Key Points
SpaceX (NASDAQ: SPCX), which went public in the biggest IPO in history on June 12, joined the Nasdaq-100 on July 7. That inclusion, driven by Nasdaq‘s (NASDAQ: NDAQ) fast-track rules for mega-IPOs, forced its index-based exchange-traded funds (ETFs) to buy the stock.
Yet SpaceX’s stock has actually declined 17% since its inclusion in the Nasdaq-100, and it’s dropped below its IPO price of $135 per share. Let’s see why SpaceX’s addition to the index failed to drive its stock higher, and if its post-IPO pullback represents a buying opportunity.
Why did SpaceX’s stock pull back?
SpaceX’s stock reached a record intraday high of $225.64 per share on June 16 and closed at its all-time high of $211.39 on the same day. At the time, many investors were still dazzled by its historic IPO and consumed by a fear of missing out (FOMO).
But at its peak, SpaceX’s market cap hit $2.66 trillion, or 142 times its 2025 revenue of $18.7 billion. Today, its market cap still hovers at $1.63 trillion, or 87 times last year’s revenue.
Those price-to-sales ratios seem too high for a company that grew its revenue by 33% in 2025. It’s also unprofitable, since losses in its space and AI segments (the latter expanded by its hasty acquisition of xAI before its IPO) are erasing Starlink’s profits. It will also continue to rely heavily on debt offerings and dilutive acquisitions (like its recent all-stock takeover of the AI coding start-up Cursor) to expand its money-losing AI business.
SpaceX will unlock 20% of its shares held by its employees and early pre-IPO holders on the second trading day after its second-quarter earnings report in late July or early August. If its stock closed at or above $175.50 for at least five of the ten consecutive days before that earnings release, it will unlock another 10%. All of those red flags drove many investors to retreat from SpaceX’s stock after its explosive debut.
Does that pullback represent a buying opportunity?
Elon Musk claims SpaceX could generate more than $1 trillion in annual revenue by 2030, as it launches Starship (its largest rocket ever), expands Starlink’s network, sends more data centers into orbit, and expands its AI infrastructure and services segment. From 2025 to 2028, analysts expect its revenue to grow at a 97% CAGR from $18.5 billion to $141.6 billion.
If you expect SpaceX to achieve that incredible acceleration, then its stock might be worth accumulating as it languishes below its IPO price. But if you think those estimates are too bullish (as they often are), then it might be prudent to wait for lower prices and more realistic long-term estimates.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
