Up 37% in its first week of trading! With a price-to-sales ratio as high as 39, SpaceX is now more "expensive" than any S&P 500 constituent stock.
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SpaceX completed its first week of trading after going public with an unprecedented valuation, and concerns about a stock price bubble have followed.
SpaceX closed its first week at $185 per share, up 37% from the IPO price of $135. Despite a total two-day pullback of about 8.3%, the company’s total market value remains at $2.4 trillion, making it the sixth-largest listed company in the world.
Based on the projected price-to-sales ratio for 2027, SpaceX’s valuation of 39.2 times surpasses all S&P 500 components, making it one of the world’s most expensive large tech stocks.
The surge in valuation is driven by both retail and institutional investors’ fear of missing out. Billions of dollars flowed into ETFs linked to SpaceX within days after its IPO, with retail investor net buying even surpassing that of Nvidia at one point.
Valuation Crushes S&P 500, Even Tesla Pale by Comparison
SpaceX is not yet profitable, making the price-to-earnings ratio meaningless, so price-to-sales is the main reference for valuation.
According to Dow Jones market data and consensus from four analysts, SpaceX shares are trading at a price-to-sales ratio of 39.2 times estimated 2027 revenue, higher than any S&P 500 constituent.
The second highest, Palantir Technologies, is at 28 times, while Tesla is at 12.6 times—a stock already widely seen as overvalued by the market.
Julian Emanuel of Evercore ISI described SpaceX’s listing in a June 14 client note as the start of a new round of “dream FOMO,” saying it could lead "the next leg of the bull market.”
This frenzy is driven by collective anxiety over missing a historic opportunity and a huge bet on CEO Elon Musk’s vision, rather than logic covered by traditional valuation frameworks.
Netscape Ghost Returns, Bubble Debate Heats Up
SpaceX’s IPO has sparked comparisons to the 1995 Netscape IPO.
Netscape’s listing ignited the internet investment boom but also marked the beginning of the internet bubble’s collapse.
Maury Blackman, managing director at Pierpoint Ventures, wrote in a blog post on the eve of SpaceX's IPO that Netscape's listing "validated people's imagination," and that SpaceX's IPO would tell every CEO, every board, and every institutional investor "the direction is set."
Jim Thorne, chief strategist at Wellington-Altus, was blunt:
Bubbles are normal in technological revolutions. We will over-allocate, deploy too much capital, and overbuild.
He said the real question is not whether the market is in a bubble, but how things will play out after the bubble.
However, several analysts also pointed out fundamental differences between SpaceX and Netscape.
SpaceX has already built a vast and real commercial footprint, with virtually no rivals in rocket launches, and growing competitive advantages in satellite communications and AI infrastructure, providing governments and many commercial clients with irreplaceable space access capabilities.
Huge Analyst Target Price Divide
Despite ongoing valuation controversy, many institutions have chosen to take a bullish stance.
Oppenheimer analyst Timothy Horan raised his target price from $190 to $250 in a client report Thursday, about 39% above the current level, saying:
We believe SpaceX will, thanks to its expertise in engineering, manufacturing, and aerospace technology, become the world’s largest communications and cloud computing/AI company.
Arete Research analyst Andrew Beale initiated coverage with a target price of $401, implying more than a doubling from the current stock price.
He forecasts SpaceX revenue will surpass $200 billion by 2030, but cautions:
Space is hard. Launch anomalies, technical challenges, environmental factors and more could delay the timeline, so all forecasts should hold significant uncertainty.
Michael Monaghan, partner and portfolio manager at Founder Funds, said his fund’s confidence in holding SpaceX stock is based on the view the company can achieve $200 billion in revenue by 2030. Monaghan said:
But both literally and figuratively, you need a rocket to win that revenue.
Fast-Approaching Index Inclusion, Passive Funds May Provide Support
Short-term stock price pressure may ease due to index inclusion.
Based on Nasdaq’s rules for fast-track inclusion of large-cap IPOs, SpaceX can enter the Nasdaq 100 Index after 15 trading days post-listing, and will also be added in due course to FTSE Russell and MSCI-related indices.
According to index rebalancing forecaster Intropic, about 30% of SpaceX’s free float could be held by passive investors just two weeks after its IPO.
Combined with the reality that internal shareholders are locked up and can’t sell, and the tradable float is small, multiple factors may offer extra support for the stock price.
Ann Miletti, Allspring head of global equities, said index-focused investors are now wondering: "If this stock enters any index, how should I adjust my position?" This is one of the main drivers of current trading volumes.
Dec Mullarkey, managing director at SLC Management, urged investors to remain patient:
There is still a lot of noise at the trading level. There will always be tactical buying, which usually takes a few weeks to work through. We are still in the early stage of price discovery in a reasonable range.
Historical data shows that for large IPO stocks, the average maximum drawdown in the first year after listing is 55%. For highly valued SpaceX, this is an instructive reference.
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