make this happen. And SpaceX also may use its rockets for the transport needs of Starlink.
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Elon Musk at the helm So SpaceX's businesses are diversified, yet they are complementary at the same time. And each may deliver a considerable amount of growth. Some investors also like the idea that Elon Musk is at the helm since he is known for being ambitious and innovative.
All of this is very positive, but it's also important to keep in mind that some of SpaceX's biggest goals involve technology that hasn't been fully developed or proven. And in order to develop that technology, SpaceX must invest billions of dollars. In fact, capital expenditures for its AI business last year reached $12 billion and helped push the company to a net loss. All of this represents risk. So even though SpaceX may be an exciting company, it's not the best investment for every investor, particularly at today's price.
At the current level, the stock trades at more than 100x sales, so it isn't cheap.
SPCX PS Ratio (Annual) data by YCharts
Entering the Nasdaq-100 Now, let's consider the upcoming Nasdaq-100 entry. This is due to the new "fast track" procedure that offers companies admission after only 15 trading days -- as long as they are among the 40 biggest in the index in terms of market value. SpaceX makes the cut and will join as of July 7. This means that funds tracking the Nasdaq-100 must add SpaceX shares, and this buying activity may lift the stock.
But this doesn't necessarily mean the stock will soar, as history shows us. A look at recent Nasdaq-100 additions -- added June 22 of this year -- didn't result in significant gains for those players.
ALAB data by YCharts
A look back farther in time, to 2024, when Palantir Technologies, Strategy, and Axon Enterprise joined the Nasdaq-100, shows all three actually declined in the 10 days to follow.
PLTR data by YCharts
So, while SpaceX could see a slight pop, as funds scoop up the shares, significant positive movement isn't guaranteed. What does this mean for you? In any case, short-term stock movements shouldn't be a concern. When investing, it's crucial to hold onto stocks for the long term, at least five years, to truly benefit from the company's growth. So, you shouldn't worry about buying SpaceX before a particular event, such as this Nasdaq-100 entry.
Instead, it's a better idea to take your time and consider the company's upcoming earnings reports before deciding whether to get in on this exciting but risky stock.
When shares of Space Exploration Technologies (SPCX 7.80%) opened to the public at $150 per share on June 12, some interested investors had difficulty filling their orders. With massive demand for the stock in its first few days of trading, the price shot up to an intraday peak of $225.64 on June 16.
Since then, however, it's been a different story. By late June, it had given up most of those gains, and even briefly traded below $150. As of the close of trading July 1, SpaceX stock was changing hands for under $158 -- around 5% above where it opened to the public on June 12.
There appear to be two reasons for this decline, as well as two upcoming events that could drive meaningful short-term price movements for the stock.
Image source: Getty Images.
The stock price falls as demand fades Highly anticipated initial public offerings (IPOs) can soar during their first few days of trading based on excitement alone. After all, investors have been hearing about these private companies for years, but were never able to buy shares. Many who buy in early do so because they don't want to miss out on what could be the next Amazon or Nvidia.
After a few days, however, those who particularly wanted to own the stock probably have already bought it. Active demand starts to decline. At that point, there isn't much left to help propel the stock price higher over the short term.
Then came the company's announcement of a $25 billion bond offering on June 22. That debt sale, coming so soon after the IPO, created fresh worries about the capital-intensive nature of SpaceX's ambitions. That day alone, shares dropped by more than 12% to close at $154.60.
What moves the SpaceX stock from here Over the next two months, two events could create short-term price movements for SpaceX stock. On July 7, the company will be added to the Nasdaq-100 index, which includes the 100 largest non-financial companies listed on the Nasdaq. As a consequence, mutual funds and exchange-traded funds that track that index will have to buy SpaceX shares, which may prop up the stock price in the short term.
In August, SpaceX is expected to deliver its first earnings report as a publicly traded company. There may not be much new information in that readout, as SpaceX just went public, but based on recent trading, it's hard to imagine a muted response to whatever the company presents.
Perhaps more important is that the arrival of that earnings report will trigger the end of one of the company's lock-up periods, allowing insiders and early investors to start selling a fraction of their shares.
SpaceX created a staggered system for when insiders are allowed to sell shares. Starting on the second full day of trading after that first earnings report, insiders will be permitted to sell up to 20% of their eligible, previously locked-up shares. If the stock is trading 30% or more above the IPO price -- so, $175.50 -- those insiders can sell another 10% of their shares.
There's likely to be a lot of price action over the next two months, but that doesn't suggest the stock price will make meaningful moves higher or lower. It may remain stuck in a range for the short term, but that's not as important for long-term investing.
What will be more important is seeing continuous progress from SpaceX in building out artificial intelligence (AI) infrastructure, which will allow it to capitalize on what it predicts will be a $26.5 trillion total addressable market in AI.
Elon Musk is the largest shareholder of Space Exploration Technologies (SPCX 7.82%), or SpaceX, with about a 42% stake. He also holds 82% of the voting power through ownership of Class B shares, effectively giving him full control of the leading space company.
While most SpaceX insiders can start selling their shares this year, Musk and certain other significant investors are subject to an extended lockup period. This structure is a positive sign for the company's shareholders and reveals aspects of SpaceX's financing strategy.
Image source: The Motley Fool.
How SpaceX's lockup period works IPOs have traditionally had 180-day lockup periods during which insiders can't sell their shares. SpaceX took a different approach to spread out insider selling and avoid a single selling period that causes a sharp decline in the stock price.
Insiders can sell up to 20% of their shares on the second full trading day after SpaceX releases its Q2 2026 earnings report, plus an additional 10% if the stock meets a performance trigger. Additional percentages unlock across six more selling windows that end 180 days after the IPO date.
Musk's shares are locked for a full year. The earliest he can sell is 366 days after the IPO. An extended lockup period is rarely a bad thing, as it shows that the founder and largest shareholder has skin in the game.
In fairness, even when Musk can sell his shares, he can't exactly cash out. That would send the stock price into a tailspin. But the lockup ensures that Musk and other significant investors must wait until the company has been trading for a year before making any moves.
What does this signal about SpaceX's cash strategy? SpaceX is spending heavily, and its extended lockup period indicates that it plans to continue using equity and debt to finance major expenses. A lockup is a mechanism for protecting the stock price and the company's reputation. A founder selling shares as soon as possible shows a lack of confidence, which can sink the stock and make the market see the company as a risky bet. SpaceX will then have less buying power when issuing equity and pay higher rates when taking on debt.
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SpaceX has already used both these financing methods since going public. On June 16, it announced an agreement to buy Cursor, an AI coding company, for $60 billion in an all-stock deal. On June 22, it held a $25 billion bond sale to repay the bridge loan it used to buy xAI earlier this year.
However, this cash strategy is also by necessity because SpaceX is unprofitable. It reported a net loss of $4.9 billion in 2025, and free cash flow was -$9.1 billion in Q1 2026. Although the lockup period is somewhat reassuring, buying SpaceX stock remains extremely risky, especially given its market cap of $2.2 trillion (as of June 29). You may want to wait for the next couple of earnings reports to see what kind of cash it's bringing in before considering an investment.
Elon Musk raises his phone towards the sky during a joint news conference with T-Mobile CEO Mike Sievert (not pictured) at the SpaceX Starbase, in Brownsville, Texas, U.S., August 25, 2022. REUTERS/Adrees Latif/File Photo Purchase Licensing Rights, opens new tab
July 1 (Reuters) - Elon Musk on Wednesday denied a Wall Street Journal report that SpaceX (SPCX.O), opens new tab showed investors and other stakeholders a prototype of an AI-focused device ahead of its blockbuster IPO.
"Utterly false," Musk said in a post on X, without elaborating.
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The Journal had reported, citing people familiar with the matter, that the prototype handset-like device was designed to run on a proprietary operating system, contained AI technology from xAI and would use Qualcomm's (QCOM.O), opens new tab Snapdragon chips.
The report added that SpaceX had told some investors the project remained in its early stages, with the design still evolving and no certainty the device would ultimately be built.
SpaceX has invested billions of dollars to expand beyond its core launch and satellite internet businesses, pouring money into AI infrastructure, xAI's Grok large language model and plans for space-based computing as Musk seeks to position the company at the center of the AI race.
SpaceX and Qualcomm did not immediately respond to requests for comment.
Reuters reported in February that SpaceX had plans to develop a mobile device connected to its Starlink satellite internet constellation that could rival smartphones.
Musk said in January that a Starlink phone was "not out of the question at some point," adding that such a device would be very different from current phones.
Last month, Microsoft (MSFT.O), opens new tab unveiled a prototype AI-powered badge device for workers featuring Qualcomm wearable chips, pitching it as an always-connected assistant that uses AI agents, voice, a touchscreen and a camera to help users complete tasks.
Reporting by Akash Sriram in Bengaluru; Editing by Maju Samuel
Our Standards: The Thomson Reuters Trust Principles., opens new tab
ToplineSpaceX CEO Elon Musk called a recent report the company showed investors a prototype handheld, iPhone-like device designed for interacting with artificial intelligence systems “utterly false”—although reports have continued indicating the company may be trying to expand its retail offerings.
A report indicated the company was showing a prototype handheld AI device to investors.
VCG via Getty Images
Key FactsAccording to a report in the Wall Street Journal, SpaceX showed some investors a prototype similar to an iPhone but “slimmer,” which would run on SpaceX’s proprietary operating system.
The device would also use AI technology from xAI, which SpaceX absorbed in February, and use chips from Qualcomm, the Journal reported citing people familiar with the matter.
However, the device is reportedly still in a prototype phase—no name for the object has been reported, and it is unclear if it will ever be released to the public.
Musk rejected the report outright, responding to commentary about the device on X by calling it “utterly false.”
The SpaceX chief has frequently pushed back against reports about the company developing an iPhone-like competitor—flatly stating “we are not developing a phone” after a similar report from Reuters in February.
SpaceX did not immediately respond to a request for comment from Forbes.
TangentSpeculation about a possible mobile device from SpaceX comes as the company reportedly plans to expand its business into retail mobile phone service. Chief operating officer Gwynne Shotwell told investors the company was considering plans to offer a terrestrial mobile phone service, the Financial Times first reported last week. The same day, Bloomberg reported the company was in talks with Charter Communications about a partnership to use the internet provider’s ground infrastructure for its phone traffic. SpaceX already partners with T-Mobile to provide direct to cell satellite phone service using its Starlink satellites.
Crucial Quote“SpaceX has a long way to go before successfully manufacturing a consumer device at scale and competing against the leading platforms,” analysts at Vital Knowledge wrote after the report on Wednesday. “Musk-led companies are given a massive benefit of the doubt when it comes to product promises (which translates into enormous valuation premiums at SPCX and TSLA based on products that are more ideas than reality), but it’s hard to imagine SpaceX becoming a force in consumer electronics.” SpaceX’s stock price is on a downswing Wednesday, having dropped 7.3% as of around 3:30 p.m. EDT. The slump drove Musk’s net worth down by more than $50 billion, eliminating his status as a trillionaire.
Space Exploration Technologies (SPCX 7.80%) will join the Nasdaq-100 on July 7, after Nasdaq adjusted its rules to provide a "Fast Entry" option for eligible companies. Funds that track the Nasdaq-100, including the Invesco QQQ Trust, will need to buy SpaceX stock after market close on July 6.
JPMorgan estimates that this could drive $4.3 billion in passive inflows into SpaceX. Considering SpaceX has a tiny float -- only about 4% -- that kind of investment may push the price up. Should you buy before then to take advantage?
Image source: Getty Images.
There are a few problems with this strategy. Any boost SpaceX gets will be temporary and unrelated to its long-term value. It could pull back just as quickly, in which case you don't come out ahead unless you take your profits immediately. This is trading, and it's much riskier and far less effective for building wealth than investing.
Also, most investors who follow SpaceX know when it's joining the Nasdaq-100. It's a good bet that plenty of people will buy the stock in anticipation of its index inclusion, which could lead to a much smaller bump than expected, or none at all.
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It only makes sense to buy SpaceX if you think it's a good investment. While this space stock has potential, it's extremely risky and volatile. This is a company worth over $2 trillion as of June 30, despite losing $4.9 billion last year. Numbers like that matter much more than inclusion in the Nasdaq-100, and they're one of the reasons you may be better off waiting to invest in SpaceX.
JPMorgan Chase is an advertising partner of Motley Fool Money. Lyle Daly has positions in Invesco QQQ Trust. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
On July 7, Space Exploration Technologies (SPCX 7.71%), better known as SpaceX, is set to begin trading as a member of the Nasdaq-100. Inclusion into major stock market indexes often triggers automatic buying from institutional funds that track these benchmarks -- potentially boosting stock prices in the short term.
Let's explore how chasing event-driven momentum usually distracts investors from the deeper fundamentals that truly matter for long-term wealth generation.
Image source: Getty Images.
What is the Nasdaq-100? The Nasdaq-100 is a stock market index comprised of the 100 largest non-financial companies listed on the Nasdaq exchange. Inclusion in a major index usually leads to increased trading, broader analyst coverage, and passive investment inflows from exchange-traded funds. For SpaceX, this achievement underscores its transition into a major publicly traded company and signals mainstream acceptance of its role across the aerospace and technology industries.
Image source: Getty Images.
Why event-driven buying is dangerous Since going public last month, SpaceX has exhibited significant volatility. Investors relying solely on the news around the Nasdaq-100 inclusion risk buying shares at an inflated price driven by temporary enthusiasm.
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Index inclusions may lead to gains in the short term, but these rises are usually followed by sharp corrections once traders take their profits. These dynamics highlight the speculative nature of timing your purchases around singular catalysts.
Always keep a long-term mindset Deciding whether to invest in SpaceX stock should be rooted in conviction around the company's ambitions in space exploration, expanding low-orbit satellite networks, and building artificial intelligence (AI) infrastructure. These segments represent transformative opportunities that could generate meaningful growth over the coming decades.
