SpaceX (NASDAQ:SPCX) stock can mean different things to different people. Some see the rocket pioneer as the world’s largest emerging company with a huge competitive advantage, while others dismiss it as an overrated set of memes.
Regardless of what you think, there’s no denying that Elon Musk’s company is already making a splash. Stock exchange operator and index provider Nasdaq it even relaxed its entry requirements, allowing loss-making SpaceX to join Nasdaq-100 index on July 7.
As a result, SpaceX may get a boost in index fund purchases as passive ETFs that aim to replicate the performance of the Nasdaq-100 index are committed to purchasing shares. This could act as a modern catalyst for the stock, which is down 22% from recent highs.
Should I step in and invest before July 7?
Nothing is guaranteed
The company will initially enter the index with a weighting of less than 1%, but the number of publicly traded shares is quite low compared to SpaceX’s massive market capitalization of $2.06 trillion. Theoretically, therefore, forced fund buying could significantly strengthen the stock.
In practice, however, speculative capital will probably flow earlier. Artificial demand from index funds is a one-time event, which means the stock may experience a pullback once the inclusion ends.
Either way, there will likely be increased volatility.
As a long-term investor, it doesn’t matter to me. I am only interested in the core business, its development prospects and valuation.
What do I think about them?
40-story warehouse
The first two boxes are already ticked for me. SpaceX is the dominant and most pioneering rocket launcher in the world. In 2025, it flew 165 Falcon 9 missions, far exceeding any other company or organization, and five Starship suborbital test flights.
Starship is a 40-story rocket that SpaceX plans to exploit to deploy orbital AI data center satellites and one day transport cargo to the Moon and Mars. It would also augment the deployment of satellites for the Starlink space-based internet service.
Growth is robust, with revenue up 33% last year to $18.7 billion. And despite it being early days, Starlink’s profitability is already impressive, with the division achieving an operating margin of around 39% last year.
In addition, we have very robust leadership. Elon Musk provides the urgent and celestial vision (making life multi-planetary), while president and COO Gwynne Shotwell leads day-to-day operations on the ground.
My problem
But back to valuation, this is where it all breaks down for me. You see, the cob is like a 40-story Starship in terms of loftiness – at 104 times sales!
But SpaceX is a $2 trillion company, not a startup. So I don’t want to just augment sales. I want to value the company’s profits, but I can’t due to AI-related losses, which are expected to last at least until 2028.
In my opinion, this makes the company’s shares highly speculative. The valuation is essentially based on whether the company can keep Starship operating reliably over the next few years.
In that sense, it’s a bit like that Tesla with autonomous taxis and humanoid robots. Musk has been promising this for years, and Tesla’s current valuation assumes they will be successful.
That said, SpaceX is a fascinating company and I might consider investing at a lower price. However, this is not today’s amount of $156 and it will happen no earlier than July 7.
Is it worth investing £5,000 in Space Exploration Technologies Corp. now? – class A?
If investing expert Mark Rogers and his team have stock advice, it can pay to listen. After all, Twelfth Magpie’s flagship Share Advisor newsletter, which it has run for almost a decade, provides thousands of paying members with the best share recommendations from across the UK and US markets.
Mark believes there are 6 standout stocks that investors should consider buying right now. You want to check if Space Exploration Technologies Corp. – class A was on the list?
Ben McPoland has no position in any of the companies mentioned.
