Key Points
-
Elon Musk’s SpaceX entered the record books on June 12, having raised $85.7 billion from its initial public offering (IPO), including the underwriters’ overallotment.
-
SpaceX’s intangibles are its biggest catalysts and question marks.
-
History strongly suggests SpaceX stock will head substantially lower.
- 10 stocks we like better than Space Exploration Technologies ›
Two weeks ago, Elon Musk’s Space Exploration Technologies (SpaceX)(NASDAQ: SPCX) cemented its name in the record books. Including the overallotment option exercised by underwriters, SpaceX raised $85.7 billion from its initial public offering (IPO), nearly tripling the $29.4 billion raised by overseas oil titan Saudi Aramco in December 2019.
But investing on Wall Street isn’t about where a stock has been — it’s about where it’ll head next. Although historical precedent can’t guarantee what’s to come, history does tend to rhyme. Using history as a guide, here’s my prediction for SpaceX’s share price by the end of 2027.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: Getty Images.
SpaceX’s intangibles are its biggest catalysts and question marks
Arguably, the leading catalyst for SpaceX is retail investor euphoria, which is incredibly difficult to quantify. Retail investors have flocked to this record-breaking IPO for a variety of reasons:
- SpaceX is at the forefront of two of the largest addressable opportunities, artificial intelligence (AI) and the space economy.
- CEO Elon Musk has a track record for generating outsize investment returns at Tesla.
- SpaceX’s sales growth should be parabolic over the next few years.
To be clear, this means only the S&P 500 will exclude SpaceX shortly after its IPO.
FTSE Russell adds eligible megacap IPOs after the close of the 5th trading day.
Nasdaq adds them about 15 trading days after listing.
The S&P 500 kept its rules, so SpaceX waits the full…
— Hedgeye (@Hedgeye) June 4, 2026
Additionally, the company should receive an early boost from recently amended index inclusion rules. Prior to SpaceX’s debut, Nasdaq Global Indexes reshaped the criteria for Nasdaq-100 inclusion. The low float requirement was shelved, and the time to inclusion for megacap companies was slashed from around three months to just 15 trading sessions.
The U.S. Russell Equity Indexes followed suit with amended fast-track inclusion criteria, as well.
Fast entry into the Nasdaq-100, Russell 1000, and Russell 3000 can provide tens of billions of dollars in buying demand from index funds.
Image source: Getty Images.
Caveat emptor, retail investors
While SpaceX isn’t without catalysts, history strongly suggests shares will head substantially lower.
To begin with, large-scale IPOs tend to struggle mightily in their first year as public companies. According to research published by Truist Financial, the average year-one drawdown for the 30 most-hyped, tech-driven IPOs since May 2012 is 55%! What this figure tells investors is that the initial euphoria following a company’s debut fades quickly.
Moral of the story-do NOT chase hot IPOs
Year-1 average drawdown = 55%
Year-1 median drawdown = 54%Table: Truist pic.twitter.com/xt864JD4Xh
— Puru Saxena (@saxena_puru) June 3, 2026
SpaceX’s valuation is also completely unjustified. Based on what history tells us, no company at the forefront of a game-changing technology has ever sustained a price-to-sales (P/S) ratio above 30 for an extended period. As of the closing bell on June 24, SpaceX is valued at a P/S ratio of 109!
The company’s staggered lockup schedule is another cause for concern. Instead of a 180-day lockup period where insiders can’t sell their shares, SpaceX settled on an accelerated unlock schedule with several time- and performance-based markers. Insiders will be able to cash out at retail investors’ expense, leaving them holding the bag for an expensive, unproven, and unprofitable business.
All of these historical factors suggest that SpaceX’s year-one max drawdown will be larger than the average pullback of 55%.
While I’m inclined to believe retail investors’ allegiance to Musk can support an outsize premium for SpaceX, its egregious valuation and the upcoming lockup period are red flags that can’t be ignored. I expect SpaceX to hover around or just below the $1 trillion market cap mark by the end of 2027, placing its share price in the neighborhood of $75.
Should you buy stock in Space Exploration Technologies right now?
Before you buy stock in Space Exploration Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Space Exploration Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $387,428!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,221,398!*
Now, it’s worth noting Stock Advisor’s total average return is 895% — a market-crushing outperformance compared to 205% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 26, 2026.
Sean Williams has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla and Truist Financial. The Motley Fool recommends Nasdaq. 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.
