One week investors are sweating over a potential stock market crash, the next they’re aiming for the stars. Following the blockbuster SpaceX (LSE: SPCX) flotation on Friday (12 June), today it’s very much the latter. Are markets in danger of getting carried away?
This time last week, investors were fretting over a US tech sell-off, but Elon Musk has changed the narrative and not for the first time. I guess you have that kind of power, when you’re the world’s first trillionaire.
The SpaceX IPO smashed expectations. Originally priced at $135, the shares closed almost 20% higher at around $160, giving the company a market cap of $2.1trn.
Can Elon Musk keep this going?
That first-day pop didn’t really surprise me, given all the hype, but I thought the mood might calm this week. Yet on Monday, the share price climbed another 16.6% to $192. The US market hasn’t opened yet as I write today (16 June) but SpaceX futures suggest the stock is heading higher still. It’s market cap could hit $3trn, making it bigger than both Amazon and Microsoft.
This triggered a debate among writers on The Twelfth Magpie. We’re excited, but wary. As one colleague put it: “If this isn’t close to a market top, then I don’t know what is.”
Lest we forget, SpaceX made a loss of nearly $5bn last year, and $4bn in the first quarter of 2026. Its xAI division is burning through capital, and the group’s ultimate aim of putting humans on Mars is somewhat towards the higher end of the risk scale, to say the least.
The opportunity is hard to judge on conventional metrics, such as the price-to-earnings ratio. Where SpaceX goes next depends on future growth rather than trailing earnings. And I’m not sure it would help anyway. The sheer presence of Musk, who is backed by a global army of investors, can drive P/Es to the limits of reason and beyond.
Would I buy this Nasdaq stock today?
His electric car vehicle Tesla still has a P/E of 375, which I don’t think reflects the scale of the challenges it faces as other manufacturers play catch-up, notably in China. I also feel Musk has taken his eye off the road as he arguably did with Twitter, or rather X.
I have exposure to SpaceX through my holding in Scottish Mortgage Investment Trust. I wouldn’t buy more today. Yet I am still buying shares, including US tech.
I suspect this mad market could go higher still, especially as hype builds towards the next two big IPOs – AI-focused Anthropic and ChatGPT owner OpenAI. AI hyperscalers are pouring hundreds of billions into AI infrastructure, in the hope that if they build it, the profits will come. A backlash is inevitable at some point, followed by a market crash. But this is also a thrilling time to be an investor, given the potentially historic growth opportunity. I will be pursuing it, although not by investing in SpaceX at today’s price.
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Harvey Jones owns shares in Scottish Mortgage.