However, approaching SpaceX -- or any stock -- through a trading mindset that attempts to front-run momentum events ultimately diverges from prudent, disciplined investing principles focused on long-term potential rather than fleeting catalysts. While SpaceX's inclusion in the Nasdaq-100 is noteworthy, it is not enough to justify an immediate buy.
Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
SpaceX (SPCX 7.71%), the aerospace and AI company founded by Elon Musk, went public on June 12 at a valuation of $1.77 trillion, making it the largest IPO in history. It went public at $135 per share, started trading at $150, and hit a record high of $225.64 on June 16.
But as of this writing, SpaceX's stock trades at about $160. Many investors who hopped on the bandwagon in its first four days are now underwater. That volatile market debut should teach investors four valuable lessons about hot IPOs like SpaceX -- and how they should approach OpenAI and Anthropic, two of the market's most eagerly anticipated AI IPOs, in the future.
Image source: Getty Images.
1. Valuations matter When SpaceX went public, it was already valued at 95 times its 2025 revenue of $18.7 billion. At its peak market cap of $2.66 trillion, it was valued at 142 times its trailing sales. Those were sky-high valuations, even for a company that grew its revenue by 33% in 2025. As of this writing, SpaceX is worth $2.1 trillion, or 112 times last year's sales.
OpenAI was most recently valued at $852 billion, and its founders hope to go public with a market cap of $1 trillion. That would be 50 times its annualized revenue run rate of $20 billion at the end of 2025, making it seem more reasonably valued than SpaceX.
Anthropic, valued at $965 billion after its latest funding round, only had an annualized revenue run rate of $9 billion at the end of 2025. If it's also targeting a $1 trillion IPO, it would debut at 111 times its annualized revenue -- making it more comparable to SpaceX.
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2. Profits matter SpaceX was actually profitable in 2025, as Starlink's profits offset its space division's losses. But this year, it acquired xAI (which owns Grok and X) in an all-stock acquisition before its IPO. After recasting its 2025 financials to account for that acquisition, it became deeply unprofitable. The critics claimed that Musk was bailing out xAI at the expense of SpaceX's shareholders.
OpenAI and Anthropic -- which are both unprofitable -- will also be closely scrutinized when they go public. OpenAI is still racking up steep losses, but Anthropic's rapid expansion in the enterprise market (with tools like Claude Code) is quickly reducing its operating losses. Anthropic even expects to post its first adjusted operating profit this year.
So even though Anthropic might go public at a higher price-to-sales ratio than OpenAI, its clearer path toward profitability might attract more investors. OpenAI, which posted a net loss of $38.5 billion on just $13.1 billion in revenue in calendar 2025, faces a tougher uphill battle.
3. The float matters SpaceX floated just 4% of its shares in its IPO. That low supply, along with the market's record demand, fueled its initial rally. It also enabled Elon Musk, who still holds a voting stake of up to 85% through his super-voting shares, to maintain firm control of the company.
In other words, investors are paying a premium to own a tiny sliver of SpaceX and never have a voice in its business decisions. SpaceX will also continue to dilute those investors by issuing more shares to cover its acquisitions and stock-based compensation expenses.
OpenAI and Anthropic plan to follow the same playbook by floating 5%-10% of their shares. Therefore, both stocks could experience volatile market debuts -- and investors shouldn't expect any big institutional investors to sway their business strategies.
4. Retail investors matter Last but not least, we should see if OpenAI and Anthropic deliberately offer their shares to retail investors. SpaceX offered more than 20% of its shares directly to retail investors, generating significant market hype among smaller investors ahead of its market debut.
Some investors might think that SpaceX was "democratizing" the IPO process by allocating more shares to retail brokerages. Still, I believe it was to offset the lower demand from institutional investors who were wary of paying nearly 100 times sales for an unprofitable company. Investors should be cautious if OpenAI and Anthropic do the same thing.
Space Exploration Technologies (SPCX 7.71%) is undeniably a category leader. The company's rocket-launching services dominate the market, and its satellite internet and mobile services are also clear-cut frontrunners in markets with significant long-term growth potential. In addition to those very promising positions, the company is also a compelling player in the artificial intelligence (AI) processing market and is ramping up investments to become a top competitor in the category.
And yet, I'm not ready to buy the stock. Here's why.
SpaceX undeniably has a lot of promise SpaceX provides bleeding-edge technologies across multiple categories. The company revolutionized rocketry by developing launch-and-land rockets that can be reused for subsequent missions. Thanks to these capabilities, the company has been able to provide launch services to third-party customers at very cost-effective price points. The company accounted for roughly 51% of total global orbital launches last year and 85% of total satellite launches.
Image source: Getty Images.
The company's launch capabilities also give it huge advantages in the satellite-based mobile and internet services space. SpaceX's Starlink platform is a leading provider in these categories, and the company's strengths in launch technologies mean it can get communications satellites into space at prices that competitors will likely struggle to match for a long time.
Along with its rocket launch and satellite communication technologies, SpaceX is also rapidly expanding its position in the AI processing market. Of the $28.5 trillion total addressable market (TAM) outlined in the company's initial public offering (IPO) prospectus, management estimates that $26.5 trillion of that TAM comes from AI technologies and services. SpaceX's goal of building a massive constellation of orbital data centers looks highly ambitious and comes with a range of technological challenges, but the company that solved the challenges involved with reusable rockets is arguably the one best positioned to make large-scale, space-based AI processing a reality.
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SpaceX's tech is incredible, but that doesn't mean the stock is right now SpaceX has already delivered revolutionary technologies, and I think there's a good chance its capabilities will play a significant role in advancing key tech trends through the next decade and beyond. The company has achieved laudable breakthroughs and scaling initiatives, and I think it would be a mistake to bet against it continuing to advance its forefront positions at the edges of highly influential tech trends. On the other hand, there is still the question of valuation.
With a market capitalization of roughly $2.07 trillion, the company is valued at roughly 111 times the $18.7 billion in revenue it recorded last year. Admittedly, SpaceX will likely see a meaningful acceleration for its sales growth this year -- with major AI compute deals with Alphabet and other customers aiding its revenue expansion, and strong support for its Starlink and rocket launching businesses also adding to growth.
On the other hand, spending also looks poised to ramp dramatically going forward -- and I think risks related to interest rates and the overall macroeconomic backdrop make SpaceX's valuation profile too risky in the current environment.
Elon Musk’s SpaceX has shown investors a prototype of a “handset-like” AI device, reports The Wall Street Journal.
The prototype is reportedly sleeker and slimmer than an iPhone, making us wonder if it’s something between a small touchscreen phone and a Rabbit R1. SpaceX reportedly showed the device to investors and stakeholders before it went public, and told them it’s at an early enough stage that the design could still change.
Musk has denied the reporting, calling it “utterly false.”
SpaceX, alongside sister company Tesla, does have the manufacturing expertise to pull off mass producing a bunch of AI devices — not to mention access to the chips needed to power any on-device compute. SpaceX has also signaled that it’s keen to expand into wireless, with Starlink Mobile as a potential competitor to Verizon and AT&T. One analyst even went as far as to speculate that T-Mobile or AT&T would make fine acquisition targets for the rocket builder, though such a purchase would, undoubtedly, be pricey.
It’s also not clear if SpaceX is just throwing spaghetti at the wall or if it will attempt to really mass produce and market such a device. But one thing that seems clearer is that if OpenAI is doing it, Musk would, perhaps, want to try to do it better.
As we know, OpenAI is working with Apple’s former chief design officer Jony Ive on an AI device that CEO Sam Altman has claimed will be more peaceful than an iPhone. Reports from last autumn suggest the company has been struggling to get the details right, and OpenAI recently brought on another Apple executive to potentially help move things along. News dropped last week that Paul Meade, Apple’s VP in charge of the Vision Pro headset, has joined OpenAI’s hardware team.
Like OpenAI, SpaceX’s prototype is reportedly designed to run on a proprietary operating system and integrate technology from xAI, Musk’s AI company that SpaceX acquired earlier this year. This would prevent these new devices from being trapped inside another company’s platforms (like Google’s Android). But also, the intent appears to also be to create something new, with native AI interfaces. That said, the graveyard is crowded with the unsuccessful launches of AI devices from companies like Humane and Rabbit. A company wanting to sell an AI device, does not equate consumers wanting to buy such a thing. Yet.
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Rebecca Bellan is a senior reporter at TechCrunch where she covers the business, policy, and emerging trends shaping artificial intelligence. Her work has also appeared in Forbes, Bloomberg, The Atlantic, The Daily Beast, and other publications.
You can contact or verify outreach from Rebecca by emailing [email protected] or via encrypted message at rebeccabellan.491 on Signal.
Key Takeaways SpaceX's stock has seen volatility since the company's IPO nearly three weeks ago, but analysts project significant long-term growth.Analysts highlight the Starship reusable rocket as a pillar of the company's future success, and point to growing AI revenue and the potential for acquisitions as additional reasons for optimism.Risks include high cash burn and reliance on aggressive growth assumptions for future success. Get personalized, AI-powered answers built on 27+ years of trusted expertise.
Wall Street is starting to size up SpaceX (SPCX), and the stock is getting stellar reviews.
Analysts who have launched coverage of the stock since the company's IPO have said SpaceX stands to become "a major hyperscaler" and "the largest communications, cloud and AI company in the world." That positivity isn't translating into gains today—the stock was down 7% at $159 in recent trading—but Wall Street sees plenty of room for gains.
The average price target from three firms that have initiated coverage of the stock recently stands at $203. While well below the $225 all-time high hit two weeks ago, it's more than 25% above current levels, and 35% higher than the opening price for SpaceX shares when they began trading on June 12.
WHY THIS MATTERS TO YOU Elon Musk's space exploration, connectivity and AI company is now a part of major benchmark indexes and the funds that track them, and will be joining some more, which means the stock's performance is likely represented in your retirement account.
The latest bullish view was delivered Tuesday by analysts at Wedbush led by Dan Ives, who initiated coverage of SpaceX with an "outperform" rating and a price target of $190.1 That target is derived from revenue estimates for 2028, which is expected to be the first year that all three of SpaceX's businesses scale.
They view SpaceX's spacecraft and rocket called Starship as "the essential layer" driving the company's success. Its reusability is a strategic advantage from a cost perspective, but also generates a "feedback loop" through which the company can improve its flight rates without driving up capital expenditures, according to Ives and his team. They add that without it, the company's broadband business Starlink would not have reached the scale it has so far, and that SpaceX's ambitions to build orbital data centers would otherwise not be "feasible."
Oppenheimer's Timothy Horan started coverage on the stock on June 11, prior to the company's IPO, with an "Outperform" rating and a $190 price target. A week later, the firm raised the target to $250 following SpaceX's acquisition of AI startup Cursor.2 Horan's models suggest that Cursor revenue will hit $6 billion by the end of this year, raising SpaceX's AI business revenue by 84% to $8.75 billion in the fourth quarter.
Horan expects more acquisitions. SpaceX could, for example, partner with a large language model company such as Anthropic, with the existing lease for the AI shop to use the company's Colossus data center representing the "seed of a deeper relationship." He also thinks the company could buy additional power or data centers on earth, and even acquire its way into becoming a mobile operator given its existing broadband business.
The main risk to SpaceX's otherwise rosy future is that it runs out of money before it reaches its ambitious goals. "Cash burn means the thesis can expire," Ives and his team said in the report. "The bull case requires conviction that the burn converts into a durable franchise before the capital runs ahead of the proof."
Susquehanna Investment Group's Charles Minervino started coverage on June 23 with a "Neutral" rating, and a price target of $170.3 Though the analyst acknowledged the company's dominance in launching rockets, Starlink's "significant runway," its AI offering, and a "proven operator" in Musk, he also said that the company stock—which was then trading around $150—required "premium multiples on very aggressive revenue and EBITDA growth assumptions."
"With some of the markets that SPCX operates in being relatively unproven, we believe a wide range of outcomes exist," Minervino wrote. "This introduces quite a bit of risk into future expectations and therefore would recommend waiting for a better entry point on the stock."
SpaceX stock SPCX fell sharply on Wednesday as investors continued to navigate volatile post-IPO trading.
Shares of Elon Musk's space and artificial intelligence company dropped more than 6% to $159.95 in early trading.
The decline came amid broader weakness in technology and semiconductor stocks.
The Nasdaq Composite fell 0.4%, while the S&P 500 slipped 0.1%. The Dow Jones Industrial Average rose 88 points.
Among other technology names, Micron fell 6%, Sandisk dropped 8%, Nvidia lost roughly 2%, and Broadcom declined about 1%.
The pullback highlights the ongoing debate over SpaceX's valuation following its blockbuster public market debut.
With the stock experiencing significant swings since listing, investors are increasingly looking to analyst assessments for clues about how much upside remains after the company's rapid ascent.
On Tuesday evening, Wedbush analyst Dan Ives initiated coverage of SpaceX with an outperform rating and a $190 price target.
"We view SpaceX as one of the most differentiated assets within the tech market with a strong footprint across its three core markets, with Starlink driving success with connectivity, Starship launches leading to a demand flywheel, and increasing deal flow for its Colossus [AI data centers]," Ives wrote.
According to Ives, Starship remains central to the company's long-term growth strategy.
The analyst argued that the next-generation launch vehicle could reduce the cost of reaching space by roughly 90% compared with Falcon 9 missions, potentially enabling a broader range of commercial opportunities, including orbital AI data centers.
"All of SpaceX's future business runs through Starship, whether it's Starlink's next-generation [satellites], the orbital AI-compute constellation, the Artemis lunar lander, or the cost-and-capacity step the whole forward [valuation] case assumes," Ives wrote.
"The vehicle is the single largest source of value in the franchise as much as its largest risk."
Ives based his valuation on a sum-of-the-parts framework that separately assesses the company's launch, satellite internet, and artificial intelligence businesses.
