SpaceX Is The Fifth Most Valuable Public Company In The World. Can it beat Nvidia, Alphabet, Apple, or Microsoft?
In the three trading days from the June 12 initial public offering (IPO) to June 16, Space Exploration Technologies (NASDAQ: SPCX)or SpaceX, became the world’s fifth most valuable company, surpassing heavy metals such as Amazon again Taiwan Semiconductor Manufacturing.
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There has been a lot of momentum behind SpaceX stock since its IPO, but it could go on and on Nvidia, Alphabets, an appleagain Microsoft? One is more likely than the other three, but that doesn’t make it a no-brainer investment right now.
How much capital would SpaceX need to grow
SpaceX’s launch in the short term since its IPO has been par for the course for many blockbuster IPOs. Nvidia jumped 63% on its first day of trading; Microsoft jumped 33 percent; Apple jumped 31 percent; while Alphabet jumped 18%. So far, SpaceX is up about 35% since its IPO, with a market capitalization of $2.73 trillion.
Here are the market intervals for the four tech heavyweights discussed:
I don’t think SpaceX taking on Nvidia, Alphabet, or Apple makes sense, but I wouldn’t be surprised if it overtakes Microsoft. The $4 billion mark seems out of reach for SpaceX right now, but it’s knocking on the door of $3 trillion.
Should you invest in SpaceX and ride the wave?
Even if SpaceX were to overtake Microsoft, I don’t see it being sustained for long. Right now, SpaceX is riding the IPO wave, but eventually insiders (such as investors and employees) will be able to sell their shares, which could drive the stock lower as acquisitions increase.
Past events do not guarantee future events, but historically, many large IPOs go under in the months following their IPOs. Only time will tell if SpaceX follows that trend, but I believe the high stock price makes it vulnerable to a major pullback.
There are a lot of things to like about the SpaceX business — including aerospace progress, the growth of Starlink, and the amount of artificial intelligence (AI) computing power it has — but that doesn’t always mean the stock will do well. Don’t let the fear of missing out (FOMO) and its current growth be the reason for your investment.
If you are interested in investing, I would recommend dollar cost balancing in order to help protect against the high volatility the stock may experience in the coming weeks and months. Or, I would wait until the current hype dies down a bit and you get a better idea of how the stock is launching.
