By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panelists agreed that SpaceX's valuation is steep and faces significant risks, including lockup expirations, high capex, and regulatory uncertainties. They debated the timing and magnitude of potential returns, with some seeing a lower but still substantial opportunity, while others were more skeptical.
Risk: Regulatory constraints, such as rate caps or open-access requirements, could compress margins and make the current valuation unsustainable.
Opportunity: If SpaceX can achieve scale with Starlink and secure repeat DoD/NASA contracts, the stock could re-rate despite high initial capex.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Space Exploration Technologies (NASDAQ: SPCX), or SpaceX, became the largest company ever to undertake an initial public offering (IPO) earlier this month, and the stock had a strong start out of the gate. It rose three straight days after debuting, hitting a high of $225.64. However, the stock has since pulled back to levels at which it traded on its first day, and I would be wary of buying it here.
Historically, it is very common for stocks to eventually trade below their opening-day low. According to The Lifecycle Trade, this happens about 90% of the time. In fact, SpaceX traded below its day-one low price for the first time on June 23, only six trading days after its debut.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
This is notable since the stock currently has a very low initial float of just 4%, and there should have been some initial institutional buying to support it. Now it faces a series of share lock-up expirations that will increase its float over the next year, which could pressure its shares. The company has an astonishing 15 lockup expirations over the next year-plus.
The first lock-up expirations are scheduled for the next two months. The first could come two days after its first earnings release, which Morningstar currently estimates will take place in late July or early August. Insiders will then be able to sell 911.5 million shares, or nearly 7% of its original shares outstanding, if they wish. Another 319 million shares, or about 2.4% of its original shares outstanding, will be released on Aug. 20.
Setting aside near-term trading dynamics, what about SpaceX's long-term prospects? The company has painted a very bright picture of its future, where not only will it have leading connectivity (satellite internet and mobile) and rocket-launching businesses, but it will also be operating AI data centers in space. It also plans to build a large chip manufacturing facility with Tesla and Intel.
With the company producing just under $19 billion in revenue last year and carrying a $2 trillion market capitalization, investors are betting very heavily that some of SpaceX's moonshot bets pay off. Its reusable rocket business gives it a cost advantage, and its Starlink satellite internet business is nice, but this is a capital expenditure-heavy business that will be solid but not worth getting overly excited about. Meanwhile, Nvidia's CEO was very skeptical of SpaceX's Terafab initiative.
Between its near-term trading dynamics, high valuation, and heavy emphasis on things that may or may not happen in the future, this is an AI stock I'd avoid.
When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 892%* — a market-crushing outperformance compared to 205% for the S&P 500.
They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.
**Stock Advisor returns as of June 28, 2026. *
Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"Starlink monetization and defense/space contracts, plus cost reductions from reusable rockets, could unlock substantial upside and justify a re-rating despite near-term lockup-driven volatility."
While the article warns about lockups and moonshots, the real story is optionality. If SpaceX monetizes Starlink at scale, secures repeat DoD/NASA contracts, and steadily reduces unit costs via reusability, the stock could re-rate despite high initial capex. The piece underplays how revenue visibility from Starlink and defense programs could dwarf speculative moonshots over time. It also glosses over near-term volatility from lockup cycles. One big caveat: the SPCX ticker and a $2 trillion valuation claim seem inconsistent with public disclosures, which undermines the base case.
Bearish counterpoint: even with optionalities, near-term lockup-driven supply could crush the stock, and the thesis relies on aggressive Starlink monetization and lengthy defense contracts that may take longer to pay off than investors expect.
"SpaceX's valuation is driven by its unique position as the sole provider of critical space-based infrastructure, which creates a competitive moat that traditional valuation metrics fail to capture."
The article's focus on lock-up expirations and IPO technicals ignores the fundamental reality that SpaceX is not a traditional equity; it is a strategic infrastructure monopoly. While the $2 trillion valuation is steep against $19 billion in revenue, the market is pricing in the inevitable dominance of Starlink as a global ISP and the launch-cost moat provided by Starship. The 'moonshot' skepticism is misplaced—SpaceX has already achieved what was deemed impossible in reusable rocketry. Investors shouldn't be looking at lock-up technicals; they should be analyzing the margin expansion potential as Starlink scales. If they hit their launch cadence targets, the valuation could be justified by 2027 cash flows.
The strongest case against this is that SpaceX remains a capital-intensive, high-risk venture where the $2 trillion valuation leaves zero margin for error, and any delay in Starship's reliability could trigger a massive valuation reset.