Under that approach, he values SpaceX's launch operations at approximately $66 billion and Starlink at roughly $600 billion.
The largest component of the valuation is the company's artificial intelligence business, which Ives estimates is worth approximately $1.8 trillion.
He expects AI-related operations to generate more than $80 billion in revenue by 2028, before any contribution from potential orbital AI data centers.
The analysis places significant emphasis on SpaceX's expanding AI ambitions alongside its traditional aerospace operations.
Separately, SpaceX is set to become one of the fastest companies ever added to the Nasdaq-100 index following recent rule changes adopted by Nasdaq.
Nasdaq announced after last Friday's close that SpaceX qualifies for inclusion in the benchmark technology index.
Assuming the company continues to meet eligibility requirements, index-tracking funds and related investment products will begin purchasing shares after the market closes on July 6, with SpaceX officially joining the Nasdaq-100 before trading begins on July 7.
More than $800 billion tracks the Nasdaq-100, including the Invesco QQQ Trust, one of the largest and most actively traded exchange-traded funds.
SpaceX is expected to enter the index with a weighting of less than 1%.
Even with a relatively small weighting, inclusion could create meaningful buying demand because SpaceX's public float remains limited compared with its overall market capitalization.
Index funds and exchange-traded funds tied to the Nasdaq-100 will need to acquire shares to reflect the benchmark's revised composition, while active managers benchmarked against the index may also adjust positions.
Three weeks after the largest IPO in history, the story investors tell about SpaceX is still mostly about rockets and Starlink.
That’s understandable — but it misses where the company is actually headed. Two of the most consequential developments since the June 12th debut happened nowhere near a launchpad: the transformation of the xAI division from a cash furnace into a genuine revenue engine, and the public launch of X Money, Elon Musk’s long-promised financial “everything app.”
SpaceX stock soared to nearly over $225 per share in its first week of public trading before coming back down near IPO levels. With the company’s first earnings report as a public entity now weeks away, these threads deserve a closer look.
Image Source: StockCharts
Is the xAI Transformation Just Hype?Start with xAI, which was the single biggest drag on SpaceX’s profitability last year. The AI unit posted a roughly $6.4 billion operating loss for 2025, and skeptics rightly flagged it as the riskiest piece of the SpaceX empire. But the picture has shifted quickly.
In May, Anthropic signed a contract worth $1.25 billion per month to purchase all the compute capacity at xAI’s Colossus 1 data center in Memphis, which houses roughly 220,000 Nvidia GPUs. Then in June, Google agreed to pay $920 million monthly for cloud compute from Colossus to help power its Gemini models, at a reduced rate through September and the full rate until 2029.
The significance is hard to overstate: between the Anthropic and Google deals, the entire company’s revenue run-rate is set to more than double. A division that was pure burn is suddenly selling its excess compute to two of the most sophisticated buyers in AI — a striking validation of the infrastructure Musk assembled.
That said, xAI remains an enormous consumer of capital. AI accounted for roughly 76% of the group’s total capital expenditures in the first quarter, with xAI still burning billions annually. First-quarter AI capex ran about $7.7 billion, implying something in the $30 billion range for the full year.
The long-term vision ties xAI back to the core space business through “Starmind” — a planned constellation of up to one million AI satellites designed to run inference in orbit. It’s an audacious idea, and whether it becomes real infrastructure or remains a slide in a deck is one of the central questions for patient shareholders. On the product side, Grok 4.5 recently entered private beta, with Musk claiming its performance rivals or exceeds Anthropic’s Claude Opus — a claim worth noting but not yet independently established.
X Money Promises Eye-Popping YieldThe second development is arguably the more intriguing for retail investors, because it was hiding in plain sight. X Money officially launched in late June for U.S. Premium subscribers, with full availability targeted for mid-2026.
This is not a tip jar. The product offers a 6% annual yield on deposits, a personalized metal Visa debit card, peer-to-peer transfers, 3% cashback, and FDIC insurance structured to cover up to $10 million for top-tier subscribers.
The strategic logic rests on distribution: X has more than 560 million monthly active users and 245 million daily users, a built-in audience most fintechs would envy. And the AI layer is the differentiator — analysts note that with xAI funded, X can push beyond being a Cash App rival toward an “agentic banking” interface, positioning it in the emerging world of AI-driven commerce.
But let’s remember, the U.S. market is already saturated with entrenched players like PayPal, Venmo, Cash App, Zelle, and Apple Pay, and every prior attempt at a Western “super app” has hit the same ceiling. American consumers, already deeply banked and served by best-in-class single-purpose apps, have historically resisted the all-in-one model that made WeChat indispensable in China.
Which brings us to the event that will put numbers behind all of this: the first earnings report. SpaceX hasn’t officially confirmed the date, but it’s expected in early August, with several sources pointing to August 6th. This first reported quarter sets the tone for all three segments simultaneously and triggers the initial lock-up early release, so outsized volatility around the date should be expected regardless of results.
In keeping with the company’s ethos, the disclosure itself will be unconventional: SpaceX has said it will release financial results only through its website and its X account, bypassing the traditional newswire services entirely. It’ll be worth watching xAI’s bottom line now that the Anthropic and Google revenue is beginning to flow, alongside Starlink’s subscriber trajectory and any concrete update on Starship’s path to orbital payload delivery.
Bottom LineStepping back, the synthesis is what matters.
SpaceX (SPCX - Free Report) is no longer a rocket company that happens to own a satellite network — it is a bet on whether one founder can simultaneously operate a launch monopoly, a Starlink cash machine, a frontier AI lab, and now a consumer bank.
The bull case is that Starlink’s profits fund the moonshots while xAI begins to monetize and X Money adds free upside. The bear case is equally coherent: reputable sources peg the fair value of the current business at roughly $780 billion — less than a third of the market capitalization — and the lock-up calendar promises a steady wave of supply, beginning after this very earnings report.
That first report, and the analyst estimates that follow it, will begin to fill in the blanks. Until then, SpaceX remains one of the most fascinating — and most richly valued — stories in the market.
Wedbush has initiated coverage of SpaceX Corp (NASDAQ:SPCX) with an 'outperform' rating and a $190 price target, implying 16% upside from Tuesday's close of $163.33, arguing the company is becoming a hyperscaler in its own right rather than just a rocket company.
Dan Ives and his team frame SpaceX as three vertically integrated businesses: Starlink connectivity, Starship launch, and an AI segment built around Colossus compute clusters and the Grok model.
Starlink is doing the heavy lifting on profitability, with roughly 12 million subscribers as of June 5 and average revenue per user of about $66 across its enterprise and consumer base. Wedbush estimates SpaceX still holds less than 1% of the global telecom and broadband market, leaving what it calls "early innings" of penetration.
Capital keeps flowing
The analysts point to SpaceX's roughly $86bn IPO haul, about a fifth of which is earmarked for AI infrastructure, as sufficient funding for the near term while the company works through its debt. Wedbush expects further financing to follow given the scale of the AI ambitions.
Starship as the swing factor
Reusability remains the strategic edge, according to the note, cutting hardware costs while building a flywheel that improves flight rates without a corresponding jump in capital spending. The new Starship models are expected to carry around 60 Starlink satellites per launch, more than double the 27 carried by Falcon 9, which the analysts argue makes the rocket essential not just to the launch business but to the broadband and orbital compute ambitions layered on top of it.
Where the valuation comes from
Wedbush's $190 target is built on a sum-of-the-parts valuation using FY28 estimates, implying roughly $2.48 trillion of enterprise value.
Connectivity is valued at 17 times revenue given its high-margin, recurring subscriber base; AI and compute carry the richest multiple at 22 times, reflecting a contracted compute book with Anthropic, Google, and Reflection AI worth an annualised run rate of roughly $28bn; and Space carries the lowest multiple at 9 times given its capital intensity and lumpier earnings profile.
The analysts are explicit that this excludes several potential upside drivers, including sub-$200 per kilogram launch economics, orbital data centres, and enterprise AI monetisation, all of which they see as optionality rather than base-case value given the execution hurdles still ahead, including Starship's need to demonstrate orbital delivery, upper-stage catch and in-orbit propellant transfer.
Wedbush's bull case puts the target at $235, its bear case at $135.
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 about 31% of SpaceX free float — Ortex dataCost to borrow still relatively cheap at 1% from as high as 14% at launchShorts sitting on mark-to-market losses of about $760 mln since IPO, Ortex saysNo squeeze yet, but if shares rebound short sellers could be hitNEW YORK, July 1 (Reuters) - Short sellers are betting SpaceX's(SPCX.O), opens new tab will resume its post-debut decline with nearly a third of its tradable shares now sold short — even as those wagers have already cost them nearly three-quarters of a billion dollars in paper losses.
The sizeable short position could inject further volatility into the stock, with every $1 SpaceX share price swing translating to roughly $200 million in gains or losses for shorts, Ortex estimates.
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Short sellers, who sell borrowed shares in the hope of buying them back at a profit when the stock slips, were emboldened after SpaceX shares' initial burst of strength gave way to weakness and the share price slipped as much as 23% in the days following its June 12 market debut.
Short interest now stands at 196 million shares, about 31% of the free float, through Tuesday, up from some 83 million shares, or 13% of the free float, a week ago, Ortex data showed.
"(The rise in short bets) is extraordinary for a stock that has been public less than a month," said Ortex co-founder Peter Hillerberg.
SpaceX's more than $2 trillion valuation makes it a target for short sellers skeptical of its rich price tag, 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.
SpaceX shorts are sitting on mark-to-market losses of about $760 million since the IPO, Ortex estimates.
When the stock bottomed near $153 last week they were up around $2.5 billion on paper, but the rebound in SpaceX shares since has wiped all of that out, Ortex data showed.
"SpaceX has been a roller coaster for the short sellers," Hillerberg said.
The cost to borrow SpaceX shares, a gauge of demand to short a stock relative to the supply of shares available to lend, remains relatively cheap at about 1%, Ortex data showed.
Given the number of shares sold short relative to the total tradable shares available, should SpaceX's stock price continue to rebound, short covering — where bearish investors are forced to buy shares to close out their wagers to avoid further losses — has the potential to push the shares even higher, Hillerberg said.
"(It's) a lot of potential fuel if it tips into a squeeze," he said.
Reporting by Saqib Iqbal Ahmed Editing by Nick Zieminski Editing by Nick Zieminski
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Space Exploration Technologies (SPCX 6.36%) and its record-setting IPO have arguably been the biggest story in the stock market this summer. And now that Elon Musk’s mammoth company is finally public, analysts are starting to weigh in on the merits of SpaceX.
On Wednesday, Wedbush Securities and analyst Dan Ives initiated coverage on SpaceX stock, assigning an “Outperform” rating and a price target of $190, representing potential upside of 18% from its price at this writing.
Considering that SpaceX has been a roller coaster since opening at $150 on June 12, rising as high as $225 before giving back most of those gains, will Ives’ bullish outlook give investors reason to consider SpaceX stock now?
Wedbush’s rosy outlookIves, the managing director of Wedbush, has been one of the most visible and influential tech analysts on Wall Street, particularly involving key artificial intelligence stocks. Wedbush has even started an exchange-traded fund under his name, the Dan Ives Wedbush AI Revolution ETF, built around his research.
Image source: Getty Images.
Ives writes in his coverage that SpaceX is a future major hyperscaler with "one of the most differentiated assets within the tech market" with its connectivity, launch, and AI infrastructure segments. The firm’s $190 price target reflects fiscal year 2028 revenue estimates that imply an enterprise value of approximately $2.48 trillion.
The primary profitability driver, Ives wrote, is the company’s Connectivity division, which includes the Starlink global satellite internet constellation, comprising 9,600 satellites in low Earth orbit. Starlink provides mobile and broadband services in 30 countries and six continents, currently serving more than 10.3 million customers.
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Ives wrote that Starlink is "still in the early innings of penetrating the global telecom and broadband market," noting that SpaceX has less than 1% market share. Starlink is also bolstered by SpaceX’s rocket-launching business and the development of its Starship space vehicle. Starship, once fully operational, is expected to carry 60 Starlink satellites per launch, up from 27 on the company’s smaller Falcon 9 rockets. Ives calls it "an incremental driver of its highly profitable broadband connectivity business."
The long play is AIWhile Starlink is SpaceX’s only profitable business right now, AI represents the biggest opportunity for Musk’s company. According to SpaceX’s prospectus, AI represents a massive $26.5 trillion market opportunity. The AI division, which includes the X social media platform and the Grok large language model and chatbot, had $3.1 billion in sales in 2025, but lost $6.35 billion over the year.
However, SpaceX aspires to turn its AI division into a hyperscaler, using a satellite network and solar power to provide computing capacity that could generate billions in annual revenue. SpaceX already has deals with Alphabet, Anthropic, and Reflection AI to provide computing capacity in terrestrial data centers. SpaceX is expected to generate $2 billion per month from those contracts.
Ives said that AI and computing capacity are "still in early innings over the next decade," but have the potential for long-side upside for SpaceX stock.
Even with Wedbush’s outlook, SpaceX will be a volatile stockIPO stocks often struggle to hold their gains in the first few months after going public, and SpaceX has been no different so far. Even with Wedbush’s coverage today, SpaceX stock is down about 6% in morning trading.
The stock trades at an extreme valuation, with a price-to-sales ratio of 115.6, suggesting investors are pricing in expected performance beyond the company’s current financials.
SpaceX has a huge opportunity, particularly in AI, but it will also incur significant expenses that will likely weigh on the stock. Goldman Sachs, the lead underwriter for the IPO, projects that the company’s revenue will jump from $6.6 billion in 2025 to $352 billion by the end of the decade. But to make that happen, SpaceX plans to spend $350 billion in capital expenditures by 2030.
Whether you are swayed or not by Ives’ coverage and bullish take, investors in SpaceX should expect plenty of ups and downs in the years ahead.
