The wait is over.
Space Exploration Technologies (SpaceX) SPCX +0.00% stock finally made its public debut in the largest IPO in history. Right off the bat, the space and AI conglomerate is one of the 10 largest companies on Earth and bigger than Elon Musk’s other mega-cap, Tesla.
With all the hoopla, you’re probably asking yourself: Should I buy in? Let’s take a look.
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What SpaceX actually does (and what makes money)
The best part of SpaceX is Starlink, the space-based internet provider. The business made nearly $12 billion of SpaceX’s total $18.7 billion in revenue last year. It’s a cash machine at this point, with nearly 40% operating margins.
Then you have what you think of when you think of SpaceX: rockets. Despite the visibility of the space launch business, the segment made up just about 13% of total revenue, and at present, it’s fighting to break even.
Finally, there’s the AI segment, responsible for the remaining 17.5% of total sales — $3.2 billion. Financially speaking, the AI arm is sort of Starlink’s foil, burning through the cash the satellite business produces and then some.
SpaceX lost just shy of $5 billion on the $18.7 billion in total sales.
SpaceX stock is priced for perfection
Those are the basics of the business, but what about price?
At $1.77 trillion, SpaceX is valued at roughly 94 times its 2025 revenue of $18.7 billion. Compare that to Nvidia — no one’s idea of a cheap stock, and a company raking in cash — which goes for about 31 times sales.
Image source: Getty Images.
SpaceX stock is priced with an extremely rosy view of the future, and, in my humble opinion, it’s driven by hype — and hype fades. I wouldn’t buy the stock unless the valuation comes back to earth.
Why you should wait even if you’re bullish
Even if you’re sold on the company long term and its rich valuation doesn’t faze you, there’s still plenty of reason to wait. IPOs, especially mega IPOs like this, are highly volatile, and first-day investors often get hit. Meta Platforms, for instance, dropped more than 30% in year one.
Of course, you can expect some pretty serious insider selling in the coming months. There are tons of early investors and company employees itching for a payday.
Regardless of your view on the business, at least wait for the IPO dust to settle before considering jumping in.
