SpaceX made a high-profile entrance to public markets on Friday, with shares surging 19% to close at $160.95 on the Nasdaq. The stock's debut, following a $75 billion initial public offering—the largest on record—valued the aerospace and satellite communications company at approximately $2.1 trillion. The rally has ignited a fierce debate on Wall Street over whether the stock can sustain its momentum or if the valuation has already priced in too much optimism.
The company's first day of trading saw strong demand, but the stock now faces a critical test. Options trading is expected to begin as early as Tuesday, which could amplify volatility. Additionally, SpaceX's first quarterly earnings report as a public company is on the horizon, and index inclusion—particularly into the Nasdaq 100—could provide further support. The Nasdaq has already adjusted its listing rules to accommodate SpaceX, though the S&P 500 will not allow fast-track entry.
Bulls See Starlink and Starship as Game Changers
Optimists point to SpaceX's dominant position in the space industry. The company estimates its total addressable market at $28.5 trillion, and it has placed over 80% of all mass into orbit over the past three years. Starlink, the satellite internet division, offers a recurring revenue stream, while Starship—a heavy-lift reusable rocket designed for missions to the Moon and Mars—is central to long-term cost reduction and expansion. Some investors draw parallels to Amazon's early days, arguing that SpaceX is fundamentally reshaping industries. “This is not a name you’re buying based on fundamentals. For me, the analogy is Amazon. This was a company that changed the way we live,” Nancy Tengler, CEO and CIO of Laffer Tengler Investments, told Reuters.
Bears Flag Stretched Valuation and Losses
On the other side, skeptics highlight the stock's extreme valuation. With annual revenue of $18.7 billion, SpaceX trades at a price-to-revenue ratio of roughly 112—meaning investors pay $112 for every dollar of sales. The company is not profitable, reporting over $4 billion in annual losses. Morningstar analysts estimate fair value at about $780 billion, far below the current market cap. CFRA has initiated coverage with a sell rating. The high valuation leaves little room for error: any disappointment in earnings or growth could trigger a sharp pullback.
Options and Index Inclusion Could Drive Volatility
The introduction of options trading is expected to generate significant activity. “I expect explosive demand,” said Ophir Gottlieb, CEO of Capital Market Laboratories. Index inclusion may also create forced buying from passive funds, but the effect could be short-lived. If early investors sell into that demand, the stock could slide just as quickly. The upcoming quarterly results will be the first real test of whether the post-IPO pop can be sustained.
Doubling by 2027: A Stretch Goal
For SpaceX shares to double by the end of 2027, the company's market cap would need to reach nearly $4.2 trillion. That would require sustained investor confidence in Elon Musk's leadership and the successful commercialization of Starlink, Starship, and potential AI-in-space initiatives—all before profitability materializes on public-market terms. The stock remains a high-risk, high-reward bet, appealing only to those comfortable with extreme volatility and a long-term horizon.