Wedbush has initiated coverage of SpaceX Corp (NASDAQ:SPCX) with an 'outperform' rating and a $190 price target, implying 16% upside from Tuesday's close of $163.33, arguing the company is becoming a hyperscaler in its own right rather than just a rocket company.
Dan Ives and his team frame SpaceX as three vertically integrated businesses: Starlink connectivity, Starship launch, and an AI segment built around Colossus compute clusters and the Grok model.
Starlink is doing the heavy lifting on profitability, with roughly 12 million subscribers as of June 5 and average revenue per user of about $66 across its enterprise and consumer base. Wedbush estimates SpaceX still holds less than 1% of the global telecom and broadband market, leaving what it calls "early innings" of penetration.
Capital keeps flowing
The analysts point to SpaceX's roughly $86bn IPO haul, about a fifth of which is earmarked for AI infrastructure, as sufficient funding for the near term while the company works through its debt. Wedbush expects further financing to follow given the scale of the AI ambitions.
Starship as the swing factor
Reusability remains the strategic edge, according to the note, cutting hardware costs while building a flywheel that improves flight rates without a corresponding jump in capital spending. The new Starship models are expected to carry around 60 Starlink satellites per launch, more than double the 27 carried by Falcon 9, which the analysts argue makes the rocket essential not just to the launch business but to the broadband and orbital compute ambitions layered on top of it.
Where the valuation comes from
Wedbush's $190 target is built on a sum-of-the-parts valuation using FY28 estimates, implying roughly $2.48 trillion of enterprise value.
Connectivity is valued at 17 times revenue given its high-margin, recurring subscriber base; AI and compute carry the richest multiple at 22 times, reflecting a contracted compute book with Anthropic, Google, and Reflection AI worth an annualised run rate of roughly $28bn; and Space carries the lowest multiple at 9 times given its capital intensity and lumpier earnings profile.
The analysts are explicit that this excludes several potential upside drivers, including sub-$200 per kilogram launch economics, orbital data centres, and enterprise AI monetisation, all of which they see as optionality rather than base-case value given the execution hurdles still ahead, including Starship's need to demonstrate orbital delivery, upper-stage catch and in-orbit propellant transfer.
Wedbush's bull case puts the target at $235, its bear case at $135.
That’s how much of the global telecom and broadband market Starlink has penetrated, according to Ives, despite growing to roughly 12 million subscribers with an average revenue per user of about $66 across its consumer and enterprise offerings.
For Ives, that isn’t a sign of maturity—it’s evidence that SpaceX’s largest business is still in its earliest stages.
The Starlink OpportunityInitiating coverage on SpaceX with an Outperform rating and a $190 price target, Ives argued that Starlink remains the company’s primary profitability engine thanks to its recurring subscription revenue.
More importantly, he believes the satellite internet business has barely scratched the surface of its addressable market.
With less than 1% penetration of the global telecom and broadband opportunity, Ives sees significant room for subscriber growth even before accounting for newer initiatives such as direct-to-device cellular connectivity.
That recurring revenue base also differentiates SpaceX from traditional aerospace companies, providing investors with a business that resembles a telecommunications platform as much as a launch provider.
More Than RocketsWhile SpaceX is widely associated with reusable rockets and ambitious Mars missions, Wedbush’s investment thesis places Starlink at the center of the story.
The firm’s note argues that the launch business and Starship’s expanding payload capacity ultimately serve a larger purpose: enabling Starlink to deploy satellites more efficiently, expand network capacity and reinforce what has become the company’s most profitable segment.
In other words, the rockets increasingly support the broadband business—not the other way around.
That dynamic is one reason Ives believes SpaceX should be viewed as more than a space company, describing it as a future hyperscaler with businesses spanning connectivity, launch services and AI infrastructure.
The Bigger PictureFor investors, the less-than-1% figure helps explain why SpaceX continues to attract bullish long-term forecasts despite already commanding a market capitalization above $2 trillion.
Rather than focusing on the subscribers Starlink has already added, Ives is focused on the customers it has yet to reach.
If satellite broadband continues expanding into underserved markets while direct-to-device services gain traction, today’s 12 million subscribers could represent only a fraction of Starlink’s long-term opportunity.
That makes the smallest number in Wedbush’s initiation note arguably its most important one. For Ives, SpaceX’s bull case isn’t built on what Starlink has already achieved—it’s built on how much of the market still remains untapped.
Image via Shutterstock
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Elon Musk Loses Trillionaire Status As SpaceX Slide Cuts Net Worth By $50 Billion Ty Roush is a breaking news reporter based in New York City.
Jul 01, 2026, 12:33pm EDT
ToplineElon Musk on Wednesday lost his trillionaire status as sliding SpaceX shares lowered his fortune by more than $50 billion, the latest stock decline for the rocket maker despite newfound optimism from one of the best-known analysts of Musk’s Tesla.
A well-known analyst of Musk’s Tesla offered a bullish take for the rocket maker.
2024 Invision
Key FactsShares of SpaceX dropped 7.1% as of Wednesday afternoon, a reversal from the nearly 12% jump over the three previous trading sessions.
Another decrease in SpaceX’s share price cut Musk’s net worth by $57.8 billion to $995.2 billion, as Musk holds 4.8 billion SpaceX shares and another 350 million stock options with an exercise price of $8.40 per share.
Space Exploration Technologies (SPCX 3.21%) made its public debut this month, and demand was so intense that the stock quickly shot up to $225 per share from its original $135 initial public offering (IPO) price. The hype has since died down, and SpaceX is currently trading near $150 as of this writing. So how do investors decide whether to buy, hold, or sell in light of this pullback?
First, we must consider the price dip itself and whether it is truly an opportunity, a warning, or just short-term noise to ignore. There really isn't much analyst consensus on SpaceX. Price targets range from an absurdly high $310 to $62 per share, so different conclusions can be reached from the outset.
Only time will tell who has the correct take on Elon Musk's multi-trillion-dollar business. However, this dip is likely driven by a combination of fears and concerns about SpaceX's debt load, inflated valuation, and ability to grow revenue to justify that sky-high valuation.
Image source: The Motley Fool.
SpaceX announced it would issue $25 billion in bonds this week, following its record-breaking $85 billion IPO raise. The additional debt has some investors concerned. Lastly, insider lockups will expire in the coming months, which could trigger a selling spree that pushes the stock lower. With all that said, this dip is generally reactionary and not necessarily tied to SpaceX's financials. The company hasn't even released its first quarterly earnings report.
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Should you buy? While SpaceX's price is still inflated, there's a bull case to consider: the businesses it owns and their growth trajectory. The subsidiary Starlink, a satellite Internet network, is globally scalable and already generates recurring revenue. SpaceX also owns xAI, which lags competitors, but could catch up over time and eventually become profitable. SpaceX, of course, currently dominates the medium-lift reusable rocket market.
There's a lot of potential revenue in a diversified portfolio. Success stories like Amazon, which is both an e-commerce platform and a leading cloud provider, show what is possible with successful execution and a long enough time horizon.
Should you hold? If you already hold SpaceX shares, the stock will be volatile for the foreseeable future, and trying to time the market isn't a winning strategy in the long run. It's going to take years for revenue to catch up with valuation. Right now, SpaceX trades at more than 100 times its sales. Holding the stock will require the stomach to handle price swings.
The stock has been trading for less than a month, so holding is a reasonable option because investors haven't given the company nearly enough time to find its footing.
Should you sell? If you bought SpaceX and the stock has become too concentrated in your portfolio, or you find yourself unable to handle the volatile price swings, you may want to consider reducing your position. Or perhaps you've become bearish on the space industry and on SpaceX's ability to become a profitable, cash-flowing machine. In that case, selling makes sense.
There isn't one right answer when it comes to buying, holding, or selling any stock. In general, it's best to buy and hold for a minimum of five years to give stocks a chance to grow and weather any market downturns. In the case of SpaceX, investors need patience, a high risk tolerance, and the ability to wait for revenue to catch up with the more than $2 trillion valuation.
That may not happen for several years. Your personal portfolio goals are what matter most.
The Space Exploration Technologies (SPCX 4.50%) initial public offering (IPO) is behind us. After its market capitalization soared from $1.77 trillion to $2.5 trillion, the company's valuation has finally settled somewhere around $2 trillion. Looking to buy the dip? There is one reason you may want to wait.
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Aug. 6 could change everything for SpaceX While the exact date is still to be determined, SpaceX is currently expected to report its first earnings as a public company around Aug. 6. The details revealed during this announcement should have a meaningful impact on the stock price. But there's another catalyst arriving that day that could have an equally big impact.
When SpaceX went public, less than 5% of its total outstanding shares were made available for sale. This limited float made the stock relatively volatile, given that supply and-demand dynamics could quickly go out of balance.
Image source: Getty Images.
When SpaceX reports quarterly earnings, however, it will unlock between 20% and 30% of its outstanding shares. In a nutshell, this means that 20% to 30% of the company's outstanding shares -- mostly held by employees, management, and early investors -- will be eligible to sell on public markets. For reference, less than 5% of the company's outstanding shares were eligible for sale during the IPO. The rest were considered "locked", with certain "unlocking" period in the weeks and months following the IPO.
The impact of unlocking schedules can be difficult to predict. But one thing is clear: SpaceX's publicly traded share count will skyrocket in August, with many longtime investors now eligible to sell and book a potentially hefty profit. If you're nervous about the company's current $2 trillion valuation, you may want to wait to see whether this lockup event will provide a better entry point.
Ryan Vanzo 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 +4.15%), or SpaceX, roared out of the gate following its initial public offering on June 12, reaching an intraday high of roughly $225.64 per share on June 16. As of this writing, the company's share price is down roughly 27% from that high point.
SpaceX has leading positions in rocket-launching technologies and satellite internet and mobile services, and it appears to be in the early stages of building a top artificial intelligence (AI) services business. Should investors buy the stock following its substantial valuation pullback?
Image source: Getty Images.
Does SpaceX stock offer compelling value right now? SpaceX still has a market capitalization of roughly $2.16 trillion. At that valuation, the company trades at approximately 115 times last year's $18.7 billion in revenue. SpaceX posted annual sales growth of 33% in 2025, and there's a good chance the business is actually poised for meaningful acceleration when it comes to revenue growth this year, thanks to new AI processing contracts, expansion for the adoption of Starlink services and product portfolios, and continued growth for its rocket-launching services.
But there's a good chance that SpaceX's net loss will also expand significantly from last year. The business posted a net loss of roughly $4.9 billion last year, with its AI business accounting for the vast majority of those losses. Notably, the AI unit is the focal point of the company's growth ambitions -- and massive infrastructure spending this year should lead to a large increase in the business's net loss.
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Even though SpaceX has seen a big valuation pullback following its post-IPO high, the company still trades at an enormously growth-dependent valuation. The likelihood that the company's net loss will jump significantly this year presents a big risk factor, and that isn't the only potential valuation headwind on the horizon. If investors become less willing to assign big valuation premiums to AI processing and space tech stocks, SpaceX stock could continue to tumble.
With that in mind, I think that investors who want to own a piece of the company will be best served by waiting for a better entry point.
Keith Noonan 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.
Even after cooling off from its post-IPO rally, Space Exploration Technologies (SPCX +4.15%), better known as SpaceX, has a market cap of $2.25 trillion and is one of the most valuable companies in the world. Based on its revenue of about $19.3 billion over the past four quarters, SpaceX has a price-to-sales ratio of about 116.
Let's be clear. That's an incredibly high multiple. Some of the most rapidly growing AI infrastructure stocks trade for P/S multiples in the 40-50 range. The average S&P 500 company trades for about 3x sales. But there's more to the story. The price-to-sales ratio of 116 is a backward-looking metric. The more important thing to consider is whether SpaceX's revenue in 2027, 2028, and beyond will justify it.
Image source: Getty Images.
What will SpaceX's revenue be? SpaceX's revenue is a unique situation because its trailing 12-month revenue and what investors should expect going forward are two different things.
The biggest reason is SpaceX's recent AI compute deals. Between three separate deals with Anthropic, Alphabet's (GOOGL +1.09%)(GOOG +0.67%) Google, and Reflection AI, SpaceX will be receiving about $2.32 billion per month in AI compute revenue once all three deals are in effect (starting in October). That's $27.8 billion in annual revenue from these three deals alone.
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Beyond the AI compute deals, it's important to point out that SpaceX's Starlink satellite internet service grew revenue by 50% year-over-year in 2025 and has barely scratched the surface of its addressable market opportunity. Plus, once SpaceX's much larger Starship rocket begins commercial flights, it could be a big revenue growth driver.
SpaceX's revenue will almost certainly grow substantially in the second half of 2026 and beyond. Looking ahead to 2027, there's a solid base case to be made that SpaceX will get about $22-24 billion in revenue from Starlink, $30 billion from xAI (including the AI compute deals, the X social media platform, and Grok, and about $6 billion from the rocket launch business, for a total of about $59 billion. This would give SpaceX a much lower P/S multiple of 38 based on its current valuation, and revenue could potentially be even higher if the company gets additional AI compute deals.
The biggest caveat is that even a P/S of 38 is expensive, and we have no idea whether SpaceX will be profitable in 2027. There will likely still be a lot of future revenue and earnings growth priced into the stock. The bottom line is that (assuming its AI compute deals produce the three years of revenue that is expected) SpaceX's stock is effectively much less expensive than its 116x P/S multiple implies. But it's still an expensive business. Approach it with that in mind.
Matt Frankel, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.
The thesis is straightforward: SpaceX (NASDAQ:SPCX) gets added to the Nasdaq-100 on July 7, and every index fund, ETF and benchmark-tracking pension on the planet has to buy it whether they like the valuation or not. That is mechanical demand against a float that has been public for 11 trading days, and it is the cleanest forced-flow catalyst the market has seen in years.
