SpaceX (NASDAQ:SPCX) stock can mean different things to different people. Some see the rocket pioneer as the world’s largest company in the making, with stellar competitive advantages, while others dismiss it as an overhyped meme stock.
Whatever your take, it can’t be denied that Elon Musk’s company is already making waves. Exchange operator and index provider Nasdaq has even relaxed its entry requirements, allowing loss-making SpaceX to join the Nasdaq-100 index on 7 July.
As a result, SpaceX could get an index fund-buying boost as passive ETFs aiming to replicate the Nasdaq-100’s performance are obliged to buy shares. This may act as a fresh catalyst for the stock, which is down 22% from recent highs.
Should I nip in and invest before 7 July?
Nothing’s guaranteed
The company will initially enter the index with a weighting of less than 1%, but there’s quite a low float of publicly tradeable shares relative to SpaceX’s massive $2.06trn market cap. In theory then, this forced fund buying could well boost the stock.
In practice though, speculative capital will probably flow in beforehand. And artificial demand from index funds is a one-time event, meaning the stock could see a pullback once the inclusion is over.
Either way, there will likely be increased volatility.
As a long-term investor, none of this matters to me. All I care about is the underlying business, its growth prospects, and the valuation.
What do I think about these?
40-storey stock
The first two boxes are already ticked for me. SpaceX is the world’s dominant and most innovative rocket launcher. In 2025, it did 165 Falcon 9 missions, far outstripping any other company or organisation, and five suborbital Starship test flights.
Starship is the 40‑storey rocket that SpaceX plans to use to deploy orbital AI data centre satellites and, one day, cargo to the Moon and Mars. It would also turbocharge deployment of satellites for the Starlink internet-from-space service.
Growth is strong, with revenue surging 33% to $18.7bn last year. And despite it being early days, Starlink’s profitability is already impressive, with the division achieving an operating margin of approximately 39% last year.
On top of this, we have very strong management. Elon Musk provides the urgency and celestial vision (making life multi-planetary), while president and COO Gwynne Shotwell runs the day-to-day operations on the ground.
My problem
Turning to valuation though, this is where things break down for me. You see, the stock resembles the 40-storey Starship in terms of loftiness — at 104 times sales!
But SpaceX is a $2trn company, not a start-up anymore. So I don’t want just growing sales. I want to value the company’s earnings, but I can’t due to the AI-related losses that are expected to last until at least 2028.
To my mind, this makes the stock extremely speculative. The valuation is essentially predicated on the firm getting Starship working reliably in the next few years.
In this sense, it’s a bit like Tesla with the self-driving taxis and humanoid robots. Musk has been promising these for years, and Tesla’s current valuation assumes they’ll be a slam-dunk success.
That said, SpaceX is a fascinating company and I might consider investing at a lower price. But that’s not today’s $156, and it won’t be before 7 July.
Should you invest £5,000 in Space Exploration Technologies Corp. - Class A right now?
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Ben McPoland has no position in any of the companies mentioned.
