Finally, we have lift-off for SpaceX (NASDAQ: SPCX) stock. Yesterday’s (12 June) blockbuster IPO, the biggest in history, turned Elon Musk into the world’s first ever trillionaire. The shares were priced at $135, opened at $150 and closed at $160.95. That’s a rise of 19.22% on the original price.
Anybody who bought the stock at its intra-day peak of $176.52 might be feeling a little jaded. But that’s okay, because the shares can only climb higher from here. Can’t they?
I’m joking of course. Just like any stock, the SpaceX share price could go absolutely anywhere.
Have I missed my chance?
There are lots of reasons to be excited by SpaceX, and not just for investors who directly bought the stock yesterday. Several investment funds got in some years ago, notably FTSE 100 investment trust Scottish Mortgage, which privately bought SpaceX back in 2018. Today it’s stake must be worth more than $4bn.
I can see three reasons why SpaceX could press on from here:
- The group has a massive first mover advantage in reusable rockets, leaving rivals like Blue Origin and Rocket Lab to play catch-up. Starlink generated revenues of $11.2bn in 2025, around 60% of the SpaceX total. Most of this will be recurring.
- Frankly, it’s the most thrilling stock on the market today. We’re talking about space exploration. The final frontier. Intra-planetary life on Mars. Ambition simply doesn’t get bigger than that.
- Musk wants private investors on board. Most IPOs only give us a chance to buy 5% or 10% of the shares. SpaceX lifted that to 30%. Musk was rewarded with a massive first day ‘pop’. It’s fulfilled the hype.
I can also see three reasons to be scared stiff:
- Buying SpaceX just got even riskier. The valuation was set at $1.8bn. Today, it’s worth $2.1bn. There’s a lot of one-day hype in that price.
- It’s exposed to a potential artificial intelligence bubble. SpaceX made a near-$5bn loss last year. Most of that was down to xAI, which made a net loss of $6.36bn, as it pours money into AI infrastructure. There will be big winners and big losers in the AI race, and we don’t know which xA1 will be.
- Musk has retained 82% of SpaceX shares and public shareholders have very little say in how the company is run. It’s still his baby.
What should we do on Monday?
I’m glad the launch went well. But the air is getting thin up here, and I think investors should be wary of chasing the price higher. After a big day like this, things will calm down. Profit-takers could emerge, although there are restrictions designed to stop investors ‘flipping’ the stock for a quick profit.
SpaceX may be aiming for the stars but investors need to think hard about keeping their feet on the ground. The price to-sales (P/S) ratio is now well over 100. Anything above 10 is seen as risky. Nvidia is only at 20. SpaceX is definitely one to watch, but investors would have to be brave to buy it next week.
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Harvey Jones owns shares in Scottish Mortgage and Nvidia.