The Catalyst Is Already Priced In, but Not Enough Nasdaq announced the inclusion after Friday’s close, calling it one of the quickest ever additions to the high-profile index following last month’s rule change. Prediction markets have caught on. Polymarket is currently pricing a 92% probability that SPCX closes the week of June 29 above $145, with the single most-favored outcome being a close above $175 at 31% implied probability. The stock is already up 6% over the past week heading into the trigger date. Funds front-running the rebalance are buying now, not on July 7.
The Revenue Story Has Quietly Doubled The bear case rests on a stale revenue number. SpaceX did $18.7 billion in 2025 revenue, up 33% year over year, with a GAAP loss. That was the pre-xAI company. Post-merger, the AI segment has signed contracts totaling $27.8 billion in annual revenue with Anthropic, Alphabet and Reflection AI.
The Anthropic deal alone pays $1.25 billion per month for roughly 300 megawatts of Colossus compute. The Google deal adds $920 million per month for about 110,000 GPUs through 2029. Stack that on Q1 2026 sales of $4.7 billion, and the company is tracking to $38.6 billion in revenue this year. That is a hyperscaler growth profile that did not exist six weeks ago.
Wall Street Targets Confirm The Upside Current price sits around $170. The consensus analyst target is $187.80, implying 11% upside before the index buying even begins. Sentiment has moved with the setup, with the composite score climbing +14.95 over the past seven days.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and SpaceX didn't make the cut. Grab the names FREE today.
Defiance ETFs CIO Sylvia Jablonski put it bluntly, arguing “investors are underestimating SpaceX by viewing it solely as an aerospace company” and pointing to Starlink and AI connectivity as the underappreciated legs of the story.
The Valuation Risk, Dismissed The pushback writes itself: The stock trades at 112 times trailing sales, which is the wrong number to anchor on. On forward revenue of $38.6 billion, the multiple compresses to roughly 54 times sales, and that figure shrinks every quarter the hyperscaler deals scale. Palantir trades at 37 times forward sales with materially slower growth. SpaceX is growing the top line at a rate that closes that gap inside of two reporting cycles.
The catalyst is dated, the buyers are forced, and the revenue trajectory has already re-rated. Investors positioning ahead of July 7 are making a straightforward call.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and SpaceX didn't make the cut. Grab the names FREE today.
Wedbush analyst Sam Brandeis issued a note on June 30 in which he positioned SpaceX (NASDAQ: SPCX) stock as ‘Outperform’ – ‘Buy’ – and forecasted the equity’s price would rise to $190 in the next 12 months for an 11.20% rally from the latest $170.86 close.
According to the Wall Street expert, Elon Musk’s newer public company is in a strong position to join the ranks of ‘hyperscalers’ and boasts multiple bullish differentiators.
Indeed, SpaceX launch capabilities, connectivity, and artificial intelligence (AI) infrastructure all help ensure strong vertical integration for the company.
Brandeis also specified that some of the firm’s strongest assets are the Starship ‘demand flywheel,’ the connectivity ‘footprint’ of Starlink, and the growing network of partnerships for the Colossus data centers.
Lastly, the analyst from Wedbush noted that the 24-year-old, $2.25 trillion company is still in the early stages of penetrating the global markets with regard to the global broadband and telecom markets.
SpaceX stock regains uptrend after deep correction Sam Brandeis’ analysis came amidst a trend reversal for SpaceX stock – its second since the June 12 initial public offering (IPO). Specifically, SPCX shares were originally offered at $135 but soared to $150 already in the morning of the IPO before climbing to their all-time high (ATH) of $225.64 within less than a week.
A bond offering paired with the selling opportunity presented by the rapid upsurge, however, presented powerful headwinds, and SpaceX stock crashed to its $153 closing price by June 25 for a 32.19% loss from the ATH.
By press time on July 1, Elon Musk’s newer company is again climbing, likely to a mix of factors including the buying opportunity presented by the price collapse and the confirmation that the firm would be included in the Nasdaq-100 on July 7.
SPCX stock found its latest close at $170.86 and rallied another 1.68% to $173.73 in the subsequent extended session.
SpaceX stock price one-week chart. Source: Google SpaceX stock technical analysis Simultaneously, technical analysis (TA) shared by the popular on-chain analyst on X, Ali Martinez, indicates that SpaceX stock is, given the latest uptrend, now aiming for $180 thanks to the decisive breakout above $165.
In early June, Marinez cautioned against rushing into the SPCX IPO, arguing that the shares are likely to crash soon after the initial rally, thus presenting a safer and superior buying opportunity later in their lifetime.
Featured image via Shutterstock
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Space Exploration Technologies (SPCX +4.06%) went public on June 12. It was the largest IPO (initial public offering) in history by two metrics: The company raised a record $75 billion, and its market value was a record $1.7 trillion at the IPO price of $135 per share.
As of June 30, SpaceX trades at $170 per share, about 26% above its IPO price and 16% below its post-IPO peak. But Wall Street thinks the stock is undervalued. Among 11 analysts following the company, SpaceX has a median target price is $227 per share, implying 33% upside from its current price.
If the Wall Street consensus is correct, $10,000 invested in SpaceX today would be worth about $13,300 by July 2027. But history says the stock could plunge in the coming months. Here's what investors should know.
Image source: Getty Images.
SpaceX values its total addressable market at $28.5 trillion SpaceX is best known for its reusable rockets and satellite-based broadband, but the company actually breaks its business into three operating segments: space, connectivity, and artificial intelligence (AI). Those segments are discussed briefly below:
Space: Revenue comes from launch and mission services. SpaceX has a competitive advantage in cost efficiency. Its Falcon 9 rocket lowered the cost to reach orbit by 85% compared to the historical average, and the next-generation Starship will reduce costs by 99%. Connectivity: Revenue comes from satellite-based broadband internet and mobile services. SpaceX operates the world's largest satellite constellation (Starlink) as measured by subscribers and orbital satellites. Artificial Intelligence: Revenue comes from infrastructure and application services. SpaceX subsidiary xAI operates massive data centers that collectively form a supercomputer called Colossus, which itself is the largest AI training cluster in the world. In the first quarter of 2026, SpaceX's revenue increased 15% to $4.7 billion. Connectivity services accounted for 70% of total sales, while the space and AI segments each contributed about 15%. However, SpaceX reported a net loss of $4.3 trillion. That was a much steeper loss than $528 million in the same quarter last year, primarily due to soaring R&D costs in the AI segment.
Going forward, SpaceX is arguably the company best positioned to build and deploy orbital data centers (i.e., space-based data centers) due to vertical integration that spans rockets, satellites, and AI. CEO Elon Musk says orbital data centers are the only logical way to scale AI compute in the long run, as abundant solar energy and cold temperatures could overcome the power and cooling constraints that limit terrestrial data centers.
With that in mind, SpaceX values its total addressable market at $28.5 trillion. That figure includes $370 billion from the space segment and $1.6 trillion from the connectivity segment, but the company attributes the remaining $26.5 trillion to the AI segment.
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SpaceX is twice as expensive as the most richly valued stock in the S&P 500 SpaceX is undoubtedly an interesting company with lofty ambitions, but that doesn't necessarily make it a smart investment. Prospective investors trying to determine whether SpaceX belongs in their portfolios should consider two massive headwinds:
Stocks that go public with large market values have historically performed poorly. Among the 15 largest U.S. IPOs since 2006 (by market value at the IPO price), the average stock fell 50% at some point during the first year. The average stock also finished the first year 33% below its IPO price, according to data from First Trust and Bloomberg. SpaceX's sales totaled $19.3 billion over the last four quarters, and its market value is currently $2.3 trillion. Those numbers bring its price-to-sales (PS) ratio to 114. That is an absurdly expensive valuation that very few companies have ever achieved. For context, Palantir Technologies is currently the most richly valued stock in the S&P 500 at 54 times sales. SpaceX is literally twice as expensive. Meanwhile, SpaceX is also growing much more slowly. Palantir reported revenue growth of 85% in the first quarter, while SpaceX reported revenue growth of 15%.
Here's my honest opinion: Investors should avoid SpaceX right now. Wall Street's median target price may prove accurate, but large IPO stocks have typically crashed during their first year of trading in public markets. That outcome is especially likely with SpaceX given its incredibly expensive valuation.
Space Exploration Technologies' (SPCX +4.06%) recent IPO was a massive success. However, serious questions remain about the company's outlook and its eventual ability to turn a profit. Much of that will depend on SpaceX's biggest growth driver, Starlink, which provides internet connectivity services through a constellation of Low Earth Orbit (LEO) satellites. But SpaceX could also make progress in its space segment, leading to much better margins and profits. And a potential milestone it could reach within 15 days will tell us more about whether SpaceX can meaningfully improve the economics of its space business.
Image source: The Motley Fool.
SpaceX's next-gen rocket SpaceX has transformed the space travel industry thanks to its pioneering work with reusable rockets. But there remains plenty of work to be done. The company's next-gen rocket, Starship, is currently in the test flight phase. Starship is central to SpaceX's long-term ambitions. Unlike the company's already highly successful Falcon 9 rocket, Starship was developed to be fully reusable. It could help decrease launch costs by 95% compared to Falcon 9. Starship is also much taller and has a much larger payload capacity.
SpaceX has completed 12 Starship flight tests, with the latest one introducing the newest version, dubbed V3, of the rocket. Right before the company's IPO about three weeks ago, SpaceX's COO, Gwynne Shotwell, said the 13th Starship flight test would take place in about a month -- which puts us at roughly mid-July at the latest. Shotwell also said she expects regular monthly flights for the rocket thereafter.
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Is SpaceX stock a buy? Another successful Starship flight test would bolster the bull case for SpaceX. However, there are reasons to remain skeptical about the company's future. Here are three of them. First, the company is not consistently profitable. In 2025, it posted a net loss of $4.9 billion, far worse than the $791 million in net income reported in 2024. Unprofitable companies can be attractive if their growth prospects look strong, which brings us to our second point: Average revenue per user (ARPU) within SpaceX's most important segment, Starlink, is declining. In the first quarter of 2026, Starlink's ARPU was $66, down from $86 in Q1 2025, and significantly lower than the $99 it recorded in 2023.
While Starlink subscribers continue to grow at a good clip, the declining ARPU may eventually lead to lower margins, especially as the company starts facing more competition and pricing pressure. One possible solution is for SpaceX to reduce the cost of launching LEO satellites. So the situation is by no means hopeless. Still, investors need to monitor Starlink's declining ARPU. Third, SpaceX might face significant regulatory headwinds over the long run, especially given that it relies on contracts from the U.S. federal government for 20% of its revenue.
So, what's the verdict? SpaceX could deliver life-changing returns if it can make significant progress with Starship and other initiatives, but the stock remains highly risky, especially at current levels. I'd wait for a major pullback before initiating a position.
On June 12, SpaceX (SPCX +4.06%) completed the largest initial public offering (IPO) in history, raising about $85.7 billion after underwriters exercised their overallotment option. Less than a month later, the company is about to become something more than just a hot new stock, but also one that millions of people will own indirectly without ever choosing to buy it.
Before the market opens on July 7, the company will join the Nasdaq-100, the index that sits behind the Invesco QQQ Trust (QQQ +1.70%) and a long list of 401(k) and retirement-plan funds. More than $800 billion is benchmarked to that index, and all of it now has to make room for Elon Musk's rocket company.
Here's what that actually means if you hold a Nasdaq-100 fund.
Image source: Getty Images.
Why some funds will have to buy SpaceX stock An index fund doesn't pick stocks. It holds whatever its index holds, in the same proportions, and leaves the judgment calls to the rulebook. So when the Nasdaq-100 adds SpaceX, every fund tracking it has to buy the stock -- not because a manager decided it was a bargain, but because the index says so.
That forced buying is the whole story here. J.P. Morgan estimates it at about $4.3 billion, and much of it will likely happen after the close on July 6 -- the day before the change takes effect. This means that a fund built to track an index can't wait for a better price.
What makes this unusual is the speed. SpaceX qualifies just 15 trading days after going public -- a fast-track entry under the Nasdaq-100's new rules, which allow certain IPOs to be added after 15 trading days without meeting the usual seasoning requirement. SpaceX would not have qualified under the old rules.
S&P Global, by contrast, has said it won't relax its own rules and will wait at least a year before weighing SpaceX for the S&P 500. And because this is a fast-track addition, no current member is being dropped to make space. The index will simply hold more than 100 names for a while.
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Your slice is smaller than it looks At a valuation of more than $2 trillion, SpaceX is one of the most valuable companies in the country, so you might expect it to enter the index as one of its largest members. It won't.
The Nasdaq-100 uses a modified weighting method that doesn't simply weight stocks based solely on market capitalization. The stock is estimated to enter the Nasdaq-100 Index at a weighting of less than 1%.
So what should a passive holder of any fund tracking the NASDAQ-100 expect? In the near term, a one-time bump in buying around July 6 and 7, and then a small position in SpaceX (indirectly, of course), whether you wanted it or not.
Personally, I wouldn't change a thing in my portfolio because of this. But it's worth knowing that your Nasdaq-100 fund will now hold a piece of a barely public, money-losing company at a wild valuation. This is just part of index investing.
Of course, just because SpaceX stock looks overvalued today doesn't mean it won't pan out to be a good investment over the long haul. But it also doesn't guarantee that it won't be a poor investment. One thing is certain, though: shares have traded extremely volatily since they went public. The stock has traded as high as $225.64 and as low as $147.11. Today, it's trading at $169.44. Investors should expect this volatility to continue. But since it will initially be weighted at less than 1% of the index, its impact on Nasdaq-100 tracking funds should be small.
The many opinions on Space Exploration Technologies (SPCX +4.15%) include this one: Rockets, artificial intelligence, internet access, and orbital data centers are an exciting combination! But that valuation? More than 100 times sales!
