Space Exploration Technologies Corp., commonly known as SpaceX, made headlines recently with its record-setting initial public offering (IPO), raising approximately $85 billion at a staggering valuation of nearly $1.8 trillion. This event has placed SpaceX at the forefront of anticipated IPOs in history, significantly surpassing any previous IPOs by a U.S.-based company.
As the stock price has surged since going public, many investors are left wondering if it’s still a wise investment opportunity. The stock opened trading at about $150 on IPO day, closing at $161 for a 19% gain, and has seen peaks at $229.40, briefly outpacing Microsoft’s market capitalization. Despite some retreat, the stock remains significantly above its IPO price, trading at $185 and giving the company a $2.43 trillion market cap.
The bullish case for investing in SpaceX includes several compelling arguments. Firstly, the company’s growth trajectory appears robust, enhanced by new compute deals with both Anthropic and Alphabet that may double SpaceX’s revenue run rate. Additionally, its Starlink project reported a 50% year-over-year revenue increase in 2025, boasting a high adjusted EBITDA margin of 63%, suggesting a solid business model with considerable room for expansion.
Furthermore, innovations such as the Starship present potential game-changers for the space economy and the company’s revenue streams through commercial payload deliveries set to begin in the latter half of the year. Additional passive ETF investments, especially from those tracking the Nasdaq-100, are expected to drive up stock demand. There’s also optimism surrounding SpaceX’s xAI initiative, which could offer significant growth opportunities if developments progress positively.
On the other hand, skeptics argue that SpaceX’s current valuation may be inflated. The company trades at more than 100 times its trailing revenue, and conventional valuation methods suggest a fair value far below its current market cap—Morningstar estimates it at roughly $780 billion. The impending expiration of a lockup period for insiders could pressure the stock, especially if subsequent earnings reports fall short of expectations.
Moreover, while projections for xAI are ambitious, there have been signs of challenges. Reports indicate that prior to the deals with Anthropic and Google, GPU utilization at SpaceX’s facilities was only 11%, and the Grok AI platform has struggled to achieve widespread commercial traction.
Looking ahead, predictions for SpaceX’s stock price remain highly uncertain. Proponents suggest that the company could grow to a $4 trillion valuation within a year if conditions remain favorable, while pessimistic scenarios could see the stock drop by 50% under adverse conditions.
Investors weighing their options may want to consider that some investment analysts currently advise other stocks over SpaceX. Firms like The Motley Fool have highlighted a list of ten stocks they consider optimal for long-term investment, emphasizing their proven track record of substantial returns.
As the future unfolds, potential investors in SpaceX are advised to proceed with caution, thoroughly assessing the dynamic factors at play in this groundbreaking company’s journey.
