Key Points
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With potentially more than $100 billion in orders, retail investors flocked to the SpaceX IPO.
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There’s a lot of opportunity with SpaceX, but there is also significant risk.
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For those considering moving from the sidelines and buying the shares, there are three questions worth answering before buying SpaceX stock.
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When Space Exploration Technologies (NASDAQ: SPCX), or SpaceX, went public on June 12, retail investors reportedly placed more than $100 billion in orders. That means on the first day of trading, many people who wanted to own SpaceX now have the stock in their portfolios.
There are still people who sat out the SpaceX initial public offering (IPO), waiting to see how things shake out. Now that it’s officially trading, for anyone still considering buying the shares, there are three questions to ask that can help you decide.
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1. Do you invest in this type of company?
Before its S-1 filing, most people viewed SpaceX as a space company. But when the S-1 filing for its IPO came out, the total addressable market (TAM) the company was targeting made it clear that SpaceX viewed itself as an artificial intelligence (AI) company with space operations.
SpaceX believes its TAM is $28.5 trillion, but $26.5 trillion of that comes from AI. The company said in its filing:
With the potential to improve both space exploration and life on Earth, AI accelerates SpaceX’s mission to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars. xAI, which was founded in 2023 and acquired by SpaceX in early 2026, is now an integral pillar of our vertically integrated company.
For investors who invest in AI companies and believe SpaceX can capture a significant portion of the TAM it shares, this stock may be a portfolio fit. For those who shy away from AI companies, already believe their portfolio has enough AI picks, or are skeptical of that $26.5 trillion figure, they may want to keep staying on the sidelines.
2. Are you comfortable with the risk?
All the promise SpaceX offers needs to be paired with the significant risk the investment presents. For considering the big picture, research from The Motley Fool sums it up nicely:
Ultimately, the prospectus frames SpaceX as a high-stakes combination of an unparalleled aerospace growth story and an early-stage, capital-intensive AI titan. The opportunity lies in the company successfully replicating its space profitability model across an AI infrastructure segment built on a capital base roughly 10 times larger. The challenge, like the challenge of reusable rockets and moon colonies, is formidable. But the opportunity is massive if SpaceX can execute from here.
Success for SpaceX won’t come in a straight line, and there will be setbacks and the company will stumble. As a perfect example, just look at Elon Musk’s other company, Tesla. While Tesla has rewarded long-term investors with huge gains, those same shareholders also had to hold on during periods of great volatility to earn those rewards.
3. Do you have to sell an existing position to pay for SpaceX?
Some investors may have to sell another stock to buy SpaceX. There’s nothing wrong with that, but it’s important to step back and analyze the situation critically, as acting rashly can lead to an investing mistake.
If you feel, in the long run, that SpaceX presents a better opportunity than the position you’re considering selling, that’s one thing. But if you catch yourself wanting to sell mostly out of the fear of missing out, that’s a warning sign not to act immediately.
The same rush of excitement that led to buying shares of the company can quickly turn to a feeling of dread if prices start to drop, making investors feel like they made a mistake and need to sell. In addition, there are also tax considerations from selling a position to buy SpaceX stock.
Again, there’s nothing wrong with selling one stock to buy another, in and of itself, but it does require careful consideration.
Should you buy stock in Space Exploration Technologies right now?
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Jack Delaney has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