SpaceX is indeed expensive. The stock, as I write this on June 26, trades at roughly 103 times sales and 58 times book value. That means investors are paying about $103 for every $1 of annual revenue SpaceX generates, and about $58 for every $1 of net assets on the balance sheet. Those are extraordinarily rich multiples even for a company growing as quickly as SpaceX.
The stock isn't just expensive; it's priced like a new Rolls-Royce. And if the history of blockbuster IPOs like Meta Platforms (then Facebook) and Rivian tells us anything about the near-term future of SpaceX, it's that enormous expectations can deflate a highly anticipated stock just as quickly as they can inflate one.
I don't own shares of SpaceX, and I don't plan to buy any soon. That said, my risk tolerance isn't the same as others', and, with an open mind, I can envision a future in which SpaceX grows tenfold from today's seemingly outlandish valuation. Here's how.
Image source: Getty Images.
SpaceX is a 3-in-1 play on the future of humanity How could a $2 trillion company with a pricy valuation grow into a $20 trillion company that inspires less market volatility and more confidence?
Before I answer that, let me point out what makes SpaceX different than other growth stocks. I'm not talking about Elon Musk at the helm, or Martian colonization on the horizon. I'm referring to its three-in-one business: space, connectivity, and AI.
What's easy to miss is how different these businesses are, or rather how loosely connected they are. They operate under the same company strategy and brand, but they make money differently, address different audiences, and carry different margins. Indeed, each one could be treated as its own separate growth stock. In that sense, an investment in SpaceX is like getting three premium growth stocks in one.
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Which brings me here: The differences in these growth businesses is how SpaceX, as the conglomeration, can self-fund its trail-blazing research. Starlink -- providing internet via satellites -- for example, is highly profitable right now, bringing in about $4.4 billion in 2025, while xAI is deeply negative, with a loss of about $6.4 billion last year.
The three-part business structure can help SpaceX hedge its losses, but to reach a $20 trillion valuation, it really needs its AI segment to fire on all cylinders. SpaceX itself believes AI could unlock a $26.5 trillion market opportunity, which is probably exaggerated. But even realizing half of that opportunity would create massive upside for SpaceX stockholders.
Should you buy SpaceX today? If SpaceX's AI segment conquers this $26.5 trillion market and converts it into revenue, a tenfold gain in its stock is very likely. However, don't treat that as gospel. Even if AI proves to be as profitable as the most optimistic speculators surmise, a tenfold gain could take a decade or more to surface.
If you're patient enough, you might want to wait before opening a position. The stock has long-term potential to tenfold your net worth, but a more favorable buying window might be on the horizon.
Space Exploration Technologies (SPCX +4.15%), better known as SpaceX, has grand ambitions to eventually help mankind colonize Mars, and much of the attention surrounding the company is, understandably, focused on its rocket business.
But a growing part of SpaceX's opportunity lies in its neocloud business, through which it rents out capacity from its high-performance data centers. Here's what some investors may be missing about SpaceX's growing AI empire.
Image source: Getty Images.
SpaceX is an AI deal-making machine Recent research from Gartner estimates that by 2030, neocloud providers like SpaceX will hold 20% of the $267 billion AI cloud market. And the recent moves by SpaceX could help the company become a key player.
First, the company's $60 billion purchase of Cursor, an AI coding company, helped bolster SpaceX's Grok AI software and make its development capabilities more robust.
SpaceX has also inked a slew of new agreements with tech companies for AI compute power. One of the most recent was a $6.3 billion contract with Reflection AI, which will pay about $150 million per month for access to SpaceX's Colossus 2 data center. That deal is set to run through 2029 (though either party can cancel it with 90 days notice).
Even some of the largest cloud computing players are renting SpaceX's neocloud space. Alphabet's Google recently signed a multiyear deal to access 110,000 Nvidia GPUs from SpaceX's data centers. With Google rapidly expanding its Gemini AI, that will help give it the processing power it will need -- while bringing in an estimated $30 billion for SpaceX over the contract's term.
Last, but certainly not least, is SpaceX's blockbuster deal with Anthropic. The AI company is reportedly paying $15 billion annually over the next three years to rent the entire capacity of SpaceX's Colossus 1 data center.That will give Anthropic access to 220,000 Nvidia GPUs for AI computing while providing SpaceX with sizable and stable revenue.
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What all of this means for SpaceX and shareholders SpaceX is a bit of an odd company. Its long-term goals lay in the area of space exploration, yet it's building a large neocloud business too. Making things even more complicated is that most of its revenues today come from its satellite internet connectivity business, Starlink.
Still, its neocloud business is growing fast. With its recent deals added to the company's previously disclosed cloud sales, the segment already has an annual revenue run rate of around $26 billion.
If SpaceX can build more data center capacity and add customers of similar caliber to its current ones, its cloud business will become an even more important part of its future.
It's a promising endeavor for SpaceX, to be sure. Still, investors should know that buying this stock right now carries significant risks. The company is spending heavily -- capital expenditures were $20.7 billion last year -- and its shares are expensive. SpaceX stock trades at a trailing price-to-sales (P/S) ratio of 103, -- far above the tech sector's average P/S ratio of about 9.
While the company is trying to build out an AI empire right now, the hefty premium that investors would have to pay for its shares should give them pause.
John Conca talks about SpaceX (SPCX) and its role in the greater space economy. He says as big a name as SpaceX is, he believes the results will vary as volatility continues to grip the stock.
SpaceX is offering Memphis residents 50% off Starlink as its data centers expand in the region. Brandon Dill for The Washington Post via Getty Images SpaceX is offering Memphis-area residents a steep discount on Starlink internet as its AI ambitions continue to expand in the region.
Customers with eligible addresses in the Memphis area can sign up for Starlink at half the standard monthly price, and both new and existing subscribers won't have to pay upfront for hardware, xAI Memphis said on X.
The company linked the promotion to its growing AI infrastructure in the city, home to xAI's Colossus data center.
"The unique capabilities of the Colossus datacenters could not be accomplished without the partnership and support from the local Memphis community." SpaceX's vice president of Starlink engineering, Michael Nicolls, wrote on X on Tuesday.
"Happy to bring affordable and great @SpaceX @Starlink connectivity to our neighbors," Nicolls added.
Elon Musk also promoted the offer on X, posting simply that Starlink would be available at "half price" for residents in the Memphis region.
The promotion comes as xAI rapidly expands its presence in the area. Colossus, launched in 2024, has become one of the world's largest AI computing clusters, powering Grok training and supporting compute needs across Musk's companies. The campus has continued to grow, including an expansion into nearby Southaven, Mississippi.
Meanwhile, the facility has also drawn scrutiny from local residents and environmental advocates. Community groups, including Memphis Community Against Pollution, have criticized the project's energy use and emissions. Business Insider previously reported that the data center relies on enough methane gas generation to power roughly 280,000 homes, and that local organizations have launched efforts to monitor air pollution and urge elected officials to take action.
The Starlink offer automatically applies to eligible addresses, reducing the monthly subscription price by 50% while waiving hardware costs. SpaceX has not announced when the promotion will end and has not responded to a request for comment.
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Space Exploration Technologies' (SPCX +4.15%) initial public offering (IPO) has given investors access to a company that combines rocket launches, satellite broadband, mobile connectivity, and artificial intelligence (AI) infrastructure. However, although SpaceX has one of the strongest positions in the global space economy, it is still expected to burn cash for years.
Image source: Getty Images.
S&P Global Ratings, part of S&P Global, expects elevated capital spending to keep SpaceX's free cash flow negative through 2029, even after its blockbuster IPO. Hence, the company's growth story depends on when its other businesses become profitable.
SpaceX has plenty of growth drivers SpaceX's connectivity segment, which includes the Starlink business, generated $11.4 billion in revenue and $4.4 billion in operating income in fiscal 2025. SpaceX also had about 10.3 million Starlink subscribers across 164 markets, and a $27.6 billion backlog at the end of the first quarter of fiscal 2026 (ending March 31, 2026).
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Starlink is already a profitable satellite broadband business. The company claims that its rockets have carried more than 80% of the world's satellites and other cargo sent to orbit each year since 2023. SpaceX's Falcon rockets also have a mission success rate above 99%.
The next major catalyst is the Starship reusable rocket system. SpaceX expects its newer Starlink V3 satellites to carry far more internet capacity than current V2 satellites. A Falcon 9 launch can deploy about 2,600 gigabits per second of Starlink bandwidth, while a Starship launch could deploy about 61,000 gigabits per second. Hence, one Starship launch could add more than 20 times as much Starlink capacity, helping SpaceX expand the network faster and at lower cost.
SpaceX is also extending Starlink beyond home internet into satellite-to-phone service for ordinary smartphones. If adoption grows, this could add another robust revenue stream.
SpaceX also faces multiple challenges SpaceX's next growth phase is consuming huge amounts of capital. The company reported a net loss of $4.9 billion in fiscal 2025 and another $4.3 billion net loss in the first quarter of fiscal 2026. Starlink is also facing pricing pressure, with average revenue per user falling from $99 in 2023 to $66 in the first quarter of fiscal 2026.
SpaceX's AI segment generated $3.2 billion in revenue in fiscal 2025 , but it also posted a $6.4 billion operating loss. The company also invested capex of around $12.7 billion in fiscal 2025 and another $7.7 billion in the first quarter of fiscal 2026 in the AI business.
SpaceX had $29.1 billion of long-term debt at the end of the first quarter, including a $20 billion bridge loan. The company has launched a $25 billion bond sale, with proceeds expected to repay borrowings under that bridge loan and support general corporate purposes, including its capital-intensive AI expansion.
SpaceX has lost nearly $940 billion in market value from its early post-IPO peak near $225 (as of June 25, 2026), though it remained above its $135 IPO price. Despite the share price decline, the stock trades at nearly 76.5 times trailing-12-month sales. The premium valuation leaves little room for execution mistakes, especially when the company is still burning cash.
Hence, while SpaceX is not a weak company, investors should be aware that they are paying today for cash flows that may still be several years away.
Less than two weeks after its initial public offering (IPO), Space Exploration Technologies (SPCX +4.19%), or SpaceX, went back to the capital markets. This time through debt. On June 22, the company priced its inaugural bond offering of $25 billion -- the largest investment-grade bond sale of the year -- after reportedly receiving $90 billion in orders from institutional buyers. The demand was real. The implications are worth understanding.
What SpaceX actually did SpaceX raised $25 billion through five tranches of senior unsecured notes, with maturities ranging from 2031 to 2056 and interest rates spanning 5.35% to 6.65%, locking in decades of additional debt obligations.
The notes are unsecured obligations that rank equally with all other existing and future unsubordinated debt. Unsecured means bondholders have no specific claim on any SpaceX asset -- no rockets, no satellites, no Starlink infrastructure -- if the company faces financial stress. They stand in line with every other creditor.
The primary use of proceeds will be to repay the $20 billion bridge loan SpaceX took out in March when it absorbed xAI and X. The remainder will go to general corporate purposes, which means Starship development, Starlink expansion, and artificial intelligence (AI) infrastructure.
Image source: Getty Images.
Why the stock fell On June 22, the day SpaceX announced the bond sale, shares dropped 16.4%.
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CNBC the next day reported the $90 billion in demand. Two things explain that gap between bond demand and stock performance.
First, the bond market priced in risk that the equity market hadn't yet fully acknowledged. The 2036 tranche is priced 1.4 percentage points above U.S. Treasury yields -- roughly 0.4 percentage points wider than the average spread on comparably rated BBB debt. In plain terms, bond investors required a premium to own SpaceX debt over similarly rated companies. That premium is the market's way of saying the SpaceX story carries more execution risk than a typical investment-grade issuer.
Second, the bond sale confirmed something the IPO prospectus had disclosed, but the retail investor frenzy had glossed over: SpaceX needed the money. This company that just raised $86 billion in an IPO and then borrowed $25 billion more within two weeks carries $29 billion in long-term debt before it has built a single revenue-generating AI data center. CFRA analyst Keith Snyder put it directly in an interview with Yahoo! Finance: "They need to invest every dollar as efficiently as possible."
What this means for long-term investors The bond sale itself is not a red flag. It is standard capital structure management -- using long-dated, lower-cost debt to refinance a short-term bridge loan before it matures in September 2027. Companies like Amazon and Microsoft have used the same playbook to fund infrastructure at scale.
The question for SpaceX investors isn't whether the company is able to borrow -- $90 billion in bond orders confirmed it is. The question is whether the AI infrastructure it is building with that borrowed capital will generate the returns needed to justify a stock that, even after its recent sell-off, still trades at more than 100 times trailing revenue. Some analysts have a $250 price target on the stock that closed Monday at $164. Others have a $310 target. The range is wide, which reflects how genuinely uncertain this business model is at its current scale.
What the bond sale clarified for me is the version of SpaceX investors are buying: not a rocket company that became profitable and then expanded into AI, but an AI-infrastructure conglomerate that happens to own the most successful launch business ever built, carrying debt it will repay through 2056.
Here's my take: The debt load and execution uncertainty are real, and anyone treating SpaceX like a sure thing is ignoring what the bond market already priced in. But for investors with a long horizon, the sell-off toward IPO prices may be the entry point worth building a position around -- one layer at a time.
Space Exploration Technologies (SPCX +4.19%) isn't a cheap stock by any means. At over $2 trillion in market cap, it's among the most valuable companies in the world. But many people who buy the stock, which also goes by just SpaceX, buy it for its long-term goals and the opportunities in space and artificial intelligence.
SpaceX stock has a lot of promise and long-term potential. And as long as investors are optimistic about the company's growth and its path forward, it can continue rising higher, despite its valuation. That's why I don't think the biggest risk with owning the stock is necessarily its price, but the company falling short of expectations.
Image source: Getty Images.
Elon Musk has a concerning track record SpaceX CEO Elon Musk is no stranger to making bold and ambitious claims. The problem, however, is that they can be far too optimistic. Investors, meanwhile, may become frustrated with a stock, especially one that has as much hype as SpaceX. For the stock to keep rising and trade at a valuation higher than might be warranted by fundamentals, investors need to remain bullish on its growth story.