"The lockup pressure is real and near-term, but the article's core bearishness rests on valuation assumptions that never specify what revenue/margin profile would justify current price—making it impossible to assess if the risk/reward is actually unfavorable."
The article conflates three separate issues—lockup mechanics, valuation, and execution risk—without distinguishing their severity. Yes, 15 lockup expirations create near-term float pressure; that's mechanical and real. But the 90% historical statistic is misleading: it describes *all* IPOs, not mega-cap companies with $2T valuations and institutional anchors. The valuation critique ($2T on $19B revenue = 105x sales) is legitimate, but the article never quantifies what valuation would be justified if even *one* moonshot (Starlink profitability, space data centers) materializes. Nvidia's skepticism of Terafab is noted but not contextualized—skepticism isn't proof of failure. The article reads as a bear case dressed as analysis, not a balanced risk assessment.
If SpaceX's Starlink reaches 50M+ subscribers at $100+/month ARPU with 60%+ margins by 2028, and space data centers capture even 5% of edge-compute demand, the $2T valuation becomes defensible—and lockup selling becomes noise against that tailwind.
"The front-loaded lock-up releases will likely force SPCX lower before any long-term bets can be validated."
The article correctly flags SPCX's 15 upcoming lock-up expirations and $2T valuation on just $19B revenue as red flags, but underplays how the first two releases (911.5M shares in July/August, then 319M) coincide with the initial earnings print. At 4% float, even modest insider selling could overwhelm thin trading and push the stock below its $225.64 high toward the day-one low. The space-AI and Terafab bets add optionality yet also execution risk that Nvidia has already questioned, leaving little margin if Starlink capex overruns or reusable launch margins compress.
A beat-and-raise on first earnings could spark short-covering that absorbs the July unlock entirely, allowing SPCX to hold above $200 if Starlink net adds surprise to the upside.
"The 2T valuation hinges on aggressive, uncertain post-2025 cash flows from Starlink and DoD deals; regulatory, capex, and timing risks make that base case unlikely."
Gemini overemphasizes Starlink scale and ignores the timing risk and capital intensity. Even with subscriber growth, a 2T valuation requires either multi-year, outsized margin expansion or near-perfect DoD/space-data monetization on a timeline investors rarely tolerate. Regulatory constraints, procurement lags, and a potential Starship/Starlink capex curve could push free cash flow into the far future, meaning the current price already discounts too optimistic a path.
"SpaceX's status as critical infrastructure invites regulatory intervention that will permanently cap margins and invalidate current high-growth valuation models."
Gemini and Claude are ignoring the geopolitical tail risk inherent in SpaceX's infrastructure monopoly. If Starlink is deemed critical national security infrastructure, the U.S. government could impose rate caps or force open-access requirements, effectively turning a high-margin ISP into a regulated utility. This would compress the 60% margins Claude assumes, making the 105x sales multiple mathematically impossible to justify. The valuation isn't just about execution; it's about the ceiling on profitability imposed by sovereign dependency.
"Regulatory risk is real but doesn't invalidate the thesis—it just resets the valuation ceiling, which nobody has actually calculated."
Gemini's regulatory utility argument is the sharpest risk surfaced yet—but it's incomplete. Rate caps don't destroy the moat; they compress margins. The real question: at what ARPU and subscriber count does even a regulated Starlink generate acceptable returns on $50B+ cumulative capex? If 100M subs at $60/month regulated beats legacy telecom returns, the valuation survives, just lower. Nobody's quantified the breakeven. That's the actual debate.
"Lockup timing amplifies regulatory risk by raising the odds of dilutive financing exactly when margins are most vulnerable."
Claude's breakeven framing understates how July's 911.5M-share unlock collides with any regulatory announcement. If rate-cap rumors surface near the first earnings print, forced selling into thin float could trigger a capital raise at depressed prices, inflating the $50B capex bill and pushing the required subscriber threshold higher than the 100M at $60 ARPU scenario assumes.
The panelists agreed that SpaceX's valuation is steep and faces significant risks, including lockup expirations, high capex, and regulatory uncertainties. They debated the timing and magnitude of potential returns, with some seeing a lower but still substantial opportunity, while others were more skeptical.
If SpaceX can achieve scale with Starlink and secure repeat DoD/NASA contracts, the stock could re-rate despite high initial capex.
Regulatory constraints, such as rate caps or open-access requirements, could compress margins and make the current valuation unsustainable.