Key Points

SpaceX shares have climbed nearly 40 percent in the brief period following its IPO.
Several compelling arguments support further growth for the firm.
At the same time, a strong case exists that the current valuation leaves little room for error.
10 stocks we prefer over Space Exploration Technologies ›

Describing Space Exploration Technologies Corp. (NASDAQ: SPCX), commonly called SpaceX, as one of the most closely watched IPOs ever would hardly overstate the situation. The firm secured roughly $85 billion through its offering at a valuation near $1.8 trillion on June 12, figures that dwarfed prior U.S. IPO benchmarks by a wide margin.

Yet with the shares posting sizable gains in their short public history, does the present level still represent an attractive entry point?

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The decision proves more nuanced than it first appears. Persuasive points exist on both sides of the ledger for purchasing SpaceX at today's levels. Below is a balanced review of the optimistic and cautious perspectives on this space sector leader along with my expectations for the coming twelve months.

Image source: Getty Images.

Arguments favoring SpaceX despite the elevated valuation

As noted, SpaceX secured about $85 billion by issuing shares priced at $135. Demand far exceeded available supply at that level.

That robust interest drove the stock to open near $150 on its first trading day and close around $161, a 19 percent advance. Within days it reached $229.40, momentarily exceeding Microsoft's (NASDAQ: MSFT) capitalization. The price has eased since then yet currently stands at $185, marking a 37 percent rise from the IPO price and implying a $2.43 trillion market value.

Even after these advances, several factors suggest the valuation may hold up.

Chief among them is the expansion outlook. SpaceX revenue is projected to more than double from recent computing agreements with Anthropic and Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). In addition, Starlink delivered 50 percent year-over-year revenue growth in 2025 while posting a robust 63 percent adjusted EBITDA margin, minimal customer turnover, and substantial remaining market potential.

Additional elements bolster the positive outlook:

Starship offers a transformative chance to reshape the space sector and lift launch-related income sharply. Executives target commercial cargo missions in the second half of the year, an event likely to lift the share price.
Index funds tracking the Nasdaq-100 must acquire billions of dollars of SpaceX shares irrespective of price, potentially supporting further gains.
The xAI division carries considerable upside potential, and tangible advancements later this year could reassure investors.

Arguments for avoiding SpaceX shares

Despite those factors, the company appears richly priced relative to its prospects. Shares change hands at more than 100 times trailing twelve-month sales, and conventional valuation approaches point to a considerably lower market capitalization. Morningstar, for instance, assigns a fair value of only $780 billion.

Investors must also consider an accelerated lockup release. While the customary 180-day restriction ends in December, SpaceX has adopted an atypical timetable permitting select insider sales shortly after second-quarter results, expected in late July or early August. The earnings release itself could disappoint and weigh on the price.

Finally, the most ambitious element of the growth narrative centers on xAI and concepts such as orbital data centers. Prior to the Anthropic and Google agreements, GPU utilization at the Colossus 1 site stood at just 11 percent, and the Grok platform has yet to match larger competitors in securing commercial adoption.

SpaceX share price outlook after one year

I lack any special insight into the precise level SpaceX shares will reach in twelve months and cannot forecast near-term moves with certainty. Drawing on the factors above, one can reasonably envision a $4 trillion valuation if xAI losses moderate and Starlink sustains its expansion pace, or alternatively a 50 percent decline from present levels should several negative developments coincide.

Is now the moment to acquire Space Exploration Technologies shares?

Before committing capital to Space Exploration Technologies, weigh this consideration:

The Motley Fool Stock Advisor team recently named the 10 strongest stocks for investors to purchase at present, and Space Exploration Technologies did not appear on that roster. The ten selections could deliver substantial gains over the years ahead.

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Matt Frankel, CFP® holds no positions in the securities discussed. The Motley Fool maintains positions in and endorses Alphabet and Microsoft. The Motley Fool maintains a disclosure policy.

The perspectives offered here belong solely to the author and may not represent those of Nasdaq, Inc.