According to a recent analysis by The New York Times, of the 600-plus claims Musk has made over the past 15 years, he came through just 19% of the time, and on time. And in 35% of cases, he either didn't deliver or was late. Another one-third of claims were considered to be too vague, and it hasn't been clear if he met them, while 13% of claims are based on future dates and thus remain to-be-determined.
This can be particularly problematic when talking about grand visions such as going to Mars and putting data centers into space. They would be amazing goals to reach, but given how ambitious they are, it may not be surprising to see them drag out over a very long time frame.
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Investing based on a long-term vision is dangerous and risky All CEOs have visions for future growth, but few are going to be as bold as Musk's. And that's why many growth-oriented investors love to invest in Musk's companies, knowing that if he meets those sky-high expectations, the stocks could soar as well.
But the danger is that such grand visions as Musk's can prove too complicated, costly, and time-consuming to be realized. In the meantime, the underlying business may continue to incur heavy losses, leading to significant declines in share price.
The most successful investors in the world have focused not on optimistic growth targets and visions but on solid facts and figures. While betting on Musk may have worked out tremendously well for early Tesla investors, that doesn't mean that SpaceX stock will go on a similar trajectory.
SpaceX (NASDAQ:SPCX) is surging back again after a brief fall from its highs. SPCX stock is up by almost 11 days in the past five trading sessions and is likely set to continue moving higher in the coming days as the broader rally shows no sign of stopping.
In fact, many analysts (retail and the suits) are certain the stock is moving to $3 trillion or higher.
Fundamentally, you don’t want to take this deal. SpaceX is bleeding cash, is too big, and its AI division is behind all its competition… and so on. On the other hand, many believe the stock will retain its premium perpetually. Analysts have been bashing Tesla (NASDAQ:TSLA | TSLA Price Prediction) year after year, and it hasn’t made Tesla fans any less enthusiastic about TSLA stock. The same effect could drive SpaceX to $3 trillion. Let’s see what needs to take place in order for that to happen.
SpaceX is less and less space every day If SpaceX only contained Starlink plus the launch division, you’d be looking at a sub-trillion business. Starlink will face competitive pressure from Amazon (NASDAQ:AMZN) and AST SpaceMobile (NASDAQ:ASTS). It is only because of xAI’s inclusion that SpaceX is surging.
You should keep in mind that no matter how “bad” Grok or xAI looks on paper, it is still the closest generative AI pure-play the market has. Alphabet (NASDAQ:GOOG) is the second-closest pick, but most of that business is still boring software. On the other hand, SpaceX offers you an all-flashy business under one roof. The only non-flashy business is X/Twitter, which was absorbed alongside xAI.
xAI’s uselessness to the average user is useful for SpaceX The AI division inside SpaceX is far behind OpenAI, Anthropic, and Google. Several Chinese open-source models trounce Grok with a fraction of the cost. Thus, Grok is severely underutilized relative to its massive computing capacity. And I’d argue this is actually a good thing.
Instead of becoming a money pit, xAI became SpaceX’s largest money-maker right before the IPO.
xAI signed a 300 MW contract with Anthropic at $1.25 billion per month through May 2029, cancellable only with 90 days’ notice. Claude is so heavily used that I do not think Anthropic will cancel this anytime soon. xAI also signed an agreement with Google for $920 million per month from Oct 2026-Jun 2029. This is a shakier deal as Google falls behind on Gemini, but Google needs that compute if it ends up doubling down and spending more to catch up with Anthropic.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and SpaceX didn't make the cut. Grab the names FREE today.
Combined, you are looking at $26 billion a year in high-margin revenue per month.
SpaceX’s neocloud AI is special What’s special here is that most hyperscalers are struggling to build data centers, and it’s taking them years. On the other hand, Elon breezed through Colossus 1 and 2 within months through loopholes and bypassing industrial timelines.
The compute-rental income flows almost dollar-for-dollar to gross profit because the data centers were already built. In fact, SpaceX still has more spare capacity to sell. SpaceX’s filing says “we expect to enter additional similar services contracts” due to the excess capacity.
Will SpaceX get to $3 trillion? xAI won’t see $26 billion as profit, no matter how high the margin is on its own. It lost $6.4 billion last year, and it’s probable that you’re going to see similar or higher core operating losses this year. That leaves it some $20 billion (give or take) in profits. If you stack Starlink, launches, and everything else on top, you’re likely looking at $30 billion a year in profits for all of SpaceX, if we are to be liberal. Both Anthropic and Google contracts need to run as-is for at least a year.
That’s 100x forward earnings, which is very much achievable. Palantir (NASDAQ:PLTR) set the precedent that even 200x forward earnings is achievable if you can convince Wall Street you’re on the extreme cutting-edge.
Thus, I’d say $3 trillion is more likely than not if this rally continues through 2027. Moreover, if xAI can sell that excess capacity, even $4 trillion won’t be too far-flung, depending on how much compute they can sell.
That said, I do not think Wall Street will perpetually pay triple-digit forward earnings multiples. The rally will end someday, and SpaceX will likely settle at a reasonable low-to-mid double-digit premium in the 2030s. Perhaps even earlier, if the AI bubble bursts.
Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and SpaceX didn't make the cut. Grab the names FREE today.
A billion-dollar misunderstanding has left Korean investors empty-handed in the blockbuster SpaceX IPO. Bloomberg's Bailey Lipschultz joins Ed Ludlow on "Bloomberg Tech" with the details.
Space Exploration Technologies (SPCX +4.19%) had no shortage of buyers during its first days on the market. It surged from its first-day open of $150 on June 12 to over $225 on June 16. SpaceX's share price has fallen almost as quickly, back to $153 by the week ending June 26, but it's still one of the most popular stocks by trading volume.
Despite all the excitement, buying SpaceX stock right now is a risky move, and not just because of its staggering valuation.
Image source: Getty Images.
The macro environment is shaky The U.S. annual inflation rate rose to 4.2% in May, its highest level since April 2023. Two-thirds of consumers said they plan to cut back on spending because of rising prices, according to The Conference Board's Consumer Confidence Survey. In a separate University of Michigan survey, over half of consumers said high prices were weighing down their personal finances.
As a rocket company, SpaceX might not seem particularly vulnerable to a slowdown in consumer spending. But its only business segment that turns a profit, connectivity, is anchored by Starlink, a satellite internet service that sells to consumers and small businesses. Lower consumer spending could lead to slower subscriber growth and higher cancellations, hurting SpaceX's biggest source of revenue.
Sky-high spending Any dip in revenue would be a serious issue for SpaceX, as it carries significant debt and is spending heavily on Starship, satellite constellations, and artificial intelligence infrastructure. Capital expenditures in 2025 totaled $20.7 billion, of which $12.7 billion was allocated to its AI business. Capex in the first quarter of 2026 has already hit $10.1 billion.
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To SpaceX's credit, its revenue has grown significantly over the last three years, including by 33% to $18.7 billion in 2025. But its losses have also been growing, with the space company reporting a net loss of $4.9 billion in 2025 and $4.3 billion already in Q1 2026.
SpaceX flagged in its S-1 that it expects capex and operating expenses to increase in the future, and that failure to maintain or increase revenue could keep it from achieving profitability. This is already a company with a stretched valuation, given its $2 trillion market cap. It needs rapid growth to justify that, and any negative news could cause it to plummet.
Should you hold off on buying SpaceX? Between Starlink, the launch business, and AI, SpaceX has three businesses with growth potential. Potential doesn't pay the bills, though, and right now, this is an unprofitable, cash-hungry company recently trading at more than 100 times sales. Insiders also can't sell their shares yet, and the economy is looking fragile.
SpaceX is an interesting investment, but it's not one I'd make today. Instead, consider putting it on your watch list and reviewing the next couple of earnings reports to see how it does, rather than buying today while volatility is high.
SpaceX (SPCX +4.19%) has taken its investors on a wild ride since its June 12 IPO. It went public at $135 per share, opened at $150, and reached a record high of $225.64 on June 16. But as of this writing, SpaceX's stock trades at about $170. Let's see why it pulled back -- and how much upside it might have left after its recent decline.
Image source: Getty Images.
Why did SpaceX's stock stumble? SpaceX went public with a valuation of $1.77 trillion, making it the biggest IPO in history. But at its peak, its market cap hit $2.66 trillion, or 142 times its 2025 revenue of $18.7 billion. Even after its pullback, its market cap still hovers at $2.16 trillion, or 116 times its trailing revenue.
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That valuation might be justified if you believe Elon Musk's prediction that SpaceX could generate more than $1 trillion in revenue by 2030. But in reality, SpaceX's revenue only rose 33% in 2025, and it's unprofitable because the losses at its space and AI businesses are wiping out Starlink's profits. SpaceX will also likely rely heavily on debt offerings and dilutive acquisitions (like its recent all-stock takeover of the AI coding start-up Cursor) to expand.
For now, analysts expect SpaceX's revenue to surge 96% in 2026, 81% in 2027, and 47% to $97.5 billion in 2028. That growth could be driven by Starship, its largest rocket ever; the expansion of Starlink, which already serves over 10.3 million subscribers, and the evolution of xAI's fragmented business into a formidable AI infrastructure company.
But even if SpaceX hits those targets -- which would require hundreds of flawless launches, low interest rates, and a stable macro environment -- it already trades at 22 times its 2028 revenue.
On the bright side, SpaceX's upcoming inclusion in the Nasdaq-100 on July 7 could set a floor under its stock, since all funds passively tracking the index will need to purchase it. However, its upcoming lockup expirations -- which will start in late July or early August and ramp up through the end of the year -- could drive its stock lower as its early investors and insiders cash out. That selling could make SpaceX an attractive target for short sellers.
While SpaceX might still have significant long-term growth potential, I don't think it has much more upside for the rest of 2026. It still has a lot to prove over the next few quarters, and its high valuation and upcoming lockup expirations will likely limit its near-term gains.
Leo Sun 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.
Talk of a potential 40% market crash is popping up in financial headlines these days, and it has enough surface logic to be taken seriously.
Space Exploration Technologies Corp. (SPCX +4.07%), best known as SpaceX, just completed the largest initial public offering (IPO) in U.S. history, raising $75 billion at a $1.75 trillion valuation. Anthropic has confidentially filed for an IPO targeting $30 billion at a valuation of roughly $965 billion. OpenAI is expected to follow next year. As exciting as all these big-name IPOs might be, they could also trigger a big drawdown, according to financial commentator Mark Hulbert.
Hulbert's analysis draws on academic research by Harvard economist Xavier Gabaix and the University of Chicago's Ralph Koijen, who found that every dollar withdrawn from U.S. equities causes total market cap to shrink by $5. Applied to the roughly $200 billion these three IPOs are expected to raise, that multiplier implies a $1 trillion hit to market value -- and separate GMO research correlating IPO volume with forward returns puts the 12-month decline closer to 40%.
Most data makes a 40% crash scenario look unlikely -- while making a more targeted, painful correction in specific pockets of the market look very real.
Image source: Getty Images.
The real mechanism U.S. money market funds currently hold approximately $8 trillion in assets. Total U.S. equity market capitalization exceeds $50 trillion. The combined raise of all three IPOs represents roughly 0.4% of investable U.S. equity capital. Ed Yardeni, whose 50-year track record as a market strategist commands attention, ran that math explicitly in a client note and concluded that the effect on the overall pool of available investment capital is "manageable" -- in other words, the market is large enough to absorb these offerings without a systemic shock.
What the investment banks underwriting these IPOs (and collecting billions in fees to bring them to market) are correctly recognizing is that the capital is there. What they're understating: The question isn't whether the money exists. It's which money moves, and what it moves out of.
Fund managers getting allocations to new positions don't wire cash from savings; they sell existing positions. And they don't sell randomly. They sell what most closely resembles what they're buying. SpaceX, Anthropic, and OpenAI are AI and tech companies, so the capital funding their debuts is coming out of AI and tech portfolios.
You already saw it once this year, when the Nasdaq dropped 4.18% on June 5 -- its worst single day since April 2025 -- in the week before SpaceX priced its IPO. The jobs report got the headlines, but the real driver was hedge funds selling richly valued chip stocks and AI infrastructure companies to make room on their books for SpaceX.
If Anthropic and OpenAI follow within the next 12 months, the same mechanism will run again. Twice. Nvidia (NVDA +1.61%), AMD (AMD +7.28%), and the AI infrastructure businesses that absorbed the June correction, could face another round of selling. And that pricing pressure could fuel doubt in the markets about whether the likes of Alphabet (GOOG +1.08%) and Amazon (AMZN +0.46%) will continue to spend so aggressively on AI infrastructure -- which would justify even more selling.
The S&P 500 won't be adding SpaceX, Anthropic, or OpenAI for at least another year, despite reports that the benchmark index might relax its rules requiring 12 months of trading history as well as positive earnings. However, the Nasdaq did amend its rules in May, allowing megacap IPOs to enter the Nasdaq-100 -- and the Invesco QQQ Trust (QQQ +1.66%) ETF, which tracks it -- within 15 days of listing. SpaceX is projected to land somewhere in the 0.5% to 1% weight range almost immediately.
Passive managers tracking QQQ become forced buyers regardless of their view on the valuation. That's real demand, and it helps the IPO. But index additions displace existing constituents, and the displacement falls hardest on whatever's already overweighted. In QQQ, that's Nvidia, Microsoft (MSFT +1.07%), and Apple (META 0.79%).
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What a 40% scenario looks like Every S&P 500 decline of 40% or more on record -- 1929, 2000, 2008 -- involved leveraged investors being forced to sell assets to cover losses, which pushed prices lower and triggered more forced selling in a cascade. The sell-offs did not come from a crowded IPO calendar. The dot-com comparison is instructive precisely because it runs counter to the 40% crash thesis: Markets peaked before the IPO pipeline began to overflow, not because of it. The valuation problem came first; supply just accelerated a process already in motion.
