Because it sailed on Friday, June 12, Space Exploration Technologies Company (NASDAQ: SPCX) have become one of the hottest stocks on the market. At an IPO (initial public offering) price of $135, the stock skyrocketed, reaching a high of $225.64 on June 16. They have since fallen back to Earth. Still, up-to-date price forecasts go to the moon.

Musk’s latest memes

On Wednesday, July 8, shares of Elon Musk’s last publicly traded company fell to $145.20. Anyone who was fooled by the record prices would have lost 35.6% of their investment in about three weeks. This shows how volatile this stock can be – and I expect this volatility to continue.

As I write this, SpaceX shares are trading at $150 and the technology business is worth $2 trillion. In other words, this one company is worth about half the total valuation of the UK stock market (about $4 trillion; £3.1 trillion). This seems incredible to me considering SpaceX is loss-making and has little revenue.

In the last fiscal year, Elon Musk’s rocket and artificial intelligence division reported $18.7 billion in revenue and a loss of $4.9 billion. Therefore, because basic investing principles do not apply, this is a business that resembles tomorrow’s space jam.

Brokers are going crazy

After SpaceX went public, brokers linked to the IPO were able to publish analyst reports on the stock until this week. Here’s a list of price targets for Wall Street’s biggest firms (from high to low):

Price forecasts for the next 12 months range from $200 (+33.3%) to $300 (+100%) from the current level of $150. In my opinion, the top targets look very suspicious – perhaps based on numbers gathered from the air to please the leader of “Technoking” SpaceX and Tesla.

Unbelievable, a wealth manager from Florida Financial Raymond James set a “base case” SpaceX price target of $800 (+433.3%) and a “bull case” price target of $1,000 (+566.7%). This group believes that SpaceX’s annual revenue will explode to $837 billion by 2031 and that EBITDA (earnings before interest, taxes, depreciation and amortization) will escalate to $696 billion.

Seriously, where do they find these bullish analysts? I can think of one straightforward anagram of the word “BULLISH” and the letter T that accurately describes Raymond James Financial’s predictions!

In response to the cynics to the perfect Financial Times. The Alphaville column set a price target for SpaceX of ∞ – that’s right, infinity. British sarcasm at its best.

Abstract

Of course, I could be wrong and Elon Musk could take SpaceX to the Moon, Mars and “infinity and beyond.” SpaceX does have market-leading rocket launch technology, and its Starlink satellite business is gaining profitability. However, xAI’s artificial intelligence agent, Grok, has faced widespread criticism.

With U.S. stock prices now higher than they were before the great Wall Street crash of 1929, I suspect a stock market crash is coming to bring back sanity (like 2000/03 or 2007/09). After this downturn, I would prefer to keep the dividend intact FTSE100 than SpaceX stock when the dust finally settles. For seasoned investors like me, SpaceX’s valuation is another Musk bubble waiting to burst!

Here’s one UK stock investors are excited about…

What income stocks do we like better right now than Space Exploration Technologies Corp.? – class A?

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Cliff D’Arcy has no position in any of the stocks mentioned.