SpaceX Stock Has Already Lost Most of Its IPO Gains. It’s Not Time to Buy Until Shares Fall Below $135.

Space Exploration Technologies (SPCX) is continuing to take investors on a roller coaster ride—and I don’t expect it to end any time soon. After launching the biggest initial public offering in stock market history, raising an incredible $85.7 billion, SpaceX rattled the markets this week when it said it needed—you guessed it—even more cash.

SPCX stock sold off fast Monday, dropping 16%, as the company sold off bonds to raise another $25 billion on top of the $85 billion that it raked in during its IPO, according to CNBC. The company now has more than $100 billion in cash.

SpaceX priced its IPO at $135 and started trading at $150 on June 12. Now, just two weeks after that mammoth opening, Elon Musk’s company has given back nearly all the gains it generated, and the stock is trading right around the $150 mark.

How should investors be trading SPCX stock? Or perhaps the better question is, should they be trading it at all?

SpaceX’s Rise and Rapid Fall

First, it’s notable to look at what SpaceX has done. The stock at one point topped $225 per share, a 66% gain from its IPO price, as investors rallied to get a piece of the space-and-AI company. The gain for a time made Musk the world’s first trillionaire, although the stock’s pullback (combined with an even bigger drop in Tesla (TSLA) shares in the last two weeks) sent Musk’s net worth back to a “mere” $938 billion, according to the Bloomberg Billionaires Index.

The company is getting a lot of attention because of the weight of Musk’s personality—he became a household name based on his success at Tesla—combined with the allure of spaceflight and the sheer potential of artificial intelligence. In fact, it’s the latter business that SpaceX sees the greatest opportunity in, with a total addressable market of $26.5 trillion in AI alone.

In the company’s prospectus, management writes loftily, to say the least, about its goal to create a comprehensive AI infrastructure on Earth and then to do the same in outer space. It points out that data center demand is already outpacing electricity generation, straining power grids and the environment. The solution to the power bottleneck, the company says, is to use solar power, harnessed in space, to power data centers.

Connectivity infrastructure in space is designed to help everyone on Earth have access to education, healthcare, entertainment, and communications, and to enable people to overcome many traditional limits, such as physical and political borders. We believe AI infrastructure in space can utilize the virtually limitless power of the Sun and thereby enable the use of AI as a transformative force for understanding the universe and improving the daily lives of all humans.

The prospectus continues: “We believe the convergence of these areas will enable an unprecedented expansion in the global economy, leading to an age of abundance. Our innovations and technological advancements are redefining industries on Earth, while we aim to create new ones on the Moon, Mars, and beyond. We are truly building the infrastructure of the future.”

So, you can see why people are excited about the SpaceX potential. But it will all be tremendously expensive—a problem acknowledged by even the most strident of SpaceX supporters. Goldman Sachs, which was the IPO’s lead underwriter, estimates that SpaceX will post negative free cash flow in 2029 of a whopping $105 billion.

How Do You Invest in SPCX Stock Now?

Investing in IPOs is tricky. IPOs often jump high on investor enthusiasm and bullish analyst sentiment, but then fall as the company starts making required disclosures to the Securities and Exchange Commission, and people start getting a closer look at the numbers. There’s also the issue of lockup expirations—insiders and institutional investors start releasing their shares and taking profits after the end of a lockup period, and that often causes the stock to drop as well. A Nasdaq study indicates that IPOs generally tend to underperform in their first three years, with 64% of them more than 10% behind the overall market’s return. 

SpaceX had $18.7 billion in revenue in 2025, which was up 33% from the previous year. That’s solid growth. But will it grow fast enough to pay for the company’s AI ambitions? SpaceX already has a $29.4 billion deal with Alphabet (GOOG) (GOOGL) to provide Google with computing capacity and just signed a $6.3 billion deal with Reflection AI, a startup that is rapidly scaling as an open-source alternative to OpenAI and Anthropic.

Morgan Stanley has forecast SpaceX to have $330 billion in annual revenue by 2030, and Goldman Sachs says the company could reach $470 billion in revenue. SpaceX discloses in its prospectus that it will scale its capex rapidly to build out its AI infrastructure and will “access a range of debt and equity financing solutions available to us as a public company to fund future investments in growth and to maintain strong liquidity.”

I think SpaceX is too expensive to trade right now and that there will be opportunities to buy the stock below its initial $135 IPO price. If you do buy SPCX stock, however, make sure you have a long-term horizon and don’t mind some risk. This stock won’t settle down anytime soon.