That's a more specific and more actionable problem than a 40% headline. If you're overweight in Nvidia, AMD, or other AI infrastructure names, the question isn't whether to sell. It's whether your time horizon is long enough to absorb another round of mechanical selling unrelated to the underlying businesses. The rotation pressure is real, but I think it is temporary. The companies printing money on AI compute aren't going away. Know what you own, and decide in advance how much drawdown you can sit through, so you're not making that call in the middle of it.
Space Exploration Technologies (SPCX) has reportedly explored contributing company shares to the Trump administration's new children's savings initiative, known
SpaceX SPCX shares are pushing higher as investors aggressively position their portfolios ahead of the aerospace titan’s highly anticipated inclusion into the Nasdaq-100 index on Jul. 7.
The upcoming milestone is fueling intense market optimization, as institutional traders race to get ahead of massive index-fund buying.
SpaceX stock’s performance this morning reflects an encouraging rebound in what has been a high-stakes, volatile journey since its market debut earlier this month.
SPCX climbed to an all-time high of nearly $226 on Jun. 16, before experiencing significant profit-taking that dragged shares down to a low of about $147.
SPCX stock is extending gains on Tuesday primarily because of its fast-track entry into the Nasdaq- 100 index, scheduled for next Tuesday.
Because passive index-tracking funds and exchange-traded funds (ETFs), including Invesco QQQ Trust, which commands over $800 billion in global assets, are legally required to accurately mirror the benchmark index, they'll be forced to buy SpaceX worth billions of dollars in the weeks ahead.
Wall Street analysts estimate this mechanism will trigger a massive wave of mandatory buying.
Specifically, JPMorgan experts project the Nasdaq-100 inclusion alone will generate roughly $4.3 billion in structural passive inflows, which could drive SPCX much higher in the near-term.
Investors are loading up on SpaceX shares also because Elon Musk’s space infrastructure and AI giant is slated for near-term inclusion in FTSE Russell’s US and global benchmarks, including the Russell 1000 as well.
According to Bloomberg Intelligence, this secondary indexing event could unleash an “additional” wave of passive buying.
Because SpaceX’s publicly tradable free float remains relatively tight following its IPO, analysts believe this “multi-billion-dollar” wall of institutional money chasing a limited supply of available shares could create structural buying pressure.
This will likely corner short sellers and orchestrate a breakout in SPCX over the next few weeks.
Despite the post-IPO turbulence that often plagues massive market debuts, the long-term outlook for SPCX shares remains rather bright.
A strong combination of structural index-fund buying and revolutionary commercial expansion positions this aerospace giant for a bullish second half of 2026.
By anchoring its valuation in both physical space exploration and digital connectivity, SpaceX is successfully capturing the imagination of both retail and institutional investors.
The company’s strategic pivot toward consumer mobile telecom via its potential partnership with Charter Communications highlights a management team that refuses to rest on its laurels.
In short, as billions of dollars in passive capital prepare to flood into SPCX over the coming weeks, the stock is gaining a powerful institutional floor and may be warming up for significant further upside through year-end.
On Tuesday, June 23, its sixth full day of trading, the stock of Space Exploration Technologies Corp. (SPCX +1.36%), or SpaceX, briefly dipped to an all-time low of $147.55/share, below its debut price of $150/share. Since then, it hasn't closed above $157/share.
But is this price drop actually a buying opportunity in disguise? Here's what investors should know about SpaceX's prospects moving forward.
Image source: Getty Images.
Par for the course SpaceX's shares shot up to an intraday high of $176.52/share just after it began trading on Friday, June 12. Many observers thought that might be the high-water mark for the stock.
But SpaceX surprised everyone over the following two days as its stock price rocketed up to close at $211.39/share on Tuesday. This briefly put its market capitalization at $2.6 trillion, surpassing Amazon to become the fifth-largest company in the world. Analysts began to wonder if the classic trajectory of a hot IPO -- a brief Day 1 share price spike followed by a long, gradual decline -- didn't apply to SpaceX.
That dream was short-lived. The decline began the very next trading day, with shares eventually closing below $160/share on June 22, where they've mostly stayed since.
So, is now a good time to buy shares?
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SpaceX stock has a long road ahead of it There are two compelling reasons to stay away from SpaceX shares right now: dilution and lockup expiration.
Dilution comes from additional share issuances. SpaceX's recent agreement to acquire artificial intelligence developer Anysphere in a $60 billion all-stock deal already requires the issuance of about 400 million new shares. An additional preexisting deal for wireless spectrum will require the issuance of $11.1 billion in new shares in 2027. And various executive bonuses, stock options, settlements, and other awards totaling about $150 billion in new shares could be issued under certain conditions as well. These issuances will likely drive the share price lower.
Meanwhile, a healthy chunk of SpaceX's existing shares are currently on "lockup." Those shares will begin unlocking two trading days after SpaceX's Q2 earnings report, which is likely to occur in late July. Additional shares unlock throughout the year until the big 180-day lockup period expiration (for employees and most pre-IPO investors) on Dec. 8. Elon Musk's shares won't unlock until June 2027.
Image source: Getty Images.
Given widespread concerns about the company's sky-high valuation, there will be strong incentives for shareholders to sell their shares as soon as their lockups expire, which would put more near-term downward pressure on the stock.
In other words, if you want to buy and hold SpaceX shares for life, waiting at least until Dec. 9, after all those new shares have flooded the market, is likely to get you a better price than buying now. And waiting until 2027, when all shares are unlocked, and we'll have a year of quarterly numbers to help us evaluate the stock price, is probably an even smarter move.
Key Takeaways CHTR shares surged 9.4% after reports of talks with SpaceX about a potential mobile partnership.CHTR's Spectrum Mobile growth could gain from satellite-backed coverage in underserved areas.CHTR trades below industry valuation metrics with expected 18.8% earnings growth this year. While SpaceX (SPCX - Free Report) has been hogging the headlines in recent weeks, shares of Charter Communications, Inc. (CHTR - Free Report) soared 9.4% on June 29 after reports suggested the cable and broadband provider has held discussions with SPCX over a potential mobile partnership. The report fueled investor optimism that closer collaboration with SPCX's satellite capabilities could strengthen Charter's wireless ambitions and improve connectivity in underserved areas, complementing its existing broadband network.
Charter has been navigating a landscape where cord-cutting remains persistent as consumers increasingly favor streaming platforms over bundled pay-TV packages. At the same time, operators have relied more heavily on broadband and mobile offerings to offset declines in video subscribers. The industry has also been investing aggressively in network upgrades to defend market share against fiber expansion and fixed wireless access services.
Despite these headwinds, Charter has continued to position itself as more than a cable television provider. Its Spectrum Mobile business has delivered steady customer additions, highlighting growing demand for bundled broadband and wireless services. A partnership involving SpaceX could further enhance Charter's long-term strategy by expanding mobile coverage and potentially enabling satellite-backed connectivity in hard-to-reach locations. Such a move would also reflect the broader convergence of terrestrial broadband, wireless and satellite communications.
Comparison With PeersCHTR currently carries a Zacks Rank #3 (Hold). The rally marked a welcome change for Charter after a challenging month. While it has outperformed the broader Zacks Cable Television industry over the past month, it has risen a 2.5% against a 7.2% fall for the industry. The stock has faced pressure as investors remained cautious about slowing broadband subscriber growth, intense competition from fiber providers and the continued shift away from traditional cable television. CHTR has, however, outdone peers like Comcast Corporation (CMCSA - Free Report) and Naspers Limited (NPSNY - Free Report) , which have declined 3.3% and 1.4%, respectively, over the same period. CMCSA and NPSNY also carry a Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Resilience of CHTRCHTR appears attractively valued relative to its industry. Its forward P/E of 3.11, well below the industry's 5.80, suggests the stock trades at a significant discount. Its PEG ratio of 0.23 versus the industry's 0.57 indicates investors are paying less for each unit of expected earnings growth. Backed by an expected 18.8% earnings growth this year, the valuation implies the market may be underpricing CHTR's growth prospects, provided it delivers on earnings expectations. The company is expected to report its second-quarter 2026 earnings on July 24, before the market opens.
Bottom LineLooking ahead, investors will likely focus on CHTR's ability to sustain broadband growth, expand its mobile subscriber base and improve profitability while managing competitive pressures. Any formal agreement with SpaceX could create new opportunities to differentiate its service offerings and accelerate innovation. Although challenges from cord-cutting and fierce broadband competition are unlikely to disappear, Charter's evolving business model suggests it is increasingly focused on becoming a diversified connectivity provider rather than relying on the shrinking traditional cable TV business. If execution remains strong, the company could be better positioned to capitalize on the next phase of the communications industry's evolution.
Space Exploration Technologies (SPCX +1.09%) had a very successful initial public offering (IPO), with the rocket company raising close to $86 billion earlier this month. It was a record figure, highlighting just how much appetite there is for Elon Musk's company, commonly referred to as just SpaceX.
What may be eyebrow-raising is that despite the recent IPO, the company was once again raising cash through a $25 billion debt sale. Within just two weeks, SpaceX has been raising even more money. But why?
Image source: Getty Images.
SpaceX is using the money to pay off its bridge loan for xAI SpaceX acquired xAI earlier this year, and it took out a $20 billion bridge loan to do so. According to reports, the company initially planned to raise $20 billion in this recent debt sale. However, with strong interest and demand, the figure climbed to $25 billion.
Tech companies have been increasingly turning to bonds this year to raise cash for expansion, particularly to make heavy investments in artificial intelligence (AI). Simply offering stock all the time can be less than ideal, as it dilutes the stock and weighs down the price, which is bad news for investors. Debt, however, comes with interest expense.
Companies often use a mix of both to try to manage their cash flow needs, and with SpaceX's recently issued notes being due between 2031 and 2056, it gives the company some important financial flexibility.
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Why SpaceX's cash flow needs could intensify SpaceX has bold plans to put data centers into space and land rockets on Mars. And not only are they ambitious plans, but they're also going to be incredibly costly endeavors to undertake. That means the company's need for cash is likely to balloon significantly. It already has.
During the first three months of the year, the company's capital expenditures totaled $10.1 billion, which was more than double what they were a year ago ($4.1 billion). The bulk of that increase came from its AI segment, which may not slow down anytime soon. Meanwhile, with the company's operations being unprofitable, SpaceX isn't in a terribly strong financial position today.
For investors, this means that there could be frequent stock offerings and more debt issued in the future. As rosy as the growth expectations may be with SpaceX, there are also plenty of reasons to be concerned; optimism alone may not be enough to keep the stock from falling. Already trading at a high valuation and with a market cap of $2 trillion, SpaceX stock is incredibly expensive and comes with significant risk; it's a stock I'd stay far away from.
The post-IPO boom phase for those red-hot shares of Space Exploration Technologies (NASDAQ:SPCX) didn’t seem to last very long, peaking at just north of $200 per share before plunging as low as the low-$150 levels, well below the day-one opening close. Indeed, if you didn’t buy on the first day of trading, patience was rewarded quite quickly. With shares a few dollars above where they were on day one, though, the big question is whether it still makes sense to buy before the stock is added to the Nasdaq 100.
Indeed, that S-1 prospectus was packed with profound innovations, some of which, at least in my humble opinion, are quite ambitious and could take many years longer than excited investors expect. Indeed, orbital data centers aren’t going to happen overnight. And questions linger as to whether the model is practical enough to evolve into a profitable business anytime soon.
SpaceX is full of promise, but the premium bakes in a lot As for asteroid mining, who knows when that will be a thing? In many ways, a big bet on SpaceX shares requires a big leap of faith and utmost confidence in Elon Musk. There’s no shortage of people who’ve been more than willing to pay up in the first week of trading.
As the Nasdaq 100 starts buying while insiders get ready to offload their positions in a few months, investors had better be prepared for extreme levels of volatility in both directions. At this juncture, it’s not hard to imagine that many investors have already piled into the stock with the expectation that the Nasdaq 100 will need to start loading up at market prices.
Add the limited float that’s trading around, and I do think that patience is the best move when it comes to SpaceX. In due time, more shares will be made available, and my guess is that the initial glimmer from that packed S-1 prospectus will begin to fade, as focus shifts from what’s possible to the challenges facing the firm in the present moment.
Will AI CapEx jitters weigh down SpaceX shares? Indeed, AI-related CapEx has not been taken well by the market of late. And as we gain more clarity into the trajectory of the financial situation, I do think that there’s more than enough fuel for a correction to IPO prices of $135 per share. Who knows? Maybe a Fed rate hike or two could be enough for investors to fall out of love with some of the market’s most expensive, growthy tech stocks, including the likes of SpaceX.
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For long-term thinkers who just have to have a piece of SpaceX in year one, I do think that the moment to pounce has a pretty high chance of arising at some point in the second half. Any way you look at it, 104.0 times price-to-sales (P/S) is a ridiculously high price to pay for any stock, including one with unbounded ambitions. My worry is that the market might start souring on SpaceX shares once we learn more about how much CapEx will be in the cards in the years to come.
Indeed, SpaceX is serious about being a combatant in the AI wars. And the price to play is, indeed, steep. AI data centers do not come cheap, and SpaceX is the only firm that’s building on the ground and up in the sky, where the costs could be astronomical (no pun intended).
The bottom line While I do find SpaceX to be a profoundly ambitious company with invaluable, unique assets and a wide moat, I just can’t justify the valuation. Once more shares trade hands and the price of admission cools off a bit, I might give the name a second look. But, for now, I’m in no rush to buy at over $160 per share.
Though I do understand why some would want to initiate a starter position right here, given the FOMO (fear of missing out) and the potential for the firm to enter some sort of growth inflection point if Elon Musk’s ambitious projections do prove realistic.